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Dr. Malad (West).A.com Annual Report 2009-10 | 28 – – – – – – – – – – Chairman Director Director Director Director Director Director Director Vice Chairman President & CEO & Executive Director Chairman Member Member Member Statutory Auditors Deloitte Haskins & Sells Chartered Accountants 12.shoppersstop. Mirchandani Shahzaad S. Ltd.400 064 Website: www. Mirchandani Ravi C. Raheja Neel C. Raheja Prof. 95. Nitin Sanghavi Shahzaad S. B Wing.Shopper's Stop Ltd. Opp. Ganpatrao Kadam Marg. Nagesh Vice President – Legal & Company Secretary Prashant Mehta Registered Office & Service Office Eureka Towers. – Chairman – Member – Member . Raheja Neel C. Annie Besant Road. Board of Directors Chandru L. Nitin Sanghavi Shahzaad S. Mindspace. Raheja Ravi C. Mumbai . Raheja Prof. Link Road. Jalan Mill Compound. Nagesh Govind Shrikhande Shareholders Investor Grievance and Share Transfer Committee Ravi C. Raheja Gulu L. 9th Floor. HDFC Bank Limited ICICI Bank Limited – – – – – – – – Chairman Member Member Member Chairman Member Member Member Solicitors Wadia Ghandy & Co. Raheja B. Dalal Finance Committee Ravi C. Raheja B. Raheja Neel C. Mumbai .400 013 – – – – Bankers IDBI Bank Limited Axis Bank Limited Kotak Mahindra Bank Limited Citibank N. Nagesh Govind Shrikhande Audit Committee Deepak Ghaisas Ravi C. S. Nitin Sanghavi Deepak Ghaisas Nirvik Singh B. Dalal Prof. Worli. S. Dalal Compensation/ Remuneration Committee Gulu L. Lower Parel. Mumbai . S.400 018 Internal Auditors Ernst & Young Pvt. Shiv Sagar Estate.

492 1.867 7.874 84.9% 1.486 — 26.855 36 32.710 3.1 0.801 2.588 32.0 2. (Rs.6% 5.916 129.5% 6.8 3 95 3.354 7.741 10. Mac.124 3.822 20.503 1.3 3.804 79.0 2.9 3. Arcelia.41 1.871 — 4.7 2.850 16.293 169 47.136 32.7% 5.7% 31.0% 3.567 5.9 -5.3 2 69 3.505 3.6 8.) Basic Diluted Cash EPS Dividend Per Share 2009-10 93 154.each) (In Rs.776 87.3 2.6 31.038 15.0% 32.759 31.8% 18.30 1.885 12.428 88.029 12.438 131.6% -2.6 0.560 6.452 697 3.487 — 19.426 8.452 — 1.0 2.436) (6.85 (18.216 21.776 — 44.491 3.741 5.826 26.563 4.0 13.438 — 23.5 1.3) (0.0% 30.379 (188) 6.4% 8.924 2.0% 4.658 6.726 2.0 3 94 4.3 0.658 240 1.252 17.10 12.457 2.025 2.7 3 55 3.6% 1.4 0.874 440 2.2 23.4 14.871 2.0 1.023 3.311 6.025 — 4.4 18.603 3.399 43. Annual Report 2009-10 | 29 .58 14.085 25.141 — 50.879 5.3) (18.008 5.522 6. Crossword Bookstores.5 3.46 7.486 (6.326 19.467 15.342 109. in lacs) 2005-06 21 66.024 75.0% 28.86 8.7% 5.00 1.9% 5. of Days Stock Turnover Ratio Current Ratio Assets Turnover Ratio Debt Equity Ratio Return to Investors Return on Networth Return on Capital Employed Book Value Per Share (in Rs.483 — 26.810 150.2% -3.4% 25.372) 3.873 2.9% 26.2% 14.Financial Highlights & Key Ratios Shopper's Stop Ltd.7 2. Clinique.532 7.5% 3.183 17.12 8.50 Note: Number of stores includes the Shoppers Stop Department stores and Speciality Stores (viz Home Stop.885 11.567 116.2% 17.14 2.314 412 41.873 8.034 11.3% 85.9% -4.58 7. of Stores Income Gross Retail Sales Less: Value Added Tax Gross Retail Sales (Net of taxes) Other Operating & Miscellaneous Income Expenditure Cost of goods sold Employee costs Operating and administrative expenses EBIDTA Interest and finance charges Depreciation Profit Before Tax before exceptional items Exceptional Items Profit Before Tax after exceptional items Profit After Tax Balance Sheet items Share Capital Optionally Convertible Warrants Reserve & Surplus Loan Funds Deferred Tax Liability Capital Employed Fixed Assets Net Working Capital Profit & Loss Ratio's Gross Retail Sales (Chain level growth) Gross Retail Sales (Like to Like growth) Gross Profit Margin Operating Expenses Ratio Operating Margin (EBIDTA) (Before exceptional item) PBT Margin before exceptional item PAT Margin Interest Coverage Balance Sheet Ratio's Debtors No.857 147.394 4.3 23.504 4.620 3.244 3.0% 66.8% 80.1 2 54 3.0% 3.) EPS (taking equity share at Rs.551 113.3% 88.50 Profitability Statement No.030 29.000 8.2% 0.131 24.103 6.126 33.7% 30.1% 18. 10/.8% 8. Mother Care. Estee Lauder & Airport Business).7% 21.7 0.0% 13.1% 3.8% 14.220 4.4% 24.406 56.492 59.6% 4.27 1.631 2.700 138.021 34.5% 16.111 63.611 98.072 24.2% 7.556 5.243 15.313 (3.555 134.927 1.17) — 2007-08 73 119.2% 4.8% 85. of Days Creditors No.57 15.0% 31.5% 1.2% 31.50 2008-09 72 138.907 65.949) 2.50 2006-07 60 88.

435.10 127.00) 610. 6.70) (63. taking its chain of stores to 34 stores (including HomeStop) spread across India.856.80 lacs).2009.03 1.80) 4. Awards and Recognition Your Company has been conferred inter-alia with the following awards and recognitions during the year under review: • Best Distribution Centre Management System at Network Computing EDGE and PC Quest Enterprise Award .25 lacs (previous year Rs.05 lacs (previous year net loss of Rs.17 141.074.158.40 126.10 1. 5.685.178.836. Shopper's Stop Ltd.e.08 631.543.371.93 156.313.2009.895.023. two at Hyderabad and one at Amritsar.54 6. Dividend Distribution Tax) Transfer to General Reserve Balance carried forward March 31.60) 6.71 251.07% y-o-y basis. 127. The revenue is Rs.90) (6. 1.Consumer Relations at IRF 2009.98 5.70 7. once approved by members in the ensuing Annual General Meeting will be paid out of the profits of the Company for the year and will sum up to a total of Rs.75 13. Annual Report 2009-10 | 30 . • Customer & Brand Loyalty in the Retail Sector at Loyalty Summit Award 2010. 2010.313.669. Dividend Your Directors are pleased to recommend a dividend of Rs.108.181. 2009 128.371.71 lacs.152.476.07 2.20 6. including dividend distribution tax.15 2. Your Directors are pleased to present the Thirteenth Annual Report on the business and operations of the Company together with the Audited Statements of Accounts for the year ended March 31. in lacs) Year ended Particulars Retail Turnover Own merchandise (including concession sales) Consignment merchandise Other Retail operating income Less: Value Added Tax Less: Cost of consignment merchandise Other income Profit/(Loss) before Depreciation & Tax Less: Depreciation Profit/(Loss) before Tax Less: Provision for Tax Profit/(Loss) after Tax Add/(Less): Balance brought forward from previous year Proposed Dividend (incl.25 9.50 (previous year Nil) per equity share of Rs.40 140. registering a growth of 11.429. one at Bengaluru. The dividend.19 Year ended March 31.437. 141. 610. 10 each.10 795. • Best Visual Merchandising (Store Launch Category) at VMRD Retail Design Award .75 6. • Most Admired Large Format National Fashion Retailer – Outstanding Achievement in Consumer Recognition and Loyalty at the Images Fashion Forum.20 lacs).Directors' Report Dear Members.476.102.84 9. Financial Performance (Rs.83 140.070.181.319. • Most Admired Retailer of the Year. 2010 141.20 (122.00) Performance Review Your Company has opened four departmental stores i.567.108.10 (6.80 – – (1.57 3.583.023.70 10. The net Profit achieved was Rs.759.05 (1.550.

the Balance Sheet. Accordingly.18 each to certain Promoters.000 Equity Shares and/ or Securities convertible into upto 4. members through Postal Ballot have also approved to offer. 2009. are appended herewith and forms part of this Report. the Company has allotted 4. Further. 10 each on exercise of vested options by certain employees under the said ESOP Schemes. Further. in one or more tranches. During the year under review. shall not apply to the Company. Credit Rating Fitch Ratings India Private Limited has maintained “F1(ind)” rating for commercial paper and short term debt programme of Company for Rs. Employees Stock Option Plan Your Company has formulated and designed various Employees Stock Option Plan Schemes (ESOP Schemes) for employees. as amended.000 stock options at an exercise price of Rs.on March 24. 50 crores and Rs. and in accordance with the provisions of Chapter VII of the Securities & Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009. has granted approval that the requirement to attach various documents in respect of subsidiary companies. the Company has allotted 48. 47/127/2010-CL-III dated March 22. 382/. Govind Shrikhande at the Images Fashion Forum. under Employees Stock Option Plan Scheme 2008. is disclosed in the Annual Report. Most Admired Fashion Retail Professional of the year to Mr. Warrants to Promoters and Qualified Institutional Placement As approved by members.400 stock options at an exercise price of Rs. The Company had obtained observations from Securities & Exchange Board of India in respect of its Right Issue of Rs. Subsidiaries Ministry of Corporate Affairs. 2009 and 200. Government of India.on April 29. 300 crores).931 Stock Options granted under Employees Stock Option Plan Scheme 2005 have been surrendered to the Company.85 lacs on account of allotment of equity shares pursuant to exercise of stock options under ESOP Schemes.000. 2010 respectively to the specified employees.Directors' Report • • • • Shopper's Stop Ltd.307. 632. the Company has granted 516. 1956. the paid up equity share capital of the Company has increased by Rs. Each warrant will be convertible into one equity share of Rs. The Annual Accounts of the subsidiary companies and the related detailed information will be made available to any member of the Company and its subsidiaries.000. Gitanjali IFA Most Admired Large Format Retailer of the year – Partner Awards Gini Jony IFA Most Admired Large Format Retailer of the year – Partner Awards Triumph Maximum Consumer Reach – Partner Awards Share Capital During the year under review. as required by the said order. Annual Report 2009-10 | 31 . The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies. as set out in sub-section (1) of Section 212 of the Companies Act. Financial information of the subsidiary companies.521 Equity Shares of Rs. by way of Qualified Institutional Placement ("QIP"). which has been duly audited by the Statutory Auditors. Finance Your Company continues with various initiatives for bringing down the cost of borrowings which includes application of short term instruments so as to have increase in cash flows.000. 2010. During the year under review. who may be interested in seeking such information. 10 each.000 equity shares of the Company. The validity of the said observations had expired and accordingly the Right Issue has been dropped. 30 crores respectively. 500 crores (subsequently reduced to Rs.000 warrants at a price of Rs. through Postal Ballot on December 16. 110/. The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office of the Company and that of the respective subsidiary companies. 1999. Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. 4. The particulars of Employees Stock Option Plan (ESOP) Schemes. vide order No. as required by SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines. issue and allot upto 4.

Directors' Report Shopper's Stop Ltd.851 Customer Care Associates. Special designed training modules for the frontline employees are being delivered from time to time to meet the training needs of the employees. wisdom and guidance. pursuant to the Master Franchise Agreement. rights. Compliance with the Code of Conduct The Company had evolved and adopted a Code of Conduct for its Board of Directors and its management personnel based on the principles of good corporate governance and best management practices. members approval to handover ‘Crossword’ business back to Crossword Bookstores Ltd. expertise and details of other directorship and committee membership thereof of these directors are given in the explanatory statement annexed to the Notice convening the Thirteenth Annual General Meeting. Directors In appreciation of Mr. Auditors Your Company’s Statutory Auditors. Chartered Accountants. after his successful association for more than eighteen years with the Company. The Company proposes to seek. Mirchandani and Mr. his belief in human values and business principles & ethics are some of the principles upon which the Company stands today. the Company and Crossword. propose to terminate the said Agreement and handover ‘Crossword’ business back to Crossword Bookstores Limited. Fixed Deposits During the year under review. L. the Company has not accepted any deposit under Section 58A of the Companies Act. Crossword Bookstores Limited. Deloitte Haskins & Sells have sought the re-appointment and have confirmed that their re-appointment. People development continues to be a key focus area in the Company. Mr. offer themselves for re-appointment. 2006. He played a key role in the phenomenal growth and success of the Company. he was elevated as Non-Executive Vice Chairman with effect from August 18. No amount of principal or interest was outstanding as on the Balance Sheet date. as the Statutory Auditors of the Company for the financial year 2010-2011. Annual Report 2009-10 | 32 . 1956. read with Companies (Acceptance of Deposits) Rules. Apart from his extraordinary entrepreneurial acumen. competence and vigour shown by its employess in all realms of business. Govind Shrikhande has been entrusted with the responsibility of the day to day management of the affairs of the Company. w. to carry on ‘Crossword’ business at its existing and new store premises which may be identified by the Company from time to time. 1975. His affectionate care for the well-being of the employees. as its master franchisee. Now. Mumbai. The Company continues to take new initiatives to further align its HR policies to meet the growing needs of its business. 2009. Nagesh is a great visionary. liabilities/ obligations of all nature and kind along with its employees. together with its fixed assets. The Audit Committee and the Board of Directors recommends the re-appointment of Deloitte Haskins & Sells. as the President & CEO & Executive Director of the Company with effect from August 18. by postal ballot under section 293(1)(a) of the Companies Act. B. Your directors would like to place on record their sincere gratitude towards the guidance and contribution made by Mr.e. 1956. In accordance with the provision of the Companies Act. The declaration of compliance with the Code of Conduct has been received from them. retire by rotation at the ensuing Annual General Meeting and being eligible. As on date of the Balance Sheet. shall be within the limits laid down under Section 224(1B) of the Companies Act. G. Mr. Nagesh and welcomes him as the Vice Chairman of the Company. the Company had a total of 3. Nagesh's farsighted vision. Directors of the Company. retire at the conclusion of the ensuing Annual General Meeting. if made. 1956 and Articles of Association of the Company. Mr. S. 2009. A separate section on Corporate Governance and Auditors Certificate is annexed hereto and forms part of this Report. They have enabled the Company to build a successful and sustainable business model. S. current assets. Deepak Ghaisas. July 1. Chartered Accountants. Deloitte Haskins & Sells. 1956. Corporate Governance The Company has been pro-active in following the principles and practices of good Corporate Governance. a wholly owned subsidiary of the Company had appointed the Company. B. A brief resume. Human Resources The Company takes great pride in the commitment. which have been invaluable to the Company’s growth. The Code is available on the website of the Company.f. The Company has taken adequate steps to ensure that the conditions of Corporate Governance as stipulated in clause 49 of the listing agreement with the Stock Exchanges are complied with.

1956.387. the report and accounts are being sent to all shareholders of the Company. upto an extent of Rs. 3. in Hypercity Retail (India) Ltd. a wholly owned subsidiary of the Company under Section 293(1)(a) of the Companies Act. were lying in the escrow account due to non. Adoption of new LED lighting to reduce the energy consumption. Particulars of Employees The particulars of employees’ as required under Section 217(2A) of the Companies Act. • • • • • • • • • Daily maintenance of power consumption in every store.Unclaimed Shares Demat Suspense Account. Conservation of Energy. Despite various reminders to them.745. Rs. professional fees etc. To handover ‘Crossword’ business to Crossword Bookstores Limited. Foreign Exchange outgo during the year included purchase of computer software and purchase of merchandise.03 lacs (previous year Rs. Installed capacitor Banks to Maintain the Power factor and reduce the losses. 1956. As a result. All above efforts resulted in the conservation of 4. 1956.49 lacs). Technology absorption and Foreign Exchange earnings & outgo.74 lacs. forms part of this Report. The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares. Postal Ballot The Company proposes to seek approval of members on June 21. 1988 is as under. Annual Report 2009-10 | 33 . 2010. However.638 units of electricity across the chain during the year which amounts to appx. improvement in pumping system. 3. no response has been received. by Karvy Computershare Private Limited our Registrar and Share Transfer Agent. 309. DSM initiatives to reduce the excess unutilized demand there by reducing the fixed energy cost. in pursuance of Section 219(1)(b)(iv) of the Companies Act.40 lacs (previous year Rs. Demat Suspense Account Unclaimed Shares There are 315 Equity Shares of the Company which were allotted in Initial Public Offering of 2005. The Company earns Foreign Exchange on sale of its merchandise to its customers. 2. Making investment in securities by subscription/ purchase or otherwise / loans or advances/ guarantee/ security(ies) etc. The Company also proposes to commence energy auditing. Any shareholder interested in such particulars may inspect the same. reduction in energy cost in due course of time.Directors' Report Shopper's Stop Ltd. 1956. in view of compliance of Clause 5A of the Listing Agreement. A certificate to this effect from Mr. The Company is engaged in the continuous process of energy conservation through improved operational and maintenance practices. as amended. 1956. 4. Govind Shrikhande. through postal ballot in respect of the following: 1. 200 Crores under Section 372A of the Companies Act. read with Companies (Particulars of Employees) Rules 1975.57 lacs). Such shareholders may approach the Company with their correct particulars and proof of their identity for crediting requisite shares from the Demat Suspense Account to their individual demat Account.224. Installation of lighting energy saving devices (Step down transformer) for Energy conservation. 4. Controlled the energy consumption of HVAC system by optimizing the temperature inside the stores.availability of shareholders correct particulars. Optimized lighting by making necessary changes in the circuits and installing the sensors. which is available for inspection at the Registered Office of the Company during its working hours.043. where as Foreign Exchange outgo was Rs. excluding the Statement of Particulars of Employees. President & Chief Executive Officer & Executive Director forms part of this Report.392. To delete the existing Article 150 – ‘Common Seal’ of the Articles of Association of the Company and substituting it with a new Article under Section 31 of the Companies Act. The foreign exchange earnings during the year was Rs. Adoption of Variable Frequency Drives (VFD’s) for Air handling units with temperature sensors. The brief of the particulars in respect of various steps and initiatives taken regarding conservation of energy and technology absorption and its disclosure as stipulated by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules. 3. the said unclaimed shares are credited to ‘Shopper’s Stop Ltd .

For and on behalf of the Board of Directors Mumbai. Govind Shrikhande. For Shopper's Stop Ltd. Acknowledgement Your Directors wish to convey their appreciation to all customers. 1956. April 28. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act. President & Chief Executive Officer & Executive Director of the Company. 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31. In the preparation of Annual Accounts. Your Directors would also like to place on record their sincere appreciation to the employees of the company for the total commitment. section of Annual Report. April 28. we are deeply grateful for the confidence and faith that you have always reposed in us. 2010 and of the profit of the Company for the year ended on that date. And to you our shareholders. To them goes the credit for the Company’s achievements. 2. dedication and hard work at all levels. suppliers. Govind Shrikhande President & Chief Executive Officer & Executive Director Mumbai. the Board of Directors confirm that: 1.Directors' Report Directors’ Responsibility Statement Pursuant to Section 217 (2AA) of the Companies Act. the applicable accounting standards had been followed along with proper explanation relating to material departures. banks and financial institutions for their invaluable support and look forward to continued support in the future. 2010 Chandru L. hereby declare that the Company has adopted a Code of Conduct for its Board Members and its management personnel and they have affirmed compliance with the said Code of Conduct. have been included in the Notes to Accounts. Raheja Chairman Certificate of Compliance with the code of conduct for the financial year 2009-10 I. Shopper's Stop Ltd. 4. 2010 Annual Report 2009-10 | 34 . business partners. Auditors Report The Board has duly examined the Statutory Auditors report to accounts and the clarifications. wherever necessary. 3. they have prepared the annual accounts on a ‘going concern’ basis.

151 28.2010 The options granted to eligible employees are granted at the closing price of the Equity Shares of the Company at BSE on the working day immediately preceding the date of grant. 110/ESOP 2008 .889 — 15.000 Options granted to Senior Management personnels B S Nagesh Govind Shrikhande C B Navalkar Salil Nair Arun Gupta Vivek Mathur 22.150/ESOP IV 122.000 8.000 24.310 11.000 8.904 41.952 — 1.000 4. 1999 as on March 31.810 — 2.443.400 29.03.2005 The options granted to eligible employees are granted at the average of the daily closing price of Equity Shares of the Company at BSE during the period of 6 months immediately preceding the date on which the options were granted.192 45. Information required to be disclosed under SEBI(ESOS and ESPS) Guidelines.2009 The options granted to eligible employees are granted at the closing price of the Equity Shares of the Company at BSE on the working day immediately preceding the date of grant.573 16.810 — 16.353 5.517 109.000 50. 384/65. The options were granted at an exercise price of Rs.934 42.445.302 50.2 200.166 — 6.2004 Rs.000 Annual Report 2009-10 | 35 .1 516.080 9.306 3. 382/- Options vested Options exercised and total number of equity Shares arising as a result of exercise of Options Options lapsed/Cancelled Variation of terms of options Money realised by exercise of options Total number of Options in force 113.Annexure to the Directors' Report Shopper's Stop Ltd.781 ESOP 2008 .610 — — 13.517 — — — — 42. The options were granted at an exercise price of Rs.700 — — 512.240/ESOP V .000 — 12.204 3.700 3.700 — — — 200.000 10.12.000 130.980 7.560 9.638 81.05.964.000 20.270 4.02.469 2.640 01. The Options were granted at an exercise price of Rs.140 5.470 3. 2010 Description Options Granted Date of Grant The pricing formula ESOP III 155.1 100.340 01.000 50.000 6.230 7.249 66.04.2005 Rs.

shall be disclosed. whose exercise price either equals or is less than the market price of the stock. 3. 540/Rs. 17. The impact of this difference on profits and on EPS of the Company shall also be disclosed. Where the Company has calculated the employee compensation cost using the intrinsic value of the stock option.000 29.2007 Rs. S.43%. the difference between employee compensation cost so computed and the employee compensation cost that shall have been recognised if it had used the fair value of the option.39 lacs.088. Date of Grant 29.000 50.Annexure to the Directors' Report Shopper's Stop Ltd.353 5.931 * 2.270 — — — 11.53 per share (higher by Rs.07.78. dividend yield of 0.40 per share.980 7.2010 35% .1.39 lacs and the basic EPS of the Company would have been Rs. Had the Company followed fair value method for accounting the stock option compensation. Consequently profit after tax would have been higher by Rs.29. 540/Vesting Schedule 30% . risk free rate of 6.29.30% and stock price of Rs. A description of the method and significant assumption used during the year to estimate the fair values of options.000 130.2008 40% .29.000 50. 485/100% .43 per share (higher by Rs.2006 23.29.07.29.568 options granted under ESOP V-2 are not being surrendered by resigned employees.2009 ESOP V .06%.12.2012 Total 632.2007 30% . expected life of 3.29.11 per share).000 — — — Diluted Earnings Per Share (EPS) pursuant to issue of shares on The diluted EPS of the Company calculated after considering the exercise of option calculated in accordance with (AS) 20 Earnings effect of potential equity shares arising on account of exercise of Per Share. 17.07.230 — — — 13.3 ESOP V .2009 35% .000 — — 12. 1. B.28 years. Annual Report 2009-10 | 36 .08.07.94 and weighted value of the options shall be disclosed seperately for options average fair value is Rs.29.07.000 330. Options granted to any employee during the year amounting to 5% or more of options granted during the year B. ESOP 2005 Scheme ESOP V . Navalkar Salil Nair Options granted to any employee equal to or exceeding 1% of the issued capital of the company at the time of grant 22. 3. options is Rs. the compensation expenses would have been lower by Rs.29.07. Weighted average exercise prices and weighted average fair Weighted average exercise price is Rs.07.07. of Options 157.2011 30% .560 9. 14.931 Black Scholes Option Pricing model using Volatility of 49.07. The Employee Stock Options granted to employees under these ESOP 2005 Schemes have been surrended to the Company.13 per share) and the diluted EPS would have been Rs.306 — — — 50.2 * No. Nagesh Govind Shrikhande C.2006 Grant Price Rs. 185.088.186.5 145.

ii. significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements. significant changes in internal control over the financial reporting during the year. The Board of Directors Shopper’s Stop Limited Eureka Towers. We hereby certify that: Shopper's Stop Ltd. instances of significant fraud of which we have become aware and the involvement therein. Mindspace. illegal or violative of the Company’s code of conduct. if any. B. if any. (d) We have indicated to the auditors and the Audit Committee: i. and iii. of the management or an employee having a significant role in the company’s internal control system over financial reporting. applicable laws and regulation. deficiencies in the design or operation of such internal controls. 9th Floor.Certification by CEO & CFO To. 2010 C. ii. to the best of our knowledge and belief. B Wing. (b) There are. Malad (West). no transaction entered into by the Company during the year which are fraudulent. Mumbai – 400 064 Dear Sirs. (c) We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and we have disclosed to the auditors and the Audit Committee. (a) We have reviewed the financial statements and the cash flow statement for the year and that to the best of our knowledge and belief: i. these statements do not contain any materially untrue statement or omit any material fact or contain statement that might be misleading. Link Road. of which we are aware and the steps we have taken or propose to take to rectify these deficiencies. these statements together present a true and a fair view of the Company’s affair and are in compliance with existing accounting standards. For Shopper's Stop Limited Govind Shrikhande President & Chief Executive Officer & Executive Director April 28. Navalkar Group Chief Financial Officer Annual Report 2009-10 | 37 .

occupying 28 mn square feet. The Indian retail market – the fifth-largest retail destination in the world – was ranked the most attractive emerging market for investment in the retail sector in management consultancy firm A. the internet allows consumers to compare and contrast price points and product benefits and thus make informed decisions on purchases. and continuous innovation has now become the key retail strategies which the modern retail players are focusing on. focus on profitability and sustainable growth rather than exponential growth. profitability and easy accessibility and can be utilized across diverse products and services in grocery as well as non-grocery items. The next big wave is expected to be internet retailing. followed by North. this sector is expected to invest around US$ 503. A study has pointed out that organised retail penetration.60 mn. already an accepted mode of shopping in the more mature western markets. Moreover. While internet surfing. The availability of quality real estate for modern retail has undergone a sea change. This could go further up to US$ 1. Modern retailers have taken strategic measures like store rationalisation. Unlike other developed countries. branding. In 1999. changes in supply chain. Cost control. retail was about US$295 bn. in innovation of retail formats and consolidation and collaboration between competing players to synergise costs and scale. Indians are not overly enthusiastic about non-store retailing. However. By the end of 2008. Differentiation. is all set to witness maximum number of large format malls and branded retail stores in South India. compelling customer experience. along with the slowdown came lessons for the modern retail players. Internet retailing allows greater access to products. The modern retail industry today stands at a size of US$ 25 bn. Indian consumers’ prefer to touch and feel items before making their purchasing decisions and prefer to go to a Annual Report 2009-10 | 38 . retailers and consumers alike. The benefits of internet retailing are unanimously accepted and acknowledged by most manufacturers. From mandis to malls. according to the Department of Industrial Policy and Promotion (DIPP). By the end of 2006. exploring commoditization. The slowdown in the past year and a half has taken a certain toll on the modern retail in India. These will be beneficial in the long-run. From manufacturers and retailers’ perspective.26 billion in the next four to five years. Indian retailers are also looking for opportunities to partner with foreign players as it could bring in the much needed capital and expertise. is likely to reach only around 10. In the current scenario. the country had 137 shopping malls. are emerging as the favoured destinations for the retail sector with their huge growth potential. which currently accounts for around 5 per cent of the Indian retail market. especially with the Indian economy playing a crucial role globally. Further. consolidation of operations and improvement in IT infrastructure.4%. enabling second tier cities and suburbs to acquire a wider variety of goods. it is estimated that there were more than 450 malls in India. accounting for at least 120 mn square feet. The attractiveness quotient of India as a retail destination is clearly borne out by the fact that as of July 2009. Modern Retail Today The modern retail sector.Management Discussion and Analysis Report Indian Retail – The Story So Far Shopper's Stop Ltd. internet retailing offers benefits in the form of cost-effectiveness. have become the new mantras in the industry which augur very well for its future. Some key trends have now emerged in the Indian retail industry in real estate (rental partnerships. Tier II cities like Noida. At the same time. FDI inflows in single-brand retail trading stood at approximately US$46. collectively measuring less than 1mn square feet. rental holidays for property delays). Kearney’s eighth annual Global Retail Development Index (GRDI) in 2009. Out of the Indian GDP of about US$1036 bn in 2007. The transformation of Indian retailing is to be noticed.2 million in retail technology service solutions in the current financial year. which was expected to touch 16% by 2012 from the current 5 %. many new international apparel brands are preparing to open outlets in India. Kochi and Gurgaon. at a CAGR of 40 per cent. Amritsar.T. internet retailing and actual purchases are currently confined to a very niche consumer base. share of purchasing power. India had three shopping malls. West and the East in the next two years. emailing and other web-enabled services gained vast popularity. Indian retailing has come a long way. revenue share model.

Also the products are not standardized and there could be tremendous amount of variability in products. According to Investment Commission of India (ICI) data. Westernisation has helped in stimulating interest in a wider range of modern retail concepts.25 bn in 2009 to US$755. 13. the modern retail industry has bounced back in 09-10 on the back of improved customer sentiment and astute cost management. Chandigarh etc. Furthermore. Strong underlying economic growth. • Economic growth: Though Asia. physical store instead. but its recovery has been remarkable. population expansion. The Indian domestic demand is showing clear and robust signs of growth.09 bn by 2014. modern retailers in India have lined up impressive plans for growth and expansion. Whilst sales over the internet for Indian modern retailers are very miniscule today. sizes etc. This trend has in fact been a telling reason for return to health of the economy and the modern retail industry. The growth in the overall retail market is expected to be driven. and consequently India was initially badly hit by late 2008’s sharp global economic slowdown. Urbanisation: Economic growth has fuelled urbanisation region-wide as rural dwellers have moved to the city in search of higher paid employment. with a large young population that has the ability and keenness to spend. modern retailers in India have decided to adopt a mix of online and offline retailing. therefore made by these players will go along way in increasing penetration and growth of modern retail. and by 2014 their share of the regional market is expected to be close to 94%. There will also be increasing penetration of India’s second and third tier cities.. largely by the explosion in the modern retail market. 4. high-spending urban audience have outweighed the downsides for now. the increasing wealth of individuals and the rapid construction of organised retail infrastructure are key factors behind the forecast explosive growth in India’s retail sales.6% of the total retail segment. Industry investment: With modern retail model intact and the potential for serious players clearly being beyond doubt. Annual Report 2009-10 | 39 . The main drivers of Indian modern retail growth can broadly be defined as economic growth. This has proved to be the key challenge for internet retailing and it therefore enjoyed only a restricted appeal for Indian consumers. The investments. this segment accounted for US$12. A positive five-year economic forecast. ignoring the threat of a renewed slowdown on the back of unwinding fiscal stimulus should contribute to healthy wage growth and sustained middle class expansion. Such favourable geographic demographics have led urban real estate prices to soar but the benefits of a captive.Management Discussion and Analysis Report Shopper's Stop Ltd.10 bn of sales in 2006. such as Pune. Modern Retail Growth Outlook After the turbulence of 08-09. This has been a major fillip for the urban-centric modern retail sector. • • Population growth: India has favourable age demographics.1% of the total retail sales in the country. Modern retail sales will reach US$99. favourable population demographics and increased industry investment. increased multinational interest & involvement in the Indian modern retail will further fuel investments and growth. it is expected to become larger in the coming years. As per study by Business Monitor International Ltd. The greater availability of personal credit and a growing vehicle population that provides improved mobility also contribute to a trend that is likely to see the value of the retail segment grow from an estimated US$427. Besides pure play internet retailers. Economic growth should create an expanding middle and upper class consumer base.47 bn by 2014. Retail sales of Asian countries in 2009 were an estimated US$2. China and India alone accounted for almost 93% of regional retail sales in 2009. dramatically lifting its potential audience size. This will also result in the introduction of retail best practices that support sales.29 trn. The key Growth drivers of modern retail in India remain unchanged and actually substantiate the business model. which are major contributors to retail sales growth. • • Westernisation: Increased exposure to Western consumption habits has fuelled consumerism not only in India but also in developed and emerging Asia.

However. with the best in the industry to pay our associates accordingly. With a total membership exceeding 1. The next wave of expansion is expected to happen over the next 30 months and the timely execution of this expansion will be critical. Price is not essentially a differentiator for the Company. • Delay in store delivery: Majority of the new stores planned are in malls and any delays in the construction of the malls will delay the company’s retail expansion plan. Furthermore. The Company has successfully grown gross margins year on year. which have helped us acquire preferred properties at competitive rates. better commercials terms with merchandise suppliers etc. First Citizens: Our First Citizens Club has continued to be the main stay of our business. Shopping Experience: The Company pioneered the departmental store format in the Indian market when the Indian consumer was deprived of choice. We benchmark our compensation and benefits through consultants. but is also a very strong strategic tool. • Employee retention: With the Indian economy back on a growth path the Company believes that employee satisfaction and retention will become very important. • Management Strength & Corporate Governance: The Company has a professional and well-established management team. Annual Report 2009-10 | 40 . the Company believes that it is well placed in negotiations / re-negotiations of property rentals. Your Company believes that this problem will persist until the industry reaches a steady growth phase. Risks and Concerns: • Execution: We believe the key risk to our growth is execution risk. headed by Mr.e. The Company has a strong execution team and we believe it has the capability to execute varied retail formats. The demand for reasonably experienced personnel in modern retail will only increase in the near term and long term. and the case is no different for the Company. with our four Distribution Centers covering more than 400.) to bridge them.000 square feet handling over 400. • • • Strong focus on Systems & Processes: We continue to invest in our front and back end processes and systems. Customers were drawn by the shopping experience. Rentals are expected to harden once again in the near term. and working 24x7. • Strong bargaining strength: Having been in existence for so many years and due to its strong brand image. process and technology will drive sustainable and profitable growth for the company. Enhancing our Human capital: We periodically assess our Customer Care Associates (CCAs) across all levels through assessment centers to identify competency gaps and use development inputs (i.6 million. This is the differentiation that the Company continues to bank on.Management Discussion and Analysis Report Strengths: • Shopper's Stop Ltd. job rotation etc. • Pressure on retail lease rentals: Rent is one of the largest components in a retail business’ fixed costs.000 SKUs per year. Your company believes that its First Citizens will continue to drive its growth by increased average expenditure in our stores which will be aided by targeted promotional activities. • • Strong understanding of the real estate business: We benefit from our Promoters’ association with the real estate business and their relationships with developers. the Company’s unwavering focus on good corporate governance has been a beacon for the industry. Govind Shrikhande. training. The Board has 5 independent Directors. the company strongly believes that its loyalty program is not only a source of substantial competitive advantage. The company believes that continuous investment in people. the Company has built up a robust pipeline of future stores and believes that delays will not materially affect expansion. The Company imparts special training to its employees to ensure that service is not compromised on. Our internal and external auditors are amongst the Big 4 audit firms of the globe. shopping experience is. Strong distribution and logistics network and supply chain: We have created a strong distribution and logistics network.

• Preferred partner for foreign players: Your Company believes that by virtue of it’s presence across all lifestyle categories in the departmental format. Clinique which retails skin care products. Hence there are certain levies / cascading effect of taxes on the business which are proving to be a very large burden as there are no modes for the industry to recover or pass on these levies. Annual Report 2009-10 | 41 . The Company has also made a successful foray into internet retailing through its e-retailing portal. the Company expects many new entrants thus increasing competition. has diversified into multiple formats viz. the rise of discounting and its extension beyond grocery retail could pose a threat to retail sales values. HomeStop which retails hard and soft furnishings. it is expected that the returns from these will have a delayed gestation period than what was originally envisaged. Government levies: Retail is currently not viewed as an industry in India. • Terrorism: Due to the sheer volume of people visiting retails outlets coupled with easy access. Price wars: Although it stimulates the sector in general.A. there by enriching the product bouquet for it’s customers and in turn increasing opportunities for product diversification and profit enhancement. M. it’s strong brand value and it’s presence in the books and music segment. if not to retail volumes. which retails high end cosmetic products. Crossword for books. it is best placed to bring in international brands into the country.Management Discussion and Analysis Report • Shopper's Stop Ltd. retail is considered as a soft target and hence more prone to terror attacks as compared to others. improve city wise penetration and increase market share in cities where it’s stores already exists remains unchanged. Competitive rivalry in the industry: There is intense rivalry among leading national retailers for new locations and quality real estate. Threat of new entrants: With India becoming an attractive retail market and the gradual increase in foreign participation in the sector. • Hypercity – Leveraging the potential in mixed retail: The Company has entered the hypermarket segment. Mothercare which retails infant and kids merchandise and airport retailing. The stores run by Hypercity have shown very impressive performance in the year gone by. in it’s constant endeavour to capture wallet share. • Investee Companies: The company has invested in other entities and in the current economic scenario. which is a high growth segment by acquiring a 19% stake in Hypercity. music and stationery. • Format diversification: Your Company. Threats: • • • • Economic recovery: A slower than expected economic recovery remains the biggest risk to the Indian retail outlook. We believe that the scope for hypermarkets in India is immense. This will further sharpen in the coming 2 years as the established players will focus on growth.C. Delay in the roll out of the GST regime is also a matter of concern. Price wars became a mainstay of the mainstream grocery retail sector throughout the economic downturn and the extension of this trend into homeware or apparel could undermine retail profit margins. The Company strategy to increase the number of departmental stores. Opportunities: • Geographical reach: Your Company continues to increase its Pan-India footprint and is expecting to launch into its next expansion phase in the next 30 months. However economic data of the last 3 quarters suggest that the recovery is well underway. by tying up with the Nuance Group of Switzerland.

6 24. This is computed through manual count in all stores during trading hours. Tracking conversion helps the retailer understand the productivity of his front-end store employees and the attractiveness of the merchandise and services.8 22.) 20 10 5 0 2004-05 2005-06 2006-07 Year 2007-08 2008-09 2009-10 (Source: Company MIS) Conversion Ratio: Conversion is the ratio of the number of transactions (Cash Memo) versus the total customer entry into the stores.9 22. Retailers measure entry as footfalls. 30 Customer Entry Departmental Store 25 19. Conversion Ratio % Departmental Store 29% 28% 27% 26% 25% 24% 23% 2004-05 2005-06 2006-07 Year 2007-08 2008-09 2009-10 25% 27% 27% 27% 28% 27% Conversion Ratio (%) (Source: Company MIS) Annual Report 2009-10 | 42 .9 Customer entry (in mn. which is the number of people entering the stores.3 15 14.9 18.Management Discussion and Analysis Report Customer Entry: Shopper's Stop Ltd.

6% 40. The growth was 10% in gross retail turnover. Personal Accessories. The Non-Apparel contribution to total sales of the Company was 41% in 2009-10.) 21 17 15 10 5 0 1 2004-05 2005-06 2006-07 2007-08 Year 2008-09 2009-10 9 4 14 Sales Per Square Feet 10500 9000 7500 6000 4500 3000 1500 0 2004-05 2005-06 2006-07 2007-08 Year 2008-09 2009-10 6903 7576 7973 8671 8218 7883 25 Sales (like-to-like growth %) 20 (Source: Company MIS) Apparel: (Source: Company MIS) The Apparel contribution to total sales of the company was 59% in 2009-10 as compared to 60% in 2008-09.4% 59. These lifestyle products have high aspiration value. There has been growth in Non-Apparel segment which has resulted in Non-Apparel sales percentage growing. Home Wares. and as the consuming class increases.3% 80% 39. This is primarily due to customer buying life style products.9% Apparels Sales Mix (%) 60% 64.1% 38. Sales Mix (Departmental Stores) Non-Apparels 100% 35. Electronics. Non-Apparel: This category includes Cosmetics.ft have been computed on built-up area.Management Discussion and Analysis Report Sales: Shopper's Stop Ltd. Jewellery.7% 40% 61. Sales (like-to-like growth %) (Departmental Stores) Sales Per Square Feet (in Rs. Leather Goods.2% 60. there will be a big surge in the demand for this category. Books and Music.0% 41. The sales per sq.1% 20% 0% 2004-05 2005-06 2006-07 Year 2007-08 2008-09 2009-10 (Source: Company MIS) Annual Report 2009-10 | 43 .8% 39. Gross Sales both at chain level and for Like-To-Like stores showed an improvement as compared to last year.9% 61.0% 58.

K exclusive agreement to retail men’s & women’s wear has posted a healthy growth. Our Austin Reed U.): Transaction size represents the amount spent by each customer on his buying.1% of sales as compared to 19. As a part of it’s strategy to provide a wide range of merchandise to customers.Management Discussion and Analysis Report Private Label & Private Brands: Shopper's Stop Ltd. This is computed by the total sales divided by the number of cash memos.) Departmental Store 2400 2100 1800 Transaction Size (Rs.9% last year and private label sales remained constant. your Company aims to fill in the gaps in the national brand offering through its private labels & exclusive arrangements with private & international brands. for their Men’s and Women’s Wear. Your Company aims to provide a differentiated and unique offering to the customer through its own private labels as well as through exclusive private brands. Average Selling Price (Departmental Stores) 900 821 Average Selling Price (Rs. The contribution of private label is at 18. Your company has got an exclusive arrangement for departmental store business with MUSTANG JEANS.) 800 704 647 605 759 855 700 600 500 400 2004-05 2005-06 2006-07 Year 2007-08 2008-09 2009-10 (Source: Company MIS) Transaction Size (Rs. Tracking ASP helps the retailer to align the offering as per the customer segment as well as improve the productivity of the floor space. Transaction Size (Rs. a German Brand. Average Selling Price (ASP): Average Selling Price is the Gross Retail Sales divided by the number of units sold.) 1500 1200 900 600 300 0 2004-05 2005-06 2006-07 Year 2007-08 2008-09 2009-10 1278 1562 1366 1713 1843 2030 (Source: Company MIS) Annual Report 2009-10 | 44 .

Your company’s ability to present on the shelves correct merchandise assortments in the right mix.Management Discussion and Analysis Report Merchandise Purchase: Shopper's Stop Ltd. The profit enhancement department. provide prompt replenishments and manage pricing.70% 0. Shrinkage: Shrinkage in the retail business is defined as the loss in inventory through a combination of shop lifting.65% 0. style.52% 0. Our well established systems and processes in Buying & Merchandising & Logistics enables us to efficiently manage the flow of inventory to stores.60% 0.40% of the Turnover and our endeavour will always be to lower this ratio through proper monitoring and continuously reviewing Inventory management processes and systems. Suppliers are selected after evaluation based on fairly stringent parameters which ensure the quality & reliability of supply.47% (Source: Company MIS) Sustaining high Gross Margin: The gross margin has shown improvement and has increased during the year to 31. improved sales mix with higher contribution from lifestyle Annual Report 2009-10 | 45 .46% 0. should the need arise. Alternate distribution channels for inventory have also been put in place as a contingency. The Company believes that an increasing share of revenue from private labels. We regularly monitor sales trends to optimize inventory levels.40% 0.50% 0.41% 0.55% 0. which not only monitors Shrinkage on a regular basis but also looks at various factors that could lead to Shrinkage at stores and distribution centers. we enter into arrangements with vendors in various business formats such as Outrights Buy/Sale or return. Store Operations along with the Supply Chain team have worked together and monitored the Shrinkage level on a month on month basis which has resulted in the Shrinkage percentage being controlled at 0. Supplier Risks: Our broadly varied offering necessitates alliances with a large number of suppliers from various business sectors.40% 0. colour & fashion is one of its most critical success factors. pilferage. Consignment & Concessionaire/Conducting arrangement.7% as compared to the last year. We have focus on inventory control and have set up a separate department called profit enhancement. and errors in documentation and transaction processing that go unnoticed. A team of Buyers & Merchandisers continuously ensure that the pricing strategy and value proposition are completely in tune with the customers’ expectations. In order to mitigate the risk involved. Shrinkage (as a % of Sales) 0.9% from 31.45% 0.41% 0. Your company believes in a broad distribution of risk with no high dependency on any single supplier and has a diversified supplier base.35% 2004-05 2005-06 2006-07 Year 1007-08 2008-09 2009-10 0.

Management Discussion and Analysis Report Shopper's Stop Ltd.660 7.6% due to improved gross margins. perfumes and cosmetics). Consequently the depreciation charge for the year is lower by Rs. Inventory: The inventory as at the end of current year is Rs.726 lacs from Rs.244 lacs as against Rs. The Operating Profit Margin has grown to 7. Dividend: The Company has proposed a dividend of 15% amounting to Rs. rationalization of costs.498 lacs as at the end of the last year. leather. watches. 6.5% 7.5% 3.6% EBIDTA (Rs.503 11. EBIDTA 14000 12000 10000 8000 6000 4000 2000 0 2004-05 2005-06 2006-07 Year Operating Profit (without exceptional items) % to Gross Retail Sales 2007-08 2008-09 2009-10 6.989 lacs as against Rs.6% from 3.14. 4. Annual Report 2009-10 | 46 .372 lacs. the depreciation rates were revised from 1st April. 2. Depreciation: As a result of the review of the useful lives of fixed assets.874 6. improvement in like to like sales growth.190 lacs.023 lacs. 2.7% 3.e.924 Interest: Interest cost has reduced to Rs. 14. Inventory holding period is higher at 105 days during the current fiscal against 92 days last year due to opening of four new stores during the year. Profit after Tax: The Company has achieved post tax profit of Rs. and shrinkage control have helped improve gross margins. in millions) 4.924 lacs in the previous year.726 8. jewellery. products (i. right sizing of some departmental stores / new business formats.6% 5. Operating Profit: Operating Profit (without exceptional items) has increased by 138% to Rs. 2009. The inventory has been valued at lower of cost and net realizable value. which is an increase by 179% over the last year.560 lacs mainly due to reduction in cost of funds and reduced borrowings. as against a loss of Rs.360 8. 3.9% 5. 5. Vendor management as also sourcing ability has improved with scale and would accrue more economies and higher gross margins going forward. 11. 611 lacs (Including Corporate Dividend Tax).

GMROI helps to optimize inventory levels.23 2.0 GMROI (Rs. per unit of retail space) 2700 2576 2520 2500 2330 2300 2353 2471 2100 1900 1700 2004-05 2005-06 2006-07 Year 2007-08 2008-09 2009-10 (Source: Company MIS) Annual Report 2009-10 | 47 .5 2.224 lacs. We look at our Gross Margin with reference to our Space.5 3.29 3.0 2004-05 2005-06 2006-07 Year 2007-08 2008-09 2009-10 2.0 2. GMROF helps to maximize the cash margins and GMROL helps to increase labour productivity.Management Discussion and Analysis Report Liquidity: The cash generated from operations was Rs. GMROI GMROI 4. 8. Productivity / Operating efficiency parameters: Shopper's Stop Ltd.e.17 4.35 (Source: Company MIS) GMROF GMROF 2900 2735 GMROF (Rs.5 4. Gross Margin Return on Floor Space (GMROF) and Gross Margin Return on Labour (GMROL). Inventory) 3. Inventory and Labour to monitor our efficiency with the help of 3 indicators i.62 3. Gross Margin on Inventory (GMROI).75 2.

Management Discussion and Analysis Report GMROL GMROL Shopper's Stop Ltd. The summit also becomes a platform for your company as well as its partners to share their experiences with each other.198.000 1.000 1. This is an activity with more than 100 vendors/partners attending the summit.593 1.417. To evaluate this satisfaction and expectation. 1. Customer.100. Your company also invites well known international and national speakers to share learning and experience which is closely related to Retail. current strengths and concern areas thereby help set a clear roadmap for improvement and better performance.270.80 2007 4. a part of IMRB (Indian Marketing and Research Bureau) to do an impartial evaluation of our relationship with various stakeholders.000 2004-05 2005-06 2006-07 Year 2007-08 2008-09 899.200. This helps your organization understand the expectations of various business partners. Logistics.768 1. Your company also recognizes the performance of top partners who are rewarded with “SHOPPER’S STOP PINNACLE AWARDS” during this summit.000 800. Our PSI scores for the five years are as below: Year Scores Partnership for Progress: Partnership for Progress (PFP) is a vendor meet which your company conducts annually. Brand.400. apart from exploring various business possibilities with each other. your company has appointed CSMM (Customer Satisfaction Measurement and Management).000.992 2009-10 (Source: Company MIS) Partner Satisfaction Index (PSI): The performance of any company depends on the association and relationship it builds with various vendors/partners over a period of time.609 1.045 1. your company gets and gives opportunity to the top retail vendors/brands to discuss and strengthen the association. per employee) 1.98 2006 3.000 1.000 900.000 700.046.000 1.000 500.014 1.300.00 2008 4.500.89 Annual Report 2009-10 | 48 .06 2009 3. 2005 3.032. During this event. etc.000 GMROL (Rs.000 600.

2009. At Shoppers Stop. helps us understand the strength and weakness of the organization to take immediate corrective measures. and we have added a whole new dimension to this.05% growth in trainings hours extended to associates across all levels.95 2010 3.05 The Gross Margin Return on Labour at 12%.94 Growth Over Last Year % 46. This is a first-of-its-kind arrangement in the history of India’s advertising that a Brand mascot is being licensed for merchandising. loyalty index. was the central theme of all our advertising. For the year under review we have provided the Baby Kangaroo program (BK). ensuring a fair and transparent growth process.T) was conducted for 37 days with an exhaustive content through various internal and external trainers. Annual Report 2009-10 | 49 2006 4. The assessments were conducted online through Reliance Web World. This has propelled us to bring alive the effervescence of mega starrer films such as Love Aaj Kal. correction and consolidation worthwhile. Chance Pe Dance and Karthik Calling Karthik.A. The Managerial & Supervisory Training program (M. The objective was to ensure that the associates would be well versed with Technical Skills and Soft skills. planning and calculating our future move. consumer spending and demands decreasing was a phase that was to pass by. In an ongoing process to increase the growth and development for our associates we have been looking at various levels of developmental interactions. develop.S.Y. promotions and events this year. This year the ASI score is at 3. this merchandising line fits well in our merchandise offering.45 Training Hours 09-10 12728.11 2007 4.95 and the overall satisfaction levels were more or less the same across different levels. train and groom them for the next level and provide an opportunity for career progression. The global meltdown and recession. The objective of going online was to ensure efficiency and fairness to the entire selection process.01 2009 3. The Associate Satisfaction Index (ASI) is conducted through an online survey yearly to understand the level of satisfaction associates have towards their work.Zoozoo.Management Discussion and Analysis Report Human Resources: Shopper's Stop Ltd. Year Overall Loyalty Index Marketing: Carrying forward our new brand philosophy of ‘Start Something New’. Training Hours 08-09 6867. The focus on Learning & Development has been an ongoing an integral part of the organization where there has been a 46.2010 covering 486 associates in order to provide growth opportunities. We stood strong. The phase took its turn to bring us to a grand turnaround making each and every effort. We have also set a Retail precedent through an exclusive retail arrangement with Vodafone-Essar for merchandising (in specific categories) of their brand mascot . retaining our staff without going in for layoff. we have been always looking at providing our esteemed customers with exclusive merchandise. Our company has conducted 76 assessment centers in the F. to identify potential associates. job satisfaction.95 . Their immense popularity and success is a clear indication of the deep permeation of Bollywood in Indian fashion and the growing desire of Indians to emulate their icons. Character merchandising is a new emerging trend in India targeted at the Youth. has improved during the year.05 2008 4. Given the increasing size of the Youth Audience at Shoppers Stop.

The promotion was very well received and it helped us further reinforce our strong relationship with this member community.“First Citizens”. During the current year. staff. This year.Management Discussion and Analysis Report Shopper's Stop Ltd. The First Citizen programme has 3 tiers . Under this promotion the member earned 3 times the reward points besides lots of other special offers and deals. Overall Customer Satisfaction Index: January 2006 60 Loyalty Programme: Your Company has pioneered India’s first retail loyalty program . Customer Satisfaction: At Shoppers Stop we strive to provide our customers with the best overall experience of shopping with us.Classic Moments (entry level).First Citizens First.77. Through this service First Citizens get all the information that they want on their mobile phones simply by sending an SMS. benefits and promotions. There were many category based promotions that were well received by our customers – Watch Out festival. loyalty programme. Stares & Glares. Home delivery of altered merchandise. These reward points can be redeemed for a wide variety of merchandise at your Company’s stores. Annual Report 2009-10 | 50 . schemes and promotions to name a few and undertake improvements in various areas. These festivals focused on offers that were available across all brand available in our store for the particular category. The First Citizens base grew by 26% from 12. First Citizens also earn differential reward basis on their current tier of membership.578 customers in this year. August 2006 63 November 2007 63 February 2009 81 First Citizens always stay updated with all details pertaining to their membership as well as the best of offers and privileges available. Foot fair.both in-store as well as those organised outside the stores. Invitations to exclusive events . We also include select competition stores in our surveys in order to measure experience in our stores as compared to competition. the company initiated an exclusive promotion only for First Citizens – First Citizens’ Fiesta.especially during the festive season. To measure the customer experience we conduct customer satisfaction surveys to evaluate a range of parameters including merchandise range and quality. First Citizens receive:• Reward points on their spends. • • • • • Exclusive schemes. Silver Edge and Golden Glow. the First Citizens contributed 75% of the Company’s annual sales. Members fall into the various tiers on the basis of their spends with us. through a unique service . store environment. Extended and exclusive shopping hours . transaction efficiency. Glitter & Glamour to name a few.109 to over 16. This year also saw our focus shift from experienced based promotions to category based promotions.11. Exclusive First Citizens lounge at select stores to relax after hectic shopping. Special previews before the sale periods. Co-branded Credit/Debit card programme with Citibank: Your Company in association with Citibank has offered its First Citizens an option to add on a credit card to their existing loyalty cards.

information and communication procedures. there is an option of activating a debit card. The Company has an integrated approach for management of risk and has formulated the framework for regulatory and risk management. For customers who are averse to credit. we invested in IT infrastructure upgrade at the data center to sustain the transactional systems as well as the Customer Relationship Management & Loyalty applications. which requires risk assessments and related policies. All operating parameters are monitored and controlled.000. The Company has a sound system of Internal Controls for financial reporting of various transactions. Risk Management and Internal Control: Effective governance consists of competent management. 2010. Compliance with policies. This enables First Citizens to add on a credit line to their purchases. and corrective measures are carried out towards further improvement in systems and procedures and compliance with Internal Control System. EMI schemes etc. which supports several legendary retail brands in the U. implementation of standard policies and processes. the operational IT cost was contained with a 15% reduction over the previous year.S. maintenance of an appropriate audit program with internal control environment effective risk monitoring and management information systems (MIS). the immediate benefit to Operations and Supply Chain has been visibly improved response times for queries. The MIS forms an integral part of the Company’s control mechanism. Reports of internal auditors are reviewed by the Audit Committee. and a monitoring mechanism for the control environment. for buying at your Company’s stores. These internal control procedures ensure the following: • • • Efficient use and protection of resources.00. with renegotiations and vendor management. With the planned growth in business operations over the next 2 years. As on 31 March. updates as well as day beginning and end Annual Report 2009-10 | 51 . The board also recognizes the work of the auditors as an independent check on the information received from the management on the operations and performance of the company. With this. efficiency of operations and compliance with relevant laws and regulations commensurate with its size and nature of business. In the year 2009-10. with material deviations from the annual planning and budgeting and business outlook including capital expenditure reported to the Board on quarterly basis. cash back schemes. Middle East and Europe. procedures and statutes. Technology Initiatives: Your company continues to invest in technology solutions with a prudent mix of customized and packaged solutions. standardizing the definition of internal controls. UST Global based in Trivandrum. It also provides a framework for risk management and regulatory compliance. the number of members in the co-branded card programme was over 2.Management Discussion and Analysis Report Shopper's Stop Ltd. Amongst the key initiatives taken up some of them were: In April 2009 your company out sourced its ERP operations to an Indian partner. a control-based environment and activities. Accuracy and promptness of financial reports. They also have the added advantage of being able to choose from amongst various attractive financing options. The outsourcing provides the organization capacity to focus on business innovation while moving away from day to day support activities. The Company has a well-defined system of management reporting and periodic review of businesses to ensure timely decision-making.

Cautionary Statement: The statement made in this section describes the Company’s objectives. The detailed Corporate Governance Report is attached with this report. Annual Report 2009-10 | 52 . depending on the economic and climatic conditions. These investments will help us manage the growth in customers and transactions. continued investments in data warehouse and business intelligence now help us track customer trends. preferences and analyze behavior. websites as social media gains momentum across the globe. The Internet offers a promise to engage with many tools. etc. expectations and estimations which may be ’forward looking statements’ within the meaning of applicable securities laws and regulations. Keeping in line with trends on the Internet to engage with customers and stakeholders. your company now has a new look brand site with several new features like promotions. Another initiative to address the growing data storage requirements was the induction of world leading storage solutions from EMC Corporation. processes.Management Discussion and Analysis Report Shopper's Stop Ltd. Equipped with rich transactional information. a leader in advanced analytics. Marketing and B&M teams to create actionable insights with help from tools such as SAS Analytics. we work with the Loyalty. Being ahead on the adoption curve. Government policies and other incidental factors which are beyond the control of the Company. a new look store locator. The annual results can differ materially from those expressed or implied. Corporate Governance: Your Company has taken steps to ensure that the Corporate Governance guidelines are adopted and fully complied with. projections.

Pardiwalla Partner Membership No. adopted by the company for ensuring compliance of the conditions of Corporate Governance. (2) The compliance of conditions of Corporate Governance is the responsibility of the Management. It is neither an audit nor an expression of opinion on the financial statements of the Company. Our examination was limited to procedures and implementation thereof. 117366W) P. For Deloitte Haskins & Sells. B. (3) In our opinion. we certify that the company has complied with the conditions of Corporate Governance as stipulated in the abovementioned Listing Agreement. and to the best of our information and according to the explanations given to us. (4) We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the Management has conducted the affairs of the Company. (1) We have examined the compliance of conditions of Corporate Governance by Shopper's Stop Limited (the Company) for the year ended on 31 March 2010 as stipulated in Clause 49 of the listing agreement of the Company with the stock exchanges. 2010 Annual Report 2009-10 | 53 .Auditors' Certificate on Corporate Governance To the Members of Shopper's Stop Limited Shopper's Stop Ltd. 40005 Place: Mumbai Date: 28 April. Chartered Accountants (Registration No.

IA of clause 49 of the Listing Agreement. The key decisions are taken after detailed deliberations and discussions by the Board. across all the companies in which they are Directors. Raheja Mr. Deepak Ghaisas Mr. The Company always ensures that Board members are presented with all the relevant information on vital matters affecting the working of the Company including the information as interalia specified under Annexure . competent and highly respected persons from their respective fields and provide strategic direction and thrust to the operation of the Company. Nirvik Singh Promoter & NonExecutive Director Promoter & NonExecutive Director Promoter & NonExecutive Director Non Executive Director Independent & NonExecutive Director Independent & NonExecutive Director Independent & NonExecutive Director Independent & NonExecutive Director Executive Director Independent & Non Executive Director Chairman Director Director Vice Chairman Director Director Director Director President & CEO Director 4 4 5 3 5 2 4 5 5 5 Yes Yes Yes Yes No Yes Yes Yes Yes Yes 4 5 4 6 8 14 0 2 3 0 1 1 2 0 2 3 0 1 0 0 0 1 0 1 0 3 0 1 0 0 Annual Report 2009-10 | 54 . Our corporate structure. Mirchandani Mr. We have made conscious efforts to institutionalize Corporate Governance practice and we believe that it shall go beyond adherence to the regulatory framework. of other Directorships & Committee Memberships/Chairmanships Directorships1 Committee Membership1 & 2 Committee Chairmanship1 & 2 Mr. Board of Directors The Board of Directors comprises of ten members including one executive director and nine non executive directors. None of the Directors on the Board is a Member on more than ten Committees and Chairman of more than five Committees (as specified in Clause 49). Raheja Mr. business and disclosure practices have been aligned to our Corporate Governance Philosophy. To ensure that the Company follows the globally recognized corporate governance practices. The Company remains committed to the concept of good corporate governance practices in all its activities to ensure that the ultimate goal of making the Company a value driven organisation. B. Dalal Prof. Govind Shrikhande Mr.Corporate Governance Report Company’s philosophy on Code of Governance Shopper's Stop Ltd. The independent directors on the Board are professionals. We will continuously endeavour to take forward the best practices to enhance stakeholder’s value. Shahzaad S. Nagesh Mr. Raheja Mr. Nitin Sanghavi Mr. Chandru L. Neel C. who are senior. To ensure fullest involvement and commitment of the management for maximisation of shareholders value. To imbibe the corporate values in the employees and encourage them in their conduct. Gulu L. S. The Company has a non executive promoter Chairman and the number of independent directors is one half of the total number of Directors. technocrats and retail experts. Its philosophy on the code of Corporate Governance is: • • • • • To ensure adequate control systems to enable the Board to efficiently conduct the business and discharge its responsibilities to shareholders. To ensure that the decision making process is fair and transparent. The composition of the Board of Directors. Ravi C. their attendance at Board Meetings during the year and at the last Annual General Meeting and the number of other Directorships and Committee Memberships held by them in other Companies are given below: Name of Directors Category Designation Attendance particulars Board Meetings Last AGM No.

Raheja are sons of Mr. Neel C. Company Secretary. 29th July. Vice Chairman. The Company has adopted the Code of Conduct for all Board members and management personnels of the Company. Raheja Mr. 4. 2009 and 29th January. 2009. S. sufficient and credible. Raheja. Nagesh was elevated as a Vice Chairman and Mr. The members of the Committee possess the sound knowledge of finance & accounts. B. The maximum interval between any two Meetings during this period does not exceed four months. to ensure that the financial statement is correct. 2009. 18th August. Shopper's Stop Ltd. 2009. The Chairmanship and the Membership of Audit Committee and Shareholders’ Grievance Committee alone are considered. 2. The Audit Committee invites such of the executives. The role. During the year under review. 29th October 2009. The President & CEO & Executive Director. 29th October 2009 and 29th January 2010. Govind Shrikhande was elevated as President & CEO & Executive Director of the Company w.e. Dalal Prof. To recommend to the Board. No other director is related to any other director of the Company. Nitin Sanghavi Status Chairman Member Member Member Category Independent Director Non-Independent Director Independent Director Independent Director No. Dates for the Board Meetings for the ensuing year are decided well in advance and communicated to the Directors. L. representatives of the internal auditors and statutory auditors are also present at the Audit Committee Meetings as invitees. Mr. Vice President – Legal and Company Secretary of the Company acts as the Secretary to the Committee. Deepak Ghaisas Mr. 2010. All Board members and management personnels have confirmed compliance to the Code of Conduct. The other Directorships and Chairmanships/Memberships of committees held in foreign companies. Shahzaad S. 2. A declaration signed by the Chief Executive Officer of the Company to this effect is appended with the Report. Raheja and Mr. Group Chief Financial Officer. Annual Report 2009-10 | 55 . 14th November. the Committee met four times on 29th April. fixation of audit fees and also approval for payment of any other services.e on 29th April. 1956 are excluded. 29th July.f. of meetings attended 4 3 2 4 Mr. 2009. Prashant Mehta. During the year under review. The Agenda along with the explanatory notes are sent in advance to the Directors. Chandru. The broad terms of reference of the Audit Committee inter-alia is as under: 1. the appointment and reappointment of Statutory Auditors. The Composition of the Audit Committee and the attendance of the members at the meetings held are as follows: Name of Member Mr. The Audit Committee comprises of four Non-Executive Directors. the Board of Directors met five times i. Ravi C.Corporate Governance Report Notes: 1. 1956. powers and functions of the Audit committee is in accordance with Clause 49 of the Listing Agreement and Section 292A of the Companies Act. as it considers appropriate to be present at the meetings of the Committee. To oversee the Company’s financial reporting process and the disclosure of its financial information. Mr. This Code is posted on the website of the Company. 3. private limited companies and companies incorporated u/s 25 of the Companies Act. 2009. Ravi C. Additional meetings of the Board are held when deemed necessary by the Board. Audit Committee The Company has constituted an Audit Committee in the year 2001.

Nitin Sanghavi Status Chairman Member Member Member No. To review the adequacy of internal audit function. During the year. the statement of uses/application of funds raised through an issue (public issue. Raheja Mr. Shahzaad S. 1956. To review with the management.) the statement of funds utilized for purposes other than those stated in the offer document or prospectus and making appropriate recommendations to the Board to take up steps in this matter. about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. Discussion with statutory auditors before the audit commences. To review with the management. b) Changes. 29th October 2009. 11. preferential issue. Shopper's Stop Ltd. including the structure of the internal audit department. To review with the management. The Composition of the Committee and the attendance of the members at the meetings held are as follows: Name of Member Mr. payment of commission and sitting fees to Non Executive Directors and formulation and implementation of various Employee Stock Option Plans (ESOP) Schemes in the Company. 2009. etc. Ravi C. 2010. Dalal Prof. 9. Discussion with internal auditors any significant findings and follow up there on. 12. rights issue. f) Disclosure of related party transactions. The scope of the activities of the Compensation/ Remuneration Committee is to recommend the remuneration payable to the Executive Directors of the Company. Mirchandani Mr. with particular reference to: a) Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of Section 217 of the Companies Act. e) Compliance with listing and other legal requirements relating to financial statements. the Committee met five times i. Compensation/Remuneration Committee The Company has constituted Compensation/Remuneration Committee in the year 2001. reporting structure coverage and frequency of internal audit. d) Significant adjustments made in the financial statements arising out of audit findings. performance of statutory and internal auditors and adequacy of the internal control systems. 8. on 29th April. 2010 and 24th March. the annual financial statements before submission to the board for approval. if any. with the management. c) Major accounting entries involving estimates based on the exercise of judgement by management. 6. To review the functioning of the Whistle Blower mechanism. in accounting policies and practices and reasons for the same.Corporate Governance Report 3. 29th July. the quarterly financial statements before submission to the Board for approval. of meetings attended 5 4 3 4 Annual Report 2009-10 | 56 . staffing of the department. 2009. 29th January. 7. 5. 4. Gulu L. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. 10. Reviewing. g) Qualifications in the draft audit report. Carrying out any other function as may be added to the terms of reference of the Audit Committee.e.

000 300. President & CEO & Executive Director. S Nagesh * Mr. then Managing Director for the period from April 1.000 * Mr.000 200.) 0. B. The Central Government has approved payments aggregating to Rs.88 39.83 Contribution to Provident Fund (Rs.000 200. Details of compensation paid/payable to Non-Executive Directors during the year are as under: Name of Directors Mr. macro economic review on remuneration packages of heads of other organisations and is decided by the Board of Directors. allowances and profit linked reward scheme to its Executive Directors.000 200. 244. Mirchandani Mr.00.S.) 147.000 80.000 100. Shopper's Stop Ltd.000/.06 lacs will be shortly recovered from the directors.72 Mr. The Company pays remuneration by way of salary. Annual increments are decided by the Compensation / Remuneration Committee within the salary approved by members and are normally effective from April 1. for the financial year 2009-10 is as under: (Rs.) 2.000 Sitting Fees (Rs. Chandru L. The Company pays sitting fees of Rs.000 20. 20.45 Total (Rs. 2009 and Mr. responsibilities shouldered.000 80. B.) 80. 2009 to August 17. Deepak Ghaisas Mr.01 279.000 3.31 5. The members of the Company at the Ninth Annual General Meeting approved the payment and distribution of sum not exceeding 1% of the net profits of the Company calculated in accordance with the provisions of sections 198.80.000 100. Nitin Sanghavi Mr. read with schedule XIII of the Act for the financial years 2007-2008 and 2008-2009.00.f.000 200. Annual Report 2009-10 | 57 . 311. Details of remuneration paid/payable to Mr.00. S.000 100. Raheja Mr.000 20.Corporate Governance Report Remuneration Policy 1. B.e. performance/ track record. 2. Neel C.to its Non-Executive Directors for attending each Board of Directors meeting. Nirvik Singh Total Commission (Rs.000 Total (Rs. Nagesh Mr.00. 2009. Raheja Mr. in lacs) Name of Directors Salary and Bonus (Rs. Gulu L. 1956.000 2. 2010 for the excess remuneration paid to the directors.000 3.44 Perquisites (Rs. perquisites.) 150.) 80.000 100.) 0 0 0 0 200. 3. Govind Shrikhande The Company had made applications to the Central Government for payment of remuneration to its executive directors in excess of the limits laid down in sections 198 and 309 of the Companies Act. The remuneration of the Executive Directors is recommended by the Compensation/ Remuneration Committee based on criteria such as industry benchmarks.000 100. Dalal Prof. 1956 by way of commission to Non-Executive Directors.000 80.000 10. Shahzaad S. Nagesh was elevated as a Vice Chairman of Company w.40. Raheja Mr. S. Ravi C.000 40. The excess payment aggregating to Rs. the Company’s performance vis-a-vis the industry.000 2. Nagesh. annually.96 lacs on 15th April. 18th August.20 324. Govind Shrikhande. B. 349 and 350 of the Companies Act.000 17.000 700.

270 1.f.04.05 29.02.04. B. 2009. Details of grant of stock options to and exercise of stock options by Mr. the Committee met on 29th July.) 150 240 384 110 181 248 429 110 Vesting period 3 years 39 months 3 years 38 months Details of grant of stock options to and exercise of stock options by Mr.10 Options Granted 9. Nagesh Status Chairman Member Member No. Vice President .591 0 0 Grant price per Fair value on the equity share (Rs.05 29. Neel C.05. President & CEO & Executive Director: Period of contract is 3 Years w.000 Options vested and exercised 22. 29th July.30. The members through Postal Ballot on June 29. of meeting attended 1 1 1 Mr. 2009. President & CEO & Executive Director under the following ESOP Schemes is as under: Scheme ESOP-III ESOP-IV ESOP-V-1 ESOP 2008-1 ESOP 2008-2 Date of Grant 01.560 13.980 3.05 28. S. B. During the year 2009-10. Govind Shrikhande.230 7.980 11. The Composition of the Committee and the attendance of the members at the meeting held is as follows: Name of Member Mr. 2009.04 01.e.05 28.09 24. Annual Report 2009-10 | 58 .353 50. Govind Shrikhande. Vice Chairman under the following ESOP Schemes is as under: Scheme ESOP-III ESOP-IV ESOP-V-1 ESOP 2008-1 Date of Grant 01.000 Options vested and exercised 9. Shareholders’ Investor Grievance and Share Transfer Committee The Company has constituted the Committee in the year 2004. 2009 had approved re-appointment of Mr. During the year.405 0 Grant price per Fair value on the equity share (Rs. severance fees and notice period Mr.12.270 5. Shrikhande for a further period of 3 years effective from July 29.) date of grant (Rs.05. Raheja Mr. Nagesh. The Committee looks into redressal of shareholders’ grievances.12. Raheja Mr.) date of grant (Rs.560 13. There is no separate provision for payment of any severance fees.09 Options Granted 22.03. which was attended and resolved to the satisfaction of the Shareholder.) 150 240 384 110 382 181 248 429 110 382 Vesting period 3 years 39 months 3 years 38 months 3 years Service Contract.230 7. Ravi C. S.Legal & Company Secretary of the Company has been designated as the Compliance Officer. the Company has received one Communication/grievance. No grievances were pending at the year end.000 12. Prashant Mehta. The Committee also oversees the performance of the Registrar and Share Transfer Agents and recommends measures for overall improvement in the quality of investor services.Corporate Governance Report Shopper's Stop Ltd.04 01.306 1.02.

National College & W. The Board of Directors of the Company reviews every quarter the financial statements and minutes of Board Meetings of unlisted subsidiary companies. Revision in the “objects of the issue” and consequent utilization of monies raised by the Company in its Initial Public Offering. 1956 during the year 2009-10. Annual Report 2009-10 | 59 . 2007 3. Employee Stock Option Scheme – ESOPs to employees of Company and Subsidiaries. Postal Ballot As per section 192A of the Companies Act.Corporate Governance Report Subsidiary Companies Shopper's Stop Ltd. 2009. July 29. incorporated in India. Mumbai 400 050. In this regard. No special resolution has been passed. 2009 Approval of members was sought for following Special Resolutions: 1. Science College. D. Modification to earlier ESOP Schemes. 2009 2. D. Science College. of the listed holding company and its subsidiaries in the immediately preceding accounting year. National College & W. 2009. Bandra (West). 2008 • Appointment of Mr. Linking Road. 2. Linking Road. Results of Postal Ballot announced on June 29. Ratification of Right Issue of shares. R. (College Auditorium). R. the Company does not have any material non-listed Indian subsidiary.m.m. Bandra (West).e. A. Mumbai 400 050. D. A. placing inter corporate deposit.e.m. Science College. the following special resolutions were passed by members through postal ballot on June 29. 2009 and December 16. Govind Shrikhande as Whole-time Director for a period of 3 years w. (College Auditorium). A. or give guarantees and/or provide security(s) in specified bodies corporate from time to time under section 372A of the Companies Act. Clause 49 of Corporate Governance defines a ‘material non-listed Indian subsidiary’ as an unlisted subsidiary. whose turnover or net worth (i. 1956. National College & W. • • • 2006-2007 28th July. Making investment. Details of the postal ballot process followed in these regard are as under: 1.00 p. paid up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively. 2007-2008 29th July.f. General Body Meetings Details of Annual General Meetings held during last three years: AGM for Financial Year ended 2008-2009 Date Time Location Special Resolutions passed thereat 29th July. (College Auditorium). R. Linking Road.30 p. Mumbai 400 050.30 p. Bandra (West).

876. B.255 2. Annual Report 2009-10 | 60 .544 28.997 99.5 Resolution No. on such terms and conditions as may be deemed appropriate by the Board at its absolute discretion.223 28. Nagesh.290 2. 2009 up to July 28.874. of Votes in Favour of 28.394 % 99. Envelopes received after this date were not considered for scrutiny.513 28. 2009 appointed Mr.000 warrants. 6. Practising Company Secretary as a Scrutinizer for conducting the voting though Postal Ballot.233 28. To offer. S. the last date for receiving the postal ballot forms from shareholders were considered for scrutiny.003 0.993 99. 2009 Approval of members was sought for following Special Resolutions: 1.371 28.094 Total No. Managing Director of the Company for the financial year 2009-10.488 28. Sundaram. B. 3.6 2. Govind Shrikhande as “Executive Director & CEO” of the Company and Continue to remain appointed and payment of remuneration to Mr. 28. of Votes Against 944 6. by way of preferential issue. in one or more tranches. 2009. All postal ballot forms received upto June 27. of Postal Ballot Forms 246 214 214 237 242 241 No.007 0.875. 2.488 28. 4. Waiver of the requirement of repayment of excess remuneration paid by the Company in case of Mr. The results of the Postal Ballot was announced on June 29. issue and allotment of upto 4.000. issue and allot to the promoters and promoter group. Nagesh.870. V.000 Equity Shares and/or Securities convertible into upto 4.978 99.each at the price determined in accordance with Chapter VII of the SEBI ICDR Regulations.223 28. whether or not such investors are existing members of the Company. The Board of Directors of the Company at its meeting held on April 29.4 Resolution No. Particulars No. 2009.Corporate Governance Report 2.874.1 Resolution No.007 Resolution No.876. Waiver of the requirement of repayment of excess remuneration paid by the Company in case of Mr.000 equity shares of the Company. Executive Director and CEO of the Company for the financial year 2007-08 and 2008-09.876.022 0. 10/. Shopper's Stop Ltd. by way of Qualified Institutional Placement (“QIP”) to Qualified Institutional Buyers (“QIBs”) as defined in the Securities & Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations. Govind Shrikhande.488 28.870.513 28.876. S. in one or more tranches.876.876. 2. of upto 4. 2009 at the Registered Office of the Company.008 0.117 2. of Postal Ballot Forms 30 63 63 39 34 35 No. 3. The details of voting are as follows: In favour Against No. Payment of remuneration to Mr.022 0.290 6. Managing Director of the Company for the financial year 2007-08 and 2008-09. of Shares Voting Pattern and Procedure for Postal Ballot 1. each warrant being convertible into one equity share of Rs.2 Resolution No. Executive Director & Chief Executive Officer of the Company for the period from April 1.992 99.000. Re-appointment of Mr. Govind Shrikhande.488 Results of Postal Ballot announced on December 16.978 99. 2009 (“SEBI ICDR Regulations”).874. To offer.993 % 0.3 Resolution No. 5.000.

To handover ‘Crossword’ business to Crossword Bookstores Limited. 2009 appointed Ms. of Shares % % Resolution No.2 99. Board Disclosures – Risk Management The Company has laid down the requisite procedures to inform the Board Members about the risk assessment and minimization procedures. the last date for receiving the postal ballot forms from shareholders were considered for scrutiny. V Sundaram & Co.. 1992. Annual Report 2009-10 | 61 .011 26. 3. 2.596 No. The results of the Postal Ballot was announced on December 16. 2009. Rashmi Bhide of M/s. 2010. of Votes 340 415 Total No. 2009 at the Registered Office of the Company. 3. of Postal Ballot Forms 16 19 Against No.001 0. Envelopes received after this date were not considered for scrutiny. To delete the existing Article 150 – ‘Common Seal’ of the Articles of Association of the Company and substituting it with a new Article under Section 31 of the Companies Act. Disclosure on materially significant related party transactions There were no materially related party transactions that may have potential conflict with the interest of the Company at large.752.1 Resolution No. the Company has formulated. of Postal Ballot Forms 141 138 No. 1956.752.751. 1956. All postal ballot forms received upto December 15. a wholly owned subsidiary of the Company under Section 293(1)(a) of the Companies Act. Details of non compliance with regard to Capital Market There have been no instances of non-compliances by us and no penalties and/or strictures have been imposed on the Company by Stock Exchanges or SEBI or any statutory authority on any matter related to the capital markets during the last three years. as amended. Making investment in securities by subscription/ purchase or otherwise / loans or advances/ guarantee/ security(ies) etc. 1956. Practising Company Secretaries as a Scrutinizer for conducting the voting though Postal Ballot. through postal ballot in respect of the following: 1. The Board of Directors of the Company at its meeting held on November 14.002 26.751. 2.998 0.Corporate Governance Report Voting Pattern and Procedure for Postal Ballot : 1. upto an extent of Rs. The transactions between the Company and the related parties are disclosed in Notes to the Accounts in the Annual Report. of Votes 26. in Hypercity Retail (India) Ltd.011 The Company proposes to seek approval of members on June 21. Code of conduct for Prevention of Insider Trading Practices In compliance with the SEBI (Prohibition of Insider Trading) Regulations.999 99. 200 Crores under Section 372A of the Companies Act. The details of voting are as follows: In favour Particulars No. Disclosure of Accounting Treatment The financial statements of the Company comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act. Shopper's Stop Ltd. 1956. adopted and implemented “Shopper’s Stop Code of conduct for prevention of Insider Trading” in the shares of the Company.671 26.

00 p. : Within 5 days of declaration.Corporate Governance Report Whistle Blower Policy Shopper's Stop Ltd. (6) Stock Code Bombay Stock Exchange Limited National Stock Exchange of India Ltd. National Stock Exchange of India Ltd. Mumbai 400 051. Mumbai 400 001. (2) Financial Calendar (3) Date of Book Closure (4) Dividend Payment Date (5) Listing on the Stock Exchanges The requisite Listing Fees for the financial year 2010-2011 has been paid to both the above Stock Exchanges where the equity shares of the Company are listed. NSE Auditorium. 2.m. Presentations made to the institutional investors or to the analysts are immediately posted on Company’s website in order to share the information with public at large.com and upto date financial results. Bandra (East). Time & Venue : 29th July. The disclosure would be sent to the Chairman of the Audit Committee/the Ethics Counselor who would investigate and recommend to the management of the Company to take such disciplinary or corrective action as may be deemed fit. • • General Shareholders Information (1) Annual General Meeting: Date. official press releases and the other information about the Company and its businesses are available on the website. Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers. Proceeds from public issues The Company has disclosed the uses and application of funds raised through a public issue to the Audit Committee on a quarterly basis as a part of their quarterly declaration of financial results. Compliance with non mandatory requirements of Clause 49 of the listing agreement The Company has voluntarily complied with the non mandatory requirements relating to Remuneration Committee and whistle blower policy. 2010 at 3. : 1 April to 31 March : 21st July. Mumbai 400 051. Dalal Street. 2010 to 29th July. Means of Communication • The quarterly results are published within 48 hours of the Board Meeting. Bandra (East). the Company does a Conference call with the analysts in order to clarify their doubts and queries. Management Discussion and Analysis Management Discussion and Analysis is given as a separate section in the Annual Report. : 532638 : SHOPERSTOP (Symbol) Annual Report 2009-10 | 62 .shoppersstop. mismanagement or wrongful conduct prevailing in the Company and no personnel has been denied access thereto. 2010 (Both days inclusive). : 1. At the end of each quarter. Economic Times and Maharashtra Times and the same are also posted on the Company’s website immediately. The domain name of the Company’s website is www. Bandra-Kurla Complex. Bandra-Kurla Complex. Exchange Plaza. in prominent daily newspapers viz. The Whistle Blower Policy aims to encourage all employees to inform the Company regarding any kind of misuse of Company property. Ground Floor. : Exchange Plaza.

Oct.143.587 876.138.00 210.00 275.353.123 203.29 11.621 224.50 318.56 16.75 5.05 344.087.575 1.10 14.85 423.80 Low (Rs.70 3.00 401.00 166.95 13.877 919.982.35 123.54 15.45 4.30 15.30 320.310.732.00 4. 8000 Financial Year 2009-10 Shopper’s Stop Sensex Share price performance in comparison on NSE: Month (2009-10) April May June July August September October November December January February March NSE High (Rs.675.25 3.597 1.669.219.30 14.00 355.50 277.05 415.78 15.08 15.295.930.05 320.290.Corporate Governance Report (7) Stock Market Data for the period – 1 April.60 5. No.) 99.99 16.00 110.94 17.342 506.15 148. Dec.790.25 310.177 798.00 5.676.00 173.33 16.00 388.00 340.577.05 146.965.398.943.538.512 355.25 4.50 4.682 2. of Shares transacted 497. 2010 Share price performance in comparison on BSE: Month (2009-10) April May June July August September October November December January February March BSE High (Rs.576.50 Low (Rs.517.85 5.01 Sensex Low 9.918.25 249. Jan.793.15 248.497.600.95 5.60 4.95 188.95 423.530.05 High 11.546.677 1.15 341.00 199.72 15.) 99.034 1.00 126.329.48 17.00 261.935.20 4.743.00 111. Nov.85 4.002.484 516.478.25 17.30 342.938 429.00 212.00 244.00 307.20 15.509.81 16.766.) 149.75 198.95 243.669.75 4.95 4. 2009 to 31 March.17 17.438.181.493.221.915 196.621.40 4.992.651.46 17.35 No.687. Mar.356.45 15.183.00 309.99 14.90 261.511 866.55 Nifty Low 2.573 892.046 Annual Report 2009-10 | 63 .640 1.40 4.357.50 4.52 17.773 Shopper’s Stop Price Movement Chart – BSE 675 17000 575 15500 475 Amount (Rs.) 143.45 Shopper's Stop Ltd.00 325.00 5. Feb.330.972 419.925 430.502 80.45 389. of Shares transacted 339.354 202.492.016.) 14000 Sensex 375 12500 275 11000 175 9500 75 Apr May June July Aug.30 416.70 4.00 310.00 354.75 4.15 High 3.693. Sept.142.805.00 401.684.50 194.

418.873.08 0.782.060 341.98 0.410 513.17 0.07 0.81 7.150 348.00 0.00 100.14 6.995 82 42 33 13 9 18 62 8.823 % to total 68.484.486 2 34.160 221.344 % to total 68.12 0.865.845 4.329.251 138. of Shares Held 23.53 0.02 0.03 0.29 0 0.740 349.11 0.254 96.050 3. Dec.68 6.06.00 As on March 31. 2010 Category Promoters Mutual Funds and UTI Financial Institution Foreign Institutional Investors Corporate Bodies Indian Public & HUF Banks NRI’s & OCB’s Clearing Members (Transit) Trust Total Annual Report 2009-10 | 64 As on March 31.527 2.40 10.00 100. 2010 and 31 March.46 0.964 27.01 0.440 % to total 1.17 0.192.47 7.230 % to total 0.24 0.254 27.15 0.42 97.535.501 97.99 0.696. 2009 Shareholders Number % to total 8.00 No.622 2 34.51 10.094 2.22 0.307 0 10.74 100.27 0. Jan.890 461.080 417.282. of Shares Held 23.250 622.720 1.Corporate Governance Report Shopper’s Stop Price Movement Chart – NSE 660 560 460 Amount (Rs.454.69 0. Financial Year 2009-10 Shopper’s Stop Nifty (8) Distribution of Shareholding as on 31 March 2010 and 31 March 2009: Shareholding of Nominal Value Rupees Upto 5000 5001-10000 10001-20000 20001-30000 30001-40000 40001-50000 50001-100000 100001 and above Total As on March 31. Apr May June July Aug. Feb.75 100.143.16 0.684.658.477.00 % to total Rupees 3.125 2.59 0. Mar.29.40 0.840 589.050 17.) 360 4000 260 160 60 3500 3000 2500 6000 5500 5000 4500 Nifty Shopper's Stop Ltd.15 0. Sept.438 1.914.184 3.80 0.89 7.86 0.13 0.18 0.88 100.98 0. Oct.285 68 45 23 6 11 19 44 8.065 2. 2009: As on March 31.51 0.01 0.921.840 341.13 0.18 0.06 0.790 1.43 97.901 2.110 580.570 526.252. 2010 Shareholders Number % to total 7.22 0.00 .38.00 % to total Rupees 3.52 100.000 8.300 853.00 Shareholding Pattern The categories of shareholdings as on 31 March. Nov. 2009 No.760 645.40 4.

each of the Company.400 049 8.400 058 2.133 equity shares are being held in the physical mode.in Web Address : www. Godrej Eternia. HomeStop. Navi Mumbai . Mumbai . Vitthal Rao Nagar.000 0 0 342. Old Bandra Talkies. 2009.Corporate Governance Report Shareholding of Board of Directors as on 31 March. Plot no.400 705 12.000 warrants to its promoters at a price of Rs. V. JVPD Scheme. Shivaji Nagar. Tel : (022) 4249 7000 E-mail ID : investor@shoppersstop.400 089 3. Govind Shrikhande Mr. Bandra (West). Marg. The request received by the Company/RTA for dematerialisation/rematerialisation are disposed off expeditiously. Inorbit Mall. 9th Floor. Mumbai . S. 1406-A.com Western Region 1. Deepak Ghaisas* Mr. Chembur (W). Mumbai . 17-24. Nirvik Singh (9) Registrar and Transfer Agent : (10) Share Transfer System : Status Promoter Director Promoter Director Promoter Director Director Director Director Director Vice Chairman President & CEO & Executive Director Director Shopper's Stop Ltd. Mumbai . Navi Mumbai . 10/. Inorbit Mall. Nitin Sanghavi Mr. Vashi. Mumbai-Pune Road. B. B-Wing.400 064 7. 1 Church Road. Pune . Krushal Commercial Centre.18/.400 064 11. Nagesh Mr. Naman Plaza. 39/1. B. The ISIN allotted to the equity shares of the Company is INE498B01016. Malad (W). Nirmal Lifestyles. B Wing. who opt for the shares in the physical form. 211-D. 2nd Floor. Andheri (W).500 081. Warrant holders can convert these warrants within the statutory time frame. The Company has allotted 4. Raheja Mr. Road. Hyderabad . Deepak Ghaisas holds 3. Madhapur. 28/A. Kandivali (W). Link Road. 41. Ravi C. As on date.shoppersstop. Mumbai .411 001 10. Chandru L. 2010: Name of Director Mr. of Shares 348.411 005 9. M. Fax : +91-40 2342 0814 The shares of the Company are traded on the Stock Exchanges through the Depository System. Dalal Prof. Suburbia. S. Share certificates duly endorsed are issued to the shareholders. Mumbai . L. Juhu. The trading in Company’s equity shares is compulsorily in dematerialised mode for all investors. Sector No. Inorbit Mall. Road.000 575. The shares of the Company are regularly traded at both the Stock Exchanges where they are listed. Gulu L. Road.400 067 5. 30 A.400 705 (11) Dematerialization of shares and liquidity : : (12) Outstanding GDRs/ADRs / Warrants or any Convertible instruments (13) Address for correspondence : (14) Store Locations : Annual Report 2009-10 | 65 .400 080 6. V. HomeStop. Prashant Mehta Vice President – Legal & Company Secretary Eureka Towers.400 050 4. S.295 0 * Mr. Neel C. Link Road.449 31. Mulund (W). Mumbai . Nucleus Mall. Malad (W). S. Mirchandani Mr. Linking Road.400 064. Mindspace. Mumbai . Tel : +91-40 2342 0818.875 Equity Shares jointly with his wife as second holder. Mumbai . Dynamix Mall. Pune . Plot no.each on 29 December.750 550. Mr. Malad (W). Shahzaad S. Each warrant is convertible into one Equity Share of Rs. which ensure the necessary liquidity to shareholders.000. No. entire share capital of the Company except 1. Raheja Mr. 307. Raheja Mr. Vashi.co. (India).000 0 1. Karvy Computershare Private Limited Plot No. Link Road. G.

Hi Tech City. Garuda Star Mall. 17/2. Chetpet. 1. Paryatan Bhavan. New Delhi . Indirapuram. Magrath Road. The Great India Palace. Southern Region 1. E . Khasra No.201 012 5. Bannerghatta Road.122 002 4. Plot No. 10. 1/1/2. A/3.110 027 8.700 068 Annual Report 2009-10 | 66 . Commerce@Mantri. District Centre. Plot no. Prince Anwar Shah Road.700 020 2. South City Mall. Suncity Triton. Mehrauli-Gurgaon Road. Plot No : 2. Sultan Wing.1. Salt Lake. Malleshwaram. 10/3. Bengaluru . Shipra Suncity.143 010 Eastern Region 1.600 031 5. 2. Inorbit Mall. Beside Eldeco Green Compound.560 025 Northern Region 1.Gautam Budh Nagar. Begumpet. Hudco Palace. City Centre. T.01. Gaurav Towers 2. Bengaluru . Banjara Hills.110 017 6. Plot No. Hyderabad . Khelgaon Marg. Madhapur. Malviya Nagar. Lala Lajpat Rai Sarani (Elgin Road). Opp. Ansal Plaza. 375. Plot No. 2. Noida. Eros Mall. Next to Mantri Greens.700 064 3.302 012 11.500 016 4. Shivaji Palace. New Delhi .500 034 7. Alladin Mansion. Select City Walk. 9 Vaibhav Khand. New Okhla Industrial Development Area.City Mall. Hyderabad .566 076 3.500 081 8. Shipra Mall. Near Istaa Hotel.560 003 6. Harrington Road. Chennai . The Metropolitan Mall. Opp. Andrews Ganj.Corporate Governance Report Shopper's Stop Ltd. Indira Palace. District Centre Saket. No.560 025 2. HomeStop. Lucknow . GVK One Mall. Ghaziabad . Sector 38 . Jhotwara Road. HomeStop.201301 9. G. Kolkata . Road No. Uttar Pradesh . 2. Chomu Circle.A. Plot No.110 049 3. DC . Bengaluru . Haryana . Block . Road. Gomti Nagar. I-Lab. Kolkata .226 010 7. Jaipur .110 017 10. . Sitarampura. Village Bassi. 1-11-251/1. Sector II. District Centre. Kolkata . MGF Metropolitan Saket. District . Bengaluru . Raheja Point No. Saket. Raja Garden. Ashok Nagar.1. Tehsil Sawai. Sampige Road. Before Sampige Theatre. Jaipur . Amritsar . Magrath Road. Hyderabad . Gurgaon. Alpha One Mall. MBM Farm. New Delhi . New Delhi .302 017 2.

(c) the Balance Sheet. the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act. An audit includes examining.728 lakhs. 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. both annexed thereto. Shopper's Stop Ltd. Our responsibility is to express an opinion on these financial statements based on our audit. B. retrospectively from 1 June 2007 – Rs. the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account. we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 1956. We have audited the attached Balance Sheet of Shopper’s Stop Limited (“the Company”) as at 31 March 2010. 117366W) P. 2003 (CARO) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act. 2010 Annual Report 2009-10 | 67 . as well as evaluating the overall financial statement presentation. 40005 Place: Mumbai Date: 28 April. (e) Attention is invited to note no. Our audit report has not been qualified in this regard since the Finance Bill has not yet been passed by Parliament and we are informed that the company is planning to challenge the proposed levy in courts of law. Further to our comments in the Annexure referred to in paragraph 3 above.Auditors' Report To. An audit also includes assessing the accounting principles used and the significant estimates made by the Management. 1. (f) in our opinion and to the best of our information and according to the explanations given to us. of the profit of the Company for the year ended on that date and iii. on a test basis. proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. These financial statements are the responsibility of the Company’s Management. we report as follows: (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. 23 of the Financial Statements regarding non-provision of service tax proposed to be levied by the Finance Bill 2010. Chartered Accountants (Registration No. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 3. 4. the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date. 5. On the basis of written representations received from the Directors as on 31 March 2010 and taken on record by the Board of Directors. The Members of Shopper’s Stop Limited 1. evidence supporting the amounts and the disclosures in the financial statements. For Deloitte Haskins & Sells. of the cash flows of the Company for the year ended on that date. (d) in our opinion. Pardiwalla Partner Membership No. the Balance Sheet. the said accounts give the information required by the Companies Act. in the case of the Cash Flow Statement. (b) in our opinion. As required by the Companies (Auditor’s Report) Order. in the case of the Profit and Loss Account. We believe that our audit provides a reasonable basis for our opinion. none of the Directors is disqualified as on 31 March 2010 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act. ii. 1956. 1956. 2. of the state of affairs of the Company as at 31 March 2010. in the case of the Balance Sheet. We conducted our audit in accordance with auditing standards generally accepted in India.

At the year-end. Shopper's Stop Ltd. The Company has generally been regular in depositing undisputed dues including Provident Fund. There are no overdue amounts of principal or interest. provides for physical verification of all the fixed assets at reasonable intervals. Cess and other material statutory dues in arrears as at 31 March 2010 for a period of more than six months from the date they became payable. The rate of interest and other terms and conditions of such loans are. Having regard to the nature of the Company’s business/activities/result. secured or unsecured. (x). (viii).036. 5. In respect of its inventory: (a) As explained to us. Income-Tax. 5 lakhs in respect of any party. firms or other parties listed in the Register maintained under Section 301 of the Companies Act. In our opinion. According to the information and explanations given to us in respect of statutory dues: i.954.159. (b) In our opinion and according to the information and explanations given to us. Annual Report 2009-10 | 68 . Customs Duty. 2. from companies. In our opinion and according to the information and explanations given to us. (xii). as per renegotiated terms. The company has not taken any loans. (vi). Employees’ State Insurance. no material discrepancies were noticed on such verification. the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification. The receipts of principal amounts and interest have been as per stipulations. the inventories were physically verified during the year by the Management at reasonable intervals.Annexure to the Auditors' Report (Referred to in paragraph 3 of our report of even date) 1. Excise Duty.12 lakhs and the maximum amount involved during the year was Rs. the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business. During the course of our audit. There were no undisputed amounts payable in respect of Income-Tax. In respect of its fixed assets: (a) The Company has maintained proper records showing full particulars. Service Tax. 7. (xiii). ii. (b) Some of the fixed assets were physically verified during the year by the Management in accordance with a programme of verification which. In respect of loans. as at 31 March 2010. Investor Education and Protection Fund. In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act. iii. secured or unsecured. we are informed that the nature of transaction is such that there are no comparative prevailing market prices.65 lakhs. clauses (i-c). (xix) and (xx) of CARO are not applicable. the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business. 1956. 4. Sales Tax. 5.50 lakhs to one party during the year. (xiv). 1956. to the best of our knowledge and belief and according to the information and explanations given to us: (a) The particulars of the contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered. Excise Duty. 8. (b) Where each of such transactions (excluding loans reported under paragraph 4 above) is in excess of Rs. the outstanding balance of such loans aggregated to Rs. in our opinion. firms or other parties covered in the Register maintained under Section 301 of the Companies Act. Wealth Tax. we have not observed any major weakness in such internal control system. 4. 3. Customs Duty. prima facie not prejudicial to the interests of the Company. 6. there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. Cess and other material statutory dues applicable to it with the appropriate authorities. 1956. iv. granted by the Company to companies. 8. Wealth Tax. The company has granted unsecured loans aggregating to Rs. including quantitative details and situation of the fixed assets. (c) In our opinion and according to the information and explanations given to us. in our opinion. ii. According to the information and explanations given to us. according to the information and explanations given to us: i.

Mumbai Amounts (Rs. To the best of our knowledge and belief and according to the information and explanations given to us. Commercial Taxes. B. 2006-07 19. In our opinion and according to the information and explanations given to us. Commercial Tax. is not prejudicial to the interest of the Company. the Company has not defaulted in the repayment of dues to banks. the terms and conditions of the guarantees given by the Company for loans taken by its joint venture companies from banks are not prima facie prejudicial to the interests of the Company.Y. for the purposes for which they were obtained. The price at which these optionally convertible warrants have been issued has been determined as per the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations. 1956. In our opinion 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 year. which in our opinion. In our opinion and according to the information and explanations given to us. 117366W) P. 14.Y. 2006-07 339.Y. Commercial Taxes. 12. According to the information and explanations given to us and on an overall examination of the Balance Sheet.30 The Uttar Pradesh Trade Tax Act. 2006-07 24.Y. the Company has issued optionally convertible warrants to companies covered in the Register maintained under Section 301 of the Companies Act. 10. 13. 2009. in lacs) 27. Details of dues of Income Tax and Sales Tax which have not been deposited as on 31 March 2010 on account of any disputes are given below: Name of the Statute The West Bengal Value Added Tax. Pardiwalla Partner Membership No.79 The Income Tax Act. During the year. the term loans have been applied. Ghaziabad Additional Commissioner (Appeals). 11. iii.01 9.Y. 2005-06 26. we report that funds raised on short-term basis have not been used during the year for long-term investment. 2003 Sales Tax Demand F.32 Rajasthan Value Added Tax. Jaipur Additional Commissioner (Appeals). 1948 Sales Tax Demand F. 40005 Place: Mumbai Date: 28 April. 1961 Income Tax Demand F. Chartered Accountants (Registration No. during the year. 2003 Nature of the dues Sales Tax Demand Period to which the amount relates F. For Deloitte Haskins & Sells. 1948 Sales Tax Demand F. Commercial Tax.40 The Uttar Pradesh Trade Tax Act. 2005-06 Forum where dispute is pending Additional Commissioner. Ghaziabad Commissioner of Income Tax Appeals.Annexure to the Auditors' Report Shopper's Stop Ltd. 2010 Annual Report 2009-10 | 69 . West Bengal Assistant Commissioner.

02 16.345.96 35.767.889.50 25.99 30.966.087.42 23.989.90 303.967. 2010 C.78 The accompanying notes 1 to 36 are an integral part of the financial statements.10 9.744.476.099. 2010 Shopper's Stop Ltd.30 For and on behalf of the Board of Directors 11.00 14.43 24.776.30 APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Accumulated depreciation Net Block Capital work in progress (including Capital advances) INVESTMENTS DEFERRED TAX ASSET CURRENT ASSETS.34 40. Navalkar Customer Care Associate & Group Chief Financial Officer Annual Report 2009-10 | 70 .30 1.23 7.873.491.472.71 19.466. For Deloitte Haskins & Sells Chartered Accountants C.31 45.56 — 14.34 148.794.500.36 26.486.22 3.Legal P.87 1. Shrikhande Customer Care Associate & President & Chief Executive Officer & Executive Director Prashant Mehta Customer Care Associate & Company Secretary & Vice President .70 45.34 5 6 17.954. lacs) Notes Mar-10 Mar-09 SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share capital Optionally Convertible Warrants Reserves and surplus LOAN FUNDS Secured loans Unsecured loans 3 34 4 3.620.765.98 1.60 — 20.756.030.60 2.071.30 8 26(b) 9 10 11 12 13 26.39 27.80 24.85 35.259.996.68 26. (All amounts in Rs.325. Pardiwalla Partner Mumbai. B.483. Raheja Chairman Ravi Raheja Director Govind S.55 — — — 50. LOANS AND ADVANCES Inventories Sundry debtors Cash and bank balances Loans and advances Less: CURRENT LIABILITIES AND PROVISIONS Current Liabilities Provisions Net current assets PROFIT AND LOSS ACCOUNT Balance in Profit and Loss Account Less: General Reserve deducted as per contra 7 45. As per our attached report of even date.572.Balance Sheet as at 31 March. L.641.08 1.030.112.550.21 2.10 1.00 301.56 2.70 8. B.00 19.20 27.03 17.498.886.259.75 17.496.32 1.666. Dated: 28 April.141.95 18.129.867.322.45 455.08 50.090.03 790.10 20.74 29.740.174.822.43 3.

10 1.30 8. B.10 131. For Deloitte Haskins & Sells Chartered Accountants 2(e) 14 20 141.057.70) (63.178.486. 2010 Shopper's Stop Ltd.08 631. (All amounts in Rs.54 134.99 2.700.27) C. Dated: 28 April.023.40 14.543.550.75 13.435.00) 15 16 17 18 19 7 88.10 127.83 140.72 86.158.05 251. 10/.) The accompanying notes 1 to 36 are an integral part of the financial statements.00) 3. Raheja Chairman Ravi Raheja Director Govind S.00 32.244.836.40 (6.35 3.915.31 35 26(a) (187.476.074.685.32 For and on behalf of the Board of Directors (18.759.583.856.895. As per our attached report of even date.27 2.Legal Annual Report 2009-10 | 71 P.07 2.758.Profit and Loss Account for the year ended 31 March.75 6. B.72) 6.313.108.949.17 141.20 80.94 6.20 6.680.40 126.429.80) 4.27) (18.15 523.476.per share) Basic (Rs.437. Shrikhande Customer Care Associate & President & Chief Executive Officer & Executive Director Prashant Mehta Customer Care Associate & Company Secretary & Vice President .70 7.05 (1. 2010 C.10 795.03 1.313. lacs) Notes Mar-10 Mar-09 INCOME Retail Turnover Own merchandise (including concession sales) Consignment merchandise Other Retail operating income Less: Value Added Tax Less: Cost of consignment merchandise Other income EXPENDITURE Cost of goods sold Employee costs Operating and administrative expenses Interest and finance charges Depreciation and Amortisation PROFIT/(LOSS) BEFORE EXCEPTIONAL ITEMS Exceptional Item PROFIT/(LOSS) BEFORE TAX Tax Charge/(Credit) NET PROFIT/(LOSS) AFTER TAX BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR APPROPRIATIONS Transfer to General Reserve Proposed Dividend Corporate Dividend Tax BALANCE CARRIED TO BALANCE SHEET Earnings per share (Equity shares.50 (3.379.070.567.23 8.547.98 5.40 140.30) 2.) Diluted (Rs.55 31.19 30 14.476.90) (6. Pardiwalla Partner Mumbai.102.801.00) — — — (1. Navalkar Customer Care Associate & Group Chief Financial Officer .560. par value of Rs.152.80 2.588.181.93 156.80 (1.30 6. L.371.70 10.25 128.84 9.996.319.

10) 4.672.84 Mar-09 (6.27) 0.567.89) (110.30 2. As per our attached report of even date.483.44) 655.Statement of Cash Flows for the year ended 31 March.10) 1.83 103.313.417.89) 375. Dated: 28 April.21) 1.13 (706.29) 1.50 (310.071.18 1.Legal C.05 280.30 (582.78) 8. For Deloitte Haskins & Sells Chartered Accountants P.55 2.00 (3.80 — (2.96 (491.73 (147.349.10 (9.40 (6.378.54 2.60 3. Navalkar Customer Care Associate & Group Chief Financial Officer Annual Report 2009-10 | 72 .489.33) 662. Pardiwalla Partner Mumbai.70) 6.90 2. L.35) (1.017.97 (2.63 513.37) 582.71 22.272.40) 11.75 19.42 999.82 (1.90) 4.553. 2010 C.500.30) 316.03 3.500. (All amounts in Rs.05 For and on behalf of the Board of Directors Govind S.850.18 553. 2010 Shopper's Stop Ltd.69 (2.208.102.87 1.40 (8.100.35) (830.244.60) 242.222.604.84 (1.954. Raheja Chairman Ravi Raheja Director Mar-10 6.35) (699.29) — (375.51 1.553.87 280.553.10) 10.525.545.40 4.00) (2.05 999.70 1. B.806.45 10.60 5.63) 213.80 — (611.35 — 427. B.04 (7.802.626.560.00 (2.70) 12.03 (2. lacs) Cash flows from operating activities Net profit/(loss) before tax Adjustments for: Depreciation and Amortisation Interest and finance charges Provision for diminution in the value of investments Provision for Advances/Doubtful Debts (Profit)/Loss on sale of fixed assets Amortisation of Stock Compensation Interest income Operating profit before working capital changes (Increase)/Decrease in Inventories Decrease/(Increase) in Sundry Debtors Increase in Loans and Advances (other than lease deposits) Decrease/(Increase) in Lease Deposits Increase in Current Liabilities and Provisions Cash generated from operations Income taxes paid Net cash generated from operating activities Cash flow from investing activities Purchase of fixed assets (including capital work in progress) Sale proceeds of fixed assets Investments made Receipt of interest income Net cash used for investing activities Cash flows from financing activities Proceeds from issue of share capital Securities premium on Issue of Shares Proceeds from issue of Optionally Convertible Warrants Payment of Dividend and Dividend Tax (Payments)/Proceeds of/from term loans to/from Banks Proceeds/(Payments) from/of Cash Credit Facilities from/to banks Proceeds from working capital demand loans from Banks Payments of Unsecured loans to Banks Proceeds/(Payments) from/of Unsecured loan from/to Subsidiary company Payment of interest and finance charges Net cash (used in)/generated from financing activities Net (Decrease)/Increase in cash and cash equivalents Cash and cash equivalents as at beginning of the year Cash and cash equivalents as at the end of the year Note: Cash and Cash Equivalents as per Balance Sheet (see Note 11) Less: Deposit under lien Cash and Cash Equivalents as reported above The accompanying notes 1 to 36 are an integral part of the financial statements.505.21) 303. Shrikhande Customer Care Associate & President & Chief Executive Officer & Executive Director Prashant Mehta Customer Care Associate & Company Secretary & Vice President .10 2.572.03 (8.818.60 (1.272.244.85 178.796.435.560.11 9.569.90) 5.22) 4.47) (870.224.

00 5. less accumulated amortization and impairment losses.00 6. Shopper’s Stop Limited (‘SSL’ or ‘the Company’) was incorporated on 16 June 1997. pro rata for the period of use. 2. the Company operated through 34 such departmental stores (including HomeStop) located in different cities of India. As at 31 March 2010.00 – 20. Cost comprises of all costs incurred to bring the assets to their location and working condition and includes all expenses incurred up to the date of launching new stores to the extent they are attributable to the new store. or at the SLM rates prescribed in Schedule XIV to the Act whichever is higher.00 10. Annual Report 2009-10 | 73 (%) From 1 April 2009 5.33 20.Significant Accounting Policies and Notes forming part of Financial Statements for the year ended 31 March. The company capitalizes software and related implementation costs where it is reasonably estimated that the software has an enduring useful life. at the following annual rates: (%) Up to 31 March 2009 Air conditioning and other equipment Furniture.00 16.82 – 20.33 9. fixtures and other fittings Computers Vehicles Leasehold Improvements Intangible Assets Intangible assets are stated at their cost of acquisition. 2010 1. Actual results could differ from those estimates and differences between actual results and estimates are recognised in the periods in which the results are known/materialize.00 . COMPANY BACKGROUND Shopper's Stop Ltd. The depreciable amount of intangible assets is allocated over the best estimate of its useful life on a straight-line basis. by the straight line method (SLM). Depreciation is provided. An intangible asset is recognized. Software is depreciated over management estimate of its useful life: up to 31 March 2009 – 3 to 5 years. based on management’s estimate of useful lives of the fixed assets.21 – 33.00 – 20.00 33. where it is probable that the future economic benefits attributable to the asset will flow to the enterprise and where its cost can be reliably measured.29 – 20.33 – 20. SIGNIFICANT ACCOUNTING POLICIES a) Basis of Preparation of Financial Statements The financial statements have been prepared under the historical cost convention and in accordance with Generally Accepted Accounting Principles and the provisions of the Companies Act.00 14. b) Use of Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. 1956.50 5. Trademarks and Patents are amortized uniformly over a period of 10 years.00 – 20. The Company is engaged in the business of retailing a variety of household and consumer products and books through departmental stores. from 1 April 2009 – 6 years. c) Fixed Assets and Depreciation Tangible Assets Fixed assets are stated at their original cost of acquisition less accumulated depreciation and impairment losses.

are charged as expense to the profit and loss account in the period in which the service is rendered. e) Revenue Recognition Revenue is recognised when it is earned and no significant uncertainty exists as to its realization or collection. Facility management fees are recognised pro-rata over the period of the contract. f) Inventories Inventories are valued at the lower of cost and net realizable value.e. in the value of investments. d) Investments The company has presently classified all its investments as “Long Term” in accordance with Accounting Standard 13 on “Accounting for Investments”. or where applicable the cash generating unit to which the asset belongs. other than temporary. Merchandise received under consignment and concessionaire arrangements belong to the consignors/concessionaires and are therefore excluded from the Company’s inventories. Employee Benefits under defined benefit plans and other long term employee benefits such as gratuity and compensated absences which fall due for payment after completion of employment or after a period of twelve months from rendering service. Provision is made to recognize a decline. The property in the merchandise of third party concession stores located within the main departmental store of the Company passes to the Company once a customer decides to purchase an item from the concession store. Since. An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at the balance sheet date there are indications of impairment and the carrying amount of the asset. The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the profit and loss account. In respect of gift vouchers and point award schemes operated by the Company. The Company in turn sells the item to the customer and is accordingly included under Retail Sales. however. Cost is determined by the weighted average cost method. when the property in the goods is transferred for a price. The property in the merchandise of third party consignment stock does not pass to the Company. when significant risks and rewards have been transferred and no effective ownership control is retained. Annual Report 2009-10 | 74 .Significant Accounting Policies and Notes forming part of Financial Statements for the year ended 31 March. Employee Benefits such as salaries. Long-term investments are stated at cost. 2010 Impairment of Assets Shopper's Stop Ltd. Value Added Tax and Sales Tax are reduced from Retail Turnover. Retail sales are recognized on delivery of the merchandise to the customer. the sale of such stock forms a part of the activities of the Company’s departmental stores. Sales are net of discounts. exceeds its recoverable amount (i. Revenue from store displays and sponsorships are recognised based on the period for which the products or the sponsors advertisements are promoted/displayed. allowances. the higher of the asset’s net selling price and value in use). non-monetary benefits and employee benefits under defined contribution plans such as provident and other funds. which fall due for payment within a period of twelve months after rendering service. sales are recognised when the gift vouchers or points are redeemed and the merchandise is sold to the customer. Cost of inventories comprises all costs of purchase and other costs incurred in bringing the inventories to their present condition and location. the gross sales values and cost of the merchandise are displayed separately in the profit and loss account. g) Employee Benefits Compensation to employees for services rendered is measured and accounted for in accordance with Accounting Standard 15 on Employee Benefits.

entered into for hedging foreign exchange fluctuation risk in respect of an existing asset/liability. l) Stock Based Compensation The compensation cost of stock options granted to employees is calculated using the intrinsic value of the stock options. Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares Annual Report 2009-10 | 75 . regarded as a tax on distribution of profits and is not considered in determination of the profits for the year. At each balance sheet date the company re-assesses the unrecognized deferred tax asset and to the extent that it has become reasonably or virtually certain (in accordance with Accounting Standard 22) that sufficient future taxable income will be available against which such deferred tax asset can be realized. using the applicable tax rates and tax laws. All gains and losses arising out of fluctuations in exchange rates are accounted for in the Profit and Loss Account. 1961 is in accordance with the Guidance Note on Accounting for Corporate Dividend Tax. The company’s obligations recognized in the balance sheet represent the present value of obligations as reduced by the fair value of plan assets. h) Operating Lease Operating Lease payments are recognized as an expense in the Profit & Loss Account on a straight-line basis or other bases. They are measured using the substantively enacted tax rates and tax regulations. 2010 Shopper's Stop Ltd. Tax on distributed profits payable in accordance with the provisions of section 115 O of the Income Tax Act. are measured by the projected unit credit method. Taxes comprise both current and deferred tax. Actuarial Gains and losses are recognized immediately in the Profit and Loss Account. on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. Premium/Discount on forward exchange contracts are treated as an expense/income over the life of the contract. The compensation expense is amortized uniformly over the vesting period of the option. where applicable.Significant Accounting Policies and Notes forming part of Financial Statements for the year ended 31 March. The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. Current tax is measured at the amount expected to be paid/recovered from the taxation authorities. Monetary items denominated in foreign currencies. as defined in Accounting Standard 16 on Borrowing Costs. k) Income Tax Income taxes are accounted for in accordance with Accounting Standard 22 on Accounting for Taxes on Income. are capitalized as part of the cost of acquisition. representative of the time pattern of the user’s benefit. Other borrowing costs are expensed as incurred. are restated at the prevailing rates of exchange at the Balance Sheet date. m) Earnings Per Share The company reports basic and diluted Earnings Per Share (EPS) in accordance with Accounting Standard 20 on Earnings Per Share. j) Foreign Currency Transactions Transactions in foreign currencies are accounted at the prevailing rates of exchange on the date of transaction. i) Borrowing Costs Borrowing costs attributable to the acquisition or construction of qualifying assets. recognizes the previously unrecognized deferred tax asset. Exchange differences on forward exchange contracts. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realized. are recognized in the Profit and Loss Account in the reporting period in which the exchange rate changes.

Contingent Liabilities and Contingent Assets are disclosed by way of notes to the accounts. except where the results are anti-dilutive. o) Contingent Liabilities Contingent Liabilities as defined in Accounting Standard 29 on Provisions. investing and financing activities of the Company. Provision is made if it becomes probable that an outflow of future economic benefits will be required to settle the obligation. outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares.Significant Accounting Policies and Notes forming part of Financial Statements for the year ended 31 March. n) Cash Flow Statement The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements and presents the cash flows by operating. Disclosure is not made if the possibility of an outflow of future economic benefits is remote. 2010 Shopper's Stop Ltd. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and unencumbered bank balances. Annual Report 2009-10 | 76 .

017.08 Note: Term Loans. at beginning of the year Add: Received during the year General Reserves Balance. both present and future.30 — — 31.14 24.45 304.486. (All amounts in Rs.each fully paid up 10.43 3.325.Notes to Financial Statements for the year ended 31 March. 2010 Shopper's Stop Ltd.30 251.61 301.43 3.27 7. RESERVES AND SURPLUS Securities Premium Account: Balance. Cash Credit Facilities and Working Capital Demand Loans are secured by a first charge on all movable tangible properties and an exclusive lien on lease deposits and on all current assets of the Company.500.000 Equity shares of Rs.00 1.45 2.10 — 2.000. SHARE CAPITAL Authorised: 100.21 301.000.486.964.61 103. SECURED LOANS From Banks Term Loans (Refer note below) Cash Credit Facilities (Refer note below) Working Capital Demand Loans (Refer note below) 9.996.00 3.12 967.each Issued and Subscribed: 34.005. at beginning of the year Add: Transferred from Profit and Loss Account Less : Debit balance in Profit and Loss Account deducted as per contra Balance in Profit and Loss Account Employees' Stock Options Outstanding (Refer note 29(d)) 20.73 20.69 17. 10/.491.76 5.865.60 3.964.99 5.954.491. 6.43 Annual Report 2009-10 | 77 .00 17. UNSECURED LOANS Short term Loan from Banks From Subsidiary Company — 1.60 21.641.10 12.959.88 4.000. lacs) Mar-10 Mar-09 3.21 20.344 (Previous year 34.19 20.914.668.823) Equity shares of Rs.685.954.822.00 2.82 20.15 — 552.500.60 4. 10/.068.00 10.30 — 301.500.

2009 Additions Deductions 31 March.756. 3.78 81.26 6.230.76 196.50 capital account TOTAL 29.123.50 1.88 16.14 9.43 — — 29.92 iii) As a result of a review of the useful lives of fixed assets (Refer note 2 (c)).49 6.550.008.39 27.78 72.38 4.765.794. Consequently.40 1.04 894.85 12.102.72 6.63 3.794.58 12.42 3.608.652.02 10.94 11.65 5.07 7. 31 March.18 973.324. fixtures and other fittings 10.13 1.95 Air conditioning and other equipment 10.298. FIXED ASSETS (All amounts in Rs.60 Capital Work in progress and advances on 2.06 8.31 6.936.79 — 2.50 1.058.57 — 2.099.531. lacs) GROSS BLOCK 1 April.02 7.46 Computers 4.182.42 1.419.738.375.74 272. ii) Additions include the following pre-operative expenditure incurred to date of launching new stores: 31 Mar-10 31 Mar-09 207.117.22 — 310.36 254.533.27 2.992. 2010 ACCUMULATED DEPRECIATION NET BLOCK AND AMORTISATION 1 April.10 40.992.345.31 876.60 Previous year 32.53 575.56 16.32 1.83 — 1.428.849.42 0.81 22.28 — 27.65 227.10 300.81 — 1.77 Grand Total 40.550.21 26.02 — 147.56 18.11 3.62 1.66 39.666.78 Total 37.94 835.87 Software 2.31 259.337.13 2.767.83 INTANGIBLE ASSETS Trademarks and patents 298.203.20 13.71 1.93 1.125.345.56 154.71 27.56 6.46 3. the depreciation charge for the year ended 31 March 2010 is lower by Rs.43 Furniture.14 12.80 8.56 23.90 Total 2.867.102.30 25.634. For the Deductions 31 March.56 524.95 389.28 43.744.20 6.21 1.738.408.97 8.313.21 404.25 0. the unamortized depreciable amounts have been charged over the revised remaining useful life of the assets.683.88 6.02 15.863.75 1.647.181.488.782.129.07 177.526.04 581.795.54 1.012.39 3.481.43 27.674.345.77 1. 2010 Description TANGIBLE ASSETS Leasehold improvements 12.118.68 883.230.80 120.061. .159.7.125. 31 March.847.96 5.42 23.22 lacs.32 722.243.533.14 166. 2009 year 2010 2010 2009 Annual Report 2009-10 | 78 Notes to Financial Statements for the year ended 31 March.28 45.06 2.09 5.23 3.10 Notes: i) Some of the Trademarks and Patents are pending for registration with relevant authorities and formalities (including for removal of objections) are under progress. Total 297.39 Employee Costs Travelling Insurance Interest Consultation and Registration Fees Other Expenses Shopper's Stop Ltd.65 0.190.74 2.716.93 1.322.74 2.216.182.20 623.95 16.54 9.873.20 Vehicles 29.73 163.45 810.

00 2.00) — 2.290) Equity shares of Rs.93 1.498.55) — 2. 10/.000 5.500 Equity shares of Rs.each Fully Paid In Associate Company: Hypercity Retail (India) Limited 1. 10/.each Fully Paid 100. 2010 Shopper's Stop Ltd.Notes to Financial Statements for the year ended 31 March.00) — 5.45 0. INVENTORIES (At lower of cost and Net realisable value) Retail merchandise 5.each Fully paid Aesthetic Realtors Private Limited 66 Equity shares of Rs.56 14.744.each Fully Paid 9.000. 10/.214 (Previous year 71.00 (5.505.70.040.10/.00.00.00 (5.990. (All amounts in Rs.00) — 5. 10/.00 (5.00.each Fully Paid Less: Provision for diminution in value of investment Gateway Multichannel Retail (India) Limited 25.505.967.each Fully Paid Less: Provision for diminution in value of investment Shoppers’ Stop.03 3.00 20.each Fully Paid Less: Provision for diminution in value of investment Crossword Bookstores Limited 95. 10/.989. 10/.00 0. 10/.000 Equity shares of Rs. long term at cost.each Fully Paid Less: Provision for diminution in value of investment Upasna Trading Limited 5.100/.00.10/.each Fully Paid In Joint Venture Companies: Timezone Entertainment Private Limited 80.5% Cumulative Reedemable Preference Shares of Rs.32 14. lacs) Mar-10 Mar-09 8.000 Equity shares of Rs.10 1.460.49 3.93 1.each Fully paid Others: Stargaze Properties Private Limited 1.00) — 2.10/.00 0.000 Equity shares of Rs.55 (2.000.each Fully Paid Nuance Group (India) Private Limited 364. 10/.000 (Previous year 246.00) — 5.00 0.62.500 Equity shares of Rs.000 (Previous year 304.00 20.00 5.00 (5.01 9.89.10 Annual Report 2009-10 | 79 .00 (5.01 11.80.500 Equity shares of Rs.each Fully Paid 399. 7% Cumulative Redeemable Preference Shares of Rs.000 Equity shares of Rs.49 3.00 808.00) — 5.10.each Fully paid Retailers Association of India 10.641. INVESTMENTS (Trade.000) Equity shares of Rs.55 (2.000 Equity shares of Rs.92 717.00 (5. unquoted) In Subsidiary Companies: Shoppers’ Stop Services (India) Limited 50.000).55) — 2. 10/.10 1.Com (India) Limited 50.

483.80 1.87 1.562.85 1.85 19.886. considered good Less: Provision for doubtful debts 81.87 303.68 244.40 699.76 2.70 20.158.547.27 12.70 4.129.432.011.80 17. SUNDRY DEBTORS (unsecured) Debts outstanding for more than 6 months Considered good Considered doubtful Other Debts. LOANS AND ADVANCES (unsecured.689.76 556.90 1.00 583.572.335.68 21.91 46.333.30 46.886.83 21.370.95 19.96 17.233. (All amounts in Rs.06 556.38 1.75 22.483.90 11.83 19.00 10.60 1.090.193.534.137.689.10 118.142.38 125.50 1.99 1.802.80 20.87 Annual Report 2009-10 | 80 .60 566.40 1.70 1.90 2.343.40 1. CASH AND BANK BALANCES Cash on hand (including cheques on hand) Balances with scheduled banks: In Current Accounts In Margin Money accounts (under lien against bank guarantee) 12.75 155.112. considered good unless otherwise stated) Loans (including accrued interest) To subsidiaries To other group companies Due from suppliers Advances recoverable in cash or in kind or for value to be received: Premises and other deposits Service Tax Input Credits available Prepayments Income taxes paid (net of provision for tax) Others Less: Provision Notes: i) Considered Good Considered Doubtful ii) Loans and advances include amount due from directors (Refer note 33(e)(i)) Maximum amount outstanding during the year 10. 2010 Shopper's Stop Ltd.40 1.71 1.025.85 2.008.50 1.370.585.Notes to Financial Statements for the year ended 31 March.68 2.62 1.802.47 2.071.02 12.34 510.09 120.40 1.112. lacs) Mar-10 Mar-09 10.470.96 2.

18 lacs as consideration towards relinquishment of future development rights to open Mothercare Standalone stores. CURRENT LIABILITIES AND PROVISIONS Current liabilities Sundry creditors (see notes below) Total outstanding dues of Micro enterprises and Small enterprises Total Outstanding Dues of creditors other than Micro enterprises and Small enterprises Security deposits Other Liabilities Provisions For Proposed Dividend For Corporate Dividend Tax For Leave Encashment — 26.10 213.680.99 lacs) ii) The Company has not received any intimation from “suppliers” under the Micro Small and Medium Enterprises Development Act.082.23 16. relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.80 14.30 Annual Report 2009-10 | 81 .04 lacs (Previous Year Rs.36 148.49 790.Com (India) Limited Rs.41 115.72 86. 2006 and therefore disclosures.07 lacs (Previous Year Rs.40 57.63 26. 2.84 622.84 420.40 14.60 78.80 — 1.10 634. OTHER RETAIL OPERATING INCOME Facility management fees Income from store displays and Sponsorship Income Direct Marketing Income Relinquishment of development rights (Refer note below) Note: The Company received Rs.472.989.03 523.487.90 lacs)] Miscellaneous income and credits Profit on sale of fixed assets (net) Foreign Exchange Gain (net) 16.00 — — 795.73 lacs) Shoppers’ Stop.43 631.10 80.178.996.498.29 51.34 — — 148.93 607. 15. 2010 Shopper's Stop Ltd. lacs) Mar-10 Mar-09 13.966.32 88.Notes to Financial Statements for the year ended 31 March.759. if any.76 730.18 2. 74.20 27.36 26.10 261.538.21 lacs (Previous year Rs. 660. COST OF GOODS SOLD (Including concession purchases) Opening stock Add: Purchases Less: Closing stock 375.987.756.99 179.190.70 Notes: i) Sundry Creditors include amounts due to wholly owned subsidiaries: Shoppers’ Stop Services (India) Limited Rs.17 456. 65.620.10 89. OTHER INCOME Interest Income [Tax deducted at source Rs. 14.17 582.23 — 25.67 lacs (Previous Year Rs.16 660.30 818. 2.498. 74.42 428. 2.45 14.09 26.05 147. 2.28 lacs) Upasna Trading Limited Rs. (All amounts in Rs. 4.

915.287.219.73 — 753. (All amounts in Rs.493.46 43.069.64 1. OPERATING AND ADMINISTRATIVE EXPENSES Insurance Lease rent and hire charges Business conducting fees Rates and taxes Repairs and maintenance – Buildings – Others Legal and professional fees Housekeeping charges Security charges Computer expenses Conveyance and travelling expenses Electricity charges Advertisement and publicity Sales promotion Charges on credit card transactions Packing materials Loss on Sale of Fixed Assets (net) Provision for Advances/Doubtful Debts Foreign Exchange Loss (net) Service Tax Input credit written off Miscellaneous expenses 19.44 31.872.80 518.30 652.55 57.78 2.90 2.990. Retail Turnover in the Profit and Loss Account indicates the gross volumes of business and operations.37 1.31 889.65 690.30 2.957. lacs) Mar-10 Mar-09 7.90 485.84 305.40 495.766. 21.30 13.190.87 — 199.90 5. EMPLOYEE COSTS Salaries.60 375.61 552.30 822.60 — 20.270. 2010 Shopper's Stop Ltd.70 32.560.46 13.30 2.44 791.92 1.36 986.719.80 755.30 228.85 3.70 73.321. INTEREST AND FINANCE CHARGES Interest On fixed loans from banks On Other Loans Finance Charges 20.77 479.003.00 605.35 1.20 525. allowances and bonus Contribution to Provident and other funds Stock compensation expense Staff welfare expenses 18.60 86.40 1.Notes to Financial Statements for the year ended 31 March.20 178.88 704.80 3.404.70 8.72 — 427.10 396.10 Annual Report 2009-10 | 82 .08 368.63 2.51 60.27 1.19 2.344.700.60 8.758.602.79 723.00 74.474.753.50 1.60 1.40 2.60 715.80 17.10 2.588.244.543.493. CAPITAL COMMITMENTS (Net of Advances) Fixed assets 8.

27 59.20 51.00 22. (a) TAX CHARGE/(CREDIT) The tax expense/(credit) for the year comprises of: Mar-10 Income Tax – Current tax – Deferred tax credit – Short Provision of tax of earlier year – Fringe Benefit Tax (b) DEFERRED TAX ASSET Major components of Deferred Tax Asset are as follows: Depreciation Expenditure allowable on payment basis Provision for doubtful advances Deferred Tax Asset 1.97 (455. (a) the Finance Bill has not yet been enacted and (b) based on legal advice the company is planning to challenge the levy in a court of law.67 The agreements are executed for periods ranging from 33 to 288 months with a non cancellable period at the beginning of the agreement ranging from 33 to 108 months and having a renewable clause. LEASING TRANSACTIONS a) Operating lease rentals charged to revenue: b) Variable Rent charged to revenue: Variable rent for certain stores is payable in accordance with the lease agreement as the higher of (a) fixed minimum guarantee amount and (b) revenue share percentage.49 3.07 7. retrospectively with effect from 1 June 2007. Since.90) 284.42 428. lacs) Mar-10 Mar-09 5.98 Mar-09 — (168.490. (All amounts in Rs.814.60 43.544.72 3.319. 25. SEGMENT REPORTING The company is primarily engaged in the business of retail trade through retail and departmental store facilities.Notes to Financial Statements for the year ended 31 March. 2010 Shopper's Stop Ltd. CONTINGENT LIABILITIES IN RESPECT OF: a) Guarantee given for loan taken by Joint venture companies from banks b) Contingent contractual claims c) Disputed Income tax matters in appeal d) Disputed sales tax matters in appeal e) Disputed Customs Duty 4.543.241.883. 1.611.00 — — — — Annual Report 2009-10 | 83 .00 23. 24.227.00 239.51 1. SERVICE TAX The Finance Bill 2010 proposes to impose a levy of Service Tax on renting of immovable properties given for commercial use.00 236.95 15.63 24.51 7.99 14.01 — 1.60 (63.46 111. which in the context of AS 17 on ‘Segment Reporting’ constitutes a single reporting segment.00) 184.208.090.50) — 104.316.38 Mar-09 10. c) The future minimum rental payments in respect of non cancellable lease for premises are as follows: Not later than one year Later than one year and not later than five years Later than five years Mar-10 10.728 lacs.194.63 24.19 245. no provision for the same has been made in the accounts Rs.27 455.488. 26.73 2.

Notes to Financial Statements for the year ended 31 March, 2010

Shopper's Stop Ltd.
(All amounts in Rs. lacs unless otherwise stated)

27. RELATED PARTY DISCLOSURES Following are the material transactions with related parties:
Nature Subsidiaries Associates Joint Ventures — — — — — — — Key Management Personnel — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Total

Purchase of Assets

Gateway Multi Channel Retail (India) Limited Hypercity Retail (India) Limited
Sale of Assets

20.68 20.68

4.48

25.16

(953.00) Hypercity Retail (India) Limited
Sale of Merchandise — — — — — — — — — — — — — —

4.48 (2.00) 10.58 10.58

(955.00) 10.58

1.29

Nuance Group (India) Private Limited Hypercity Retail (India) Limited
Payment of conducting fees/Lease Rent/ Common Area Maintenance Charges

69.04 69.04

70.33

1.29 (2.00) 3,807.68 1,379.60 0.20 2,090.78 0.88 2.63 333.59 (3,020.10) 109.69
— —

(76.90)
— — — — — — — — — — — — —

(78.90) 3,807.68

Ivory Properties and Hotels Private Limited K. Raheja Private Limited Inorbit Malls (India) Private Limited Avacado Properties and Trading India Private Limited K. Raheja IT Park (Hyderabad) Private Limited Trion Properties Private Limited
Expenses Paid

Upasna Trading Limited Crossword Bookstores Limited Hypercity Retail (India) Limited Others
Interest Received

680.37 586.11 94.26
— —

(3,020.10) 790.06

(1,285.70) Hypercity Retail (India) Limited Timezone Entertainment Private Ltd.
Interest Expenses — — —

104.40 5.29 (656.80) 328.13 328.13

18.36

(1,942.50) 346.49

Crossword Bookstores Limited Ivory Properties and Hotels Private Limited
Service Charges Paid

(215.90) 35.53 35.53

(344.50) 1.85

18.36 (19.60)
— — — — — — — —

(580.00) 37.38

1.85
— — — — —

(147.10) Upasna Trading Limited Shoppers Stop Services (India) Limited 42.55 36.00 6.55 (54.20)

(147.10) 42.55

(54.20)

Annual Report 2009-10 | 84

Notes to Financial Statements for the year ended 31 March, 2010

Shopper's Stop Ltd.
(All amounts in Rs. lacs unless otherwise stated)

Nature

Subsidiaries

Associates

Joint Ventures — — — —

Key Management Personnel — — — — — — — — — — — — —

Total

Deposits Paid

Hypercity Retail (India) Limited Trion Properties Private Limited
Reimbursement of Expenses

Nuance Group (India) Private Limited Hypercity Retail (India) Limited Inorbit Malls (India) Private Limited Trion Properties Private Limited

— — — — — — — — — —

330.22 113.82 216.40 (399.20) 516.05

330.22

19.11 19.11
— — —

(399.20) 535.16

30.62 448.24 37.19 (17.40) 350.08 350.08

(364.50)
— — —

(381.90) 351.38

Expenses Recovered

1.30

Hypercity Retail (India) Limited Gateway Multi Channel Retail (India) Limited

1.30 (25.50)
— — — — —

(664.30) 950.00

(22.10) 1,272.89 1,181.00


— — — — — — — — — — — — — — — — — — — — — — — —

(711.90) 2,222.89

Investments Made

Nuance Group (India) Private Limited Hypercity Retail (India) Limited Preference Shares Timezone Entertainment Private Limited
Deposit Repaid Back

950.00

Gateway Multi Channel Retail (India) Limited K. Raheja Private Limited K. Raheja IT Park (Hyderabad) Private Limited
Loan Given

2.31 2.31
— —

(1,140.00) 17.81

91.89 (535.00)
— — — — —

(1,675.00) 20.12

(64.60) Hypercity Retail (India) Limited Timezone Entertainment Private Limited
Loan Received — —

0.30 17.51 (70.60) 8,954.50 8,954.50

200.00

(135.20) 9,154.50

Crossword Bookstores Limited
Loan Repaid

Crossword Bookstores Limited
Recovery of Loan

(979.70) 2,095.00 2,095.00 (1,645.00) 595.00 595.00 (1,755.00) 187.72

(6,350.00)
— — — — — —

200.00 (350.00)
— — — — — — — — —

(7,679.70) 2,095.00 (1,645.00) 595.00 (1,755.00) 6,142.72
— —

Hypercity Retail (India) Limited Gateway Multi Channel Retail (India) Limited
Advance to Directors Remuneration to Directors

5,955.00 5,955.00

187.72 (61.20)
— — — —

(6,013.20)
— — — —

(1,250.00)
— — — —

244.06 (556.00) 474.92 (113.42)

(7,324.40) 244.06 (556.00) 474.92 (113.42)

Annual Report 2009-10 | 85

Notes to Financial Statements for the year ended 31 March, 2010
Balance outstanding at the year end Payable Shoppers Stop Services (India) Limited Shoppers Stop.Com (India) Limited Upasna Trading Limited Crossword Bookstores Limited Receivables Hypercity Retail (India) Limited K. Raheja Private Limited Ivory Properties and Hotels Private Limited Inorbit Malls (India) Private Limited Gateway Multi Channel Retail (India) Limited K. Raheja IT Park (Hyderabad) Private Limited Timezone Entertainment Private Limited Nuance Group (India) Private Limited Trion Properties Private Limited Key Management Personnel The figure in bracket pertain to previous year. Names of related parties and description of relationship: Subsidiaries

Shopper's Stop Ltd.

2.67 (2.73) 2.04 (2.28) 65.07 (74.99) 1,460.38 (52.20) 4,372.75 (1,250.90) — (0.40) 1,082.62 (1,082.60) 645.86 (583.60) 2,296.07 (2,482.20) — (17.50) 201.94 — 109.56 (6.50) 216.40 — 244.06 (556.00)

Cr. Cr. Cr. Dr.

Dr. Dr. Dr. Dr. Dr. Dr.

Cr.

Dr.

Upasna Trading Limited, Shoppers Stop.Com (India) Limited, Shoppers Stop Services (India) Limited, Crossword Bookstores Limited, Gateway Multi Channel Retail (India) Limited Ivory Properties and Hotels Private Limited, K. Raheja Corp. Private Limited, K. Raheja Private Limited, Inorbit Malls (India) Private Limited, Hypercity Retail (India) Limited, Avacado Properties and Trading India Private Limited, K. Raheja IT Park (Hyderabad) Private Limited, Trion Properties Private Limited, The Resort Nuance Group (India) Private Limited Timezone Entertainment Private Limited Govind Shrikhande B. S. Nagesh

Associates

Joint Ventures Key Management Personnel

Annual Report 2009-10 | 86

Notes to Financial Statements for the year ended 31 March, 2010

Shopper's Stop Ltd.
(All amounts in Rs. lacs)

28. DERIVATIVES a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations. The following are the outstanding Forward Exchange Contracts entered into by the Company: Particulars Number of Contracts Type GBP Equivalent (in lacs) INR Equivalent (in lacs) b) Unhedged Foreign Currency exposure The year end foreign currency exposures that have not been hedged by a derivative instruments or otherwise are given below: Particulars Rs. in lacs Payable for purchase of Merchandise Payable towards Royalty Receivable on account of Royalty 29. ESOP SCHEMES Mar-10 a) Number of Employee Stock Option Outstanding: Outstanding at the beginning of the year Granted during the year Lapsed/Cancelled during the year Exercised during the year Surrendered during the year Outstanding at the end of the year Number of Options 778,934 716,400 44,284 48,521 632,931 769,598 Weighted average exercise price 481.42 185.94 — 206.52 — 198.63 Number of Options 890,555 — 108,128 3,493 — 778,934 Mar-09 Weighted average exercise price 481.42 — — 150.00 — 481.42 244.33 82.24 59.70 31.92 21.67 Mar-10 In Foreign currency GBP 3,60,303 USD 1,82,728 USD 1,32,646 GBP 47,065 GBP 31,960 Rs. in lacs 310.52 5.89 67.25 127.30 54.60 Mar-09 In Foreign currency GBP 4,26,178 USD 11,561 USD 1,32,000 GBP 174,772 GBP 75,000 Mar-10 5 Buy 6.26 451.00 Mar-09 4 Buy 4.92 358.44

Annual Report 2009-10 | 87

17 years Mar-10 i) ii) Expense arising from employee share based payment plans Impact on PAT if fair value method had been used instead of Intrinsic Value Method – Basic – Diluted iv) Closing balance of ESOP — 1.069.) Diluted (Rs. Earning pEr sharE (Eps) is calculatEd as follows: Particulars (a) Profit/(Loss) attributable to equity share holders (Rs. Exercise Price Rs.40 382.875 Mar-09 (6.14 Mar-09 5.2010 200.04.13 111.088.32 (18.2009 516.92% 171.00 53. 2010 Shopper's Stop Ltd.865.05 379.865.05 34.593 Rs.50 110. The compensation cost of stock options granted to employees is calculated using the intrinsic value of the stock options. in lacs) (b) Weighted Number of equity shares outstanding during the year (c) Weighted Number of equity shares outstanding during the year after adjustment for dilution (d) Nominal value per share (Rs.371.) 30.03. the following employee share based payment plans were formulated by the Company. 2009-10 Date of grant Number of option granted Contractual life Vesting Schedule (from the date of grant) First Year Second Year Third Year Method of settlement Estimated Fair Values (Arrived at by applying Black Scholes Option Pricing Model) Rs.78) (19.000 6 years 2008-09 — — — — — — 5. b) During the year. Model inputs (share price at the grant date) Rs.870.400 6 years 2 months 24.30 (528.82 d) Other information regarding employee share-based payment plans is as below: iii) EPS if fair value method have been used instead of Intrinsic Value Method (Rs.40 14.023.496 rs.27) 35.78) 31.7.38% The weighted average contractual life of the options outstanding is 5.32% — — — — — — — — — 30% 30% 40% Equity 30% 30% 40% Equity — — — — — — — — 29.43 20. 10 Mar-10 5. Expected Volatility Risk free rate of return c) 42.00 47.) 14.40) (19. 10 34.) (e) EPS: – – Basic (Rs.Notes to Financial Statements for the year ended 31 March.39 17.593 Annual Report 2009-10 | 88 .53 17.38% .27) (18.80) 34.

income and expenses in Nuance Group (India) Private Limited is based on the audited financials for the year ended 31 December 2009.276.000) Current Assets.82 2.31 561. income and expenses in Timezone Entertainment Private Limited is based on the management certified accounts for the year ended 31 March 2010. assEts 1.816.50 2.42 1.40 4. 5.83 3.142. in jointly controlled entities incorporated in India are as follows: Shopper's Stop Ltd.04 90. EXpEnsEs Operational Expenses Interest Depreciation/Amortisation V.351. as a venturer.26 507.36 416.27 338. Annual Report 2009-10 | 89 .475.57 30. Current Liabilities and Provisions a) Liabilities b) Provisions iii.24 161. liabilities. 3. lacs unless otherwise stated) name principal activities proportion of ownership interest as at 31 March 2010 and 31 March 2009 Nuance Group (India) Private Limited Timezone Entertainment Private Limited Airport retailing Entertainment 50% 45% The Company's share in the assets.52 449. liaBilitiEs 1.516. Loan Funds a) Secured Loan b) Unsecured Loans 2.80 112. 2.30 23.02 2.53 0. contingEnt liaBilitiEs 4.59 394. income and expenses (without elimination of inter company transactions) related to its interest in the joint ventures are: Mar-10 i. liabilities. incoME Revenue iV.30 1.997.81 421.11 2.19 1. 2010 31. note 2: The company’s share in the assets.91 2. liabilities.954.55 — 915. Fixed Assets including Capital Work in Progress (Net) Investments (Rs. (all amounts in rs.77 0.65 1.82 301.749.807. intErEst in Joint VEnturEs: The Company's interests.Notes to Financial Statements for the year ended 31 March.411.428.12 1.939.02 Mar-09 note 1: The company’s share in the assets. Loan and Advances a) Inventories b) Sundry Debtors c) Cash and Bank Balances d) Loans and Advances ii.

58 18. Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.a. The estimates of future salary increases considered in actuarial valuation take account of inflation.60 20.61) (16. seniority. 3. 8.51 — 69.85) 83.67 (109. 4.81 (109. the Company monitors mortality assumptions and uses up-to-date mortality tables. 8.29 lacs to its Gratuity plan for the next year.47) 18. 2010 Shopper's Stop Ltd.61 (20. lacs.43 69.a.87 396. such as supply and demand in the employment market. EMPLOYEE BENEFITS: Post-employment benefits Defined contribution plans Company’s contribution to Provident and other funds Defined benefit scheme-Gratuity a) Liability recognised in Balance Sheet Change in Benefit Obligation Present Value of Obligations As at the beginning of the year Service cost Interest cost Actuarial Loss/(Gain) on obligations Benefits paid/transferred As at the end of the year Less: Fair Value of Plan Assets As at the beginning of the year Expected Return on Plan assets less loss on investments Employers’ Contribution Benefits paid/transferred Actuarial Loss on Plan Assets As at the end of the year Net Liability b) Expense during the year Service Cost Interest Cost Expected Return on Plan assets Actuarial Loss/(Gain) on obligations c) Principal actuarial assumptions Rate of Discounting Rate of Return on Plan Assets Rate of increase in salaries Rate of Attrition 31 March 2010 31 March 2009 368.50% p. 13.a.68) (27.Notes to Financial Statements for the year ended 31 March.26 87.62 7.61) 262.75% p. The base being the LIC 1994-96 ultimate tables. 192. from the LIC for the current and the previous years and hence the disclosures as required by Accounting Standard (AS) 15 on Employee Benefits have not been given.57 (43.51 280. Annual Report 2009-10 | 90 .27 20.00% p.43 192. The Company is currently awaiting the details of the composition of the plan assets.76% p.a. 4. The company expects to contribute Rs. The gratuity benefit scheme of the Company is managed by Life Insurance Corporation of India (LIC). 83.00% p.45) 262.00% p. (All amounts in Rs.00% p.68) (0.a.47 87.68 83.a.27 20.60 (0. promotion and other relevant factors.00% p. In assessing the Company’s Post Retirement Liabilities.43 — 113.64) 280.64) (15.57 (20.a.43 20.00-5.90 280. by category.67 7.61 1.60 113.81) 280.58 18.a. unless otherwise stated) 32.

00 — 6.51 — (49.43 — (0.75 76.96 lacs on 15 April 2010 for the excess remuneration paid to the directors.43 280.65 7.40 252.60 192.89 51. (All amounts in Rs.662.06 17.40 2.57 25. 311.44) (15.00 0.164.00 10.42 19. 1956.22 45.392. (Note no.51 262.60 35.71 474.04 2.40 25.30 18. The excess payment aggregating to Rs.11 4.45) (16.28 27.94 113.06 lacs will be shortly recovered from the directors.332.48 25.24 724. The Central Government has approved payments aggregating to Rs.87 4.60 165. 2010 Other disclosures: Particulars Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Surplus/(Deficit) in the Plan Experience Adjustments arising on Plan Liabilities – Gain Experience Adjustments arising on Plan Assets – Loss 31 March 2010 262.40 400.60 34.18 68.28 426. read with schedule XIII of the Act for the financial years 2007-2008 and 20082009.29 60.55 4.70 28.224.30 98. Fixtures and Electrical Items Purchase of Merchandise b) Expenditure in Foreign Currency (on payment basis): Travelling expenses Subscription and membership Computer consultancy Professional fees Royalty Reimbursement of other expenses Others c) Earnings in Foreign Exchange (On receipt basis): Foreign currency and foreign credit card collection on sale of merchandise Royalty Mar-10 2.15 34. lacs.77 14.27 4.45 7. 31 March 2008 192.633.116.208.15 0.42 d) Payments to Auditors (Excluding service tax): i) Audit fees ii) Other matters iii) Out of pocket expenses e) Payments to Directors: i) Executive Directors: Salary.76 40.30 629.00 7. 244.62 3. allowance and bonus Contribution to Provident and other Funds Perquisites The Company made applications to the Central Government for payment of remuneration to its executive directors in excess of the limits laid down in sections 198 and 309 of the Companies Act. SUPPLEMENTARY STATUTORY DATA a) Value of Imports on CIF Basis: Computer software Computer Hardware Furniture.21 454.70 59.15 2.92 Mar-09 62.45) 31 March 2009 280. 12) Non-executive directors: – Commission – Sitting Fees ii) 10. unless otherwise stated) 33.81) Shopper's Stop Ltd.20 — 420.00 2.42 106.60 Annual Report 2009-10 | 91 .60 — — — The Company adopted revised Accounting Standard 15 on Employee Benefits from the financial year commencing 1 April 2007.Notes to Financial Statements for the year ended 31 March.

16 lacs restricted to Rs.068 Amount 8.190.436.40 2.42 2.00 2.023.553.507 41.255. purchases. Category Apparels Non Apparels Units Nos.998.655.068 Amount 8.434. unless otherwise stated) Mar-10 Mar-09 f) Computation of Net Profit in accordance with Section 309(5) of the Companies Act.27 6. free gifts.75 Sales Quantity 10.24 187. 6.582.70) 6.487. (All amounts in Rs. 1956 (Refer note 2(c)).498.513 80.80 Sales Quantity Amount 10.063 14.82 2.17 19.60 4.32 (Quantity in '000s) Closing stock* Quantity 1.60 19.435.987.28 20.36 54. Based on a legal opinion.45 Purchases Quantity Amount 9.567. sales and closing stock (excluding consignment merchandise) For the year ended 31 March 2010.per books Managerial Remuneration (including commission) Provision for Doubtful Debts/Advances/Investments Less: Depreciation as per section 350* Recovery of Doubtful advances Profit on sale of fixed assets per section 349 Excess of expenditure over income of previous year Net Profit/(Loss) as per Section 349 read with Section 309(5) *The Company depreciates fixed assets based on estimated useful lives that are lower than those implicit in Schedule XIV of the Companies Act.516. 10 lacs.51 (6.172.70 4.204 Amount 8.55) g) Quantitative details of opening stock. lacs.152.60 Purchases Quantity Amount 10. Nos.92 427.91 342.583.34 (Quantity in '000s) Closing stock* Quantity 2.10 *Closing stock is after adjusting samples.Notes to Financial Statements for the year ended 31 March.899 43.17 9.018.732.486. Opening stock Quantity Non Apparels Nos. 65.560.72 100.58 9.995 2.54 (147.770 141. 2010 Shopper's Stop Ltd.102. 2.989.60 113.758 78.870 48.198 2.313. the rates of depreciation used by the Company for the purposes of determination of profits under section 349 for the year are the minimum prescribed by Schedule XIV.013 9.570.377 89.29) 484.03 3. Annual Report 2009-10 | 92 . Opening stock Quantity 1.859 35.50 6.498.50 6.287.388.1956: Profit/(Loss) Before Tax Add: Depreciation as per books of account (Profit)/Loss on sale of Fixed Assets .331 Amount 6.219.70 8.10 For the year ended 31 March 2009 Category Apparels Units Nos.37 — — — (342.93 3.257 61.278.55 6.063 14.219.063 Amount 73.1% of net profits: Rs.10 178.05 4.60 4.10 18.402 14.73 10. damaged goods and shortages at stores.995 2.099.076 128.327 10.278. Commission to Non Executive Directors .658 16.

34. The Company allotted 4. Annual Report 2009-10 | 93 .Notes to Financial Statements for the year ended 31 March. 307.40 lacs in the previous year. 2010 Shopper's Stop Ltd.72 lacs from Gateway and has accordingly disclosed the credit under the “Exceptional item” line. 187. into one Equity share at a price of Rs. 35. Figures of the previous year are regrouped and reclassified wherever necessary to correspond to the figures of the current year.18/. EXCEPTIONAL ITEM The Board of Directors of Gateway Multichannel Retail (India) Limited (Gateway) had in January 2009 decided to discontinue operations and the company had therefore made a provision for its investments and loans and advances aggregating to Rs. Each warrant is convertible at the option of the Promoters.000 warrants to Promoters on 29 December 2009. The impairment charge was disclosed as an “Exceptional item” in the Profit and Loss Account.486.at any time before the expiry of 18 months from the date of allotment. During the year the company has recovered Rs. 2. 36.000.

Raheja Chairman N A N A Ravi Raheja Director Govind S. 2010 Annual Report 2009-10 | 94 . Navalkar Customer Care Associate & Group Chief Financial Officer Mumbai. 4 0 Dividend 1 5 % Total Expenditure 1 3 4 8 0 1 9 4 Profit/Loss After Tax 5 0 2 3 0 5 Reverse & Surplus 2 4 3 2 5 9 9 Unsecured Loanss 1 5 0 0 0 0 Investments 1 1 9 6 7 4 5 Deferred Tax Asset 4 5 5 0 0 V. Thousands): Total Liabilities Total Assets 5 0 0 3 0 3 0 5 0 0 3 0 3 0 Sources of Funds Paid-up Capital 3 4 9 1 4 3 Secured Loans 1 7 6 4 1 0 8 Application of Funds Net Fixed Assets 2 9 8 6 7 3 0 Net Current Assets 7 7 4 0 5 5 Accumulated Losses – – – IV. (ITC Code) N A Product Description Item Code No. Capital raised during the year (Amount in Rs.Balance Sheet Abstract and Company's General Business Profile I. 1 1 . (ITC Code) Product Description Item Code No. Thousands): Turnover (Gross Revenue) 1 4 1 1 8 1 2 5 + – Profit/Loss Before Tax + – + 6 5 6 7 0 3 + (Please tick Appropriate box + for Profit – for Loss) Earnings per Share in Rs. L. (ITC Code) Product Description C. Balance Sheet Date 3 1 0 3 1 0 D a t e Month Y e a r II.1 0 8 7 9 8 State Code 1 1 Shopper's Stop Ltd. Performance of Company (Amount in Rs. Registration Details: Registration No. B. Position of Mobilisation and Deployment of Funds (Amounts in Rs. 1 4 . Generic Names of Three Principal Products/Services of Company (as per Monetary Terms): Item Code No. Shrikhande Customer Care Associate & President & Chief Executive Officer & Executive Director Prashant Mehta Customer Care Associate & Company Secretary & Vice President .Legal C. Dated : 28 April. Thousands): Public Issue – – – Bonus Issue – – – Right Issue – – – Optionally Convertible Warrants 3 0 7 1 8 0 III.

74) — — — — (2.each fully paid up.Com Shopper's Stop Gateway Limited (India) Limited Services (India) Multichannel Retail Limited (India) Limited 5.52 (0.56) Net aggregate amount of the Subsidiary Company’s profits/(losses) not dealt with in the Holding Company’s accounts For the Subsidiary’s aforesaid financial year For the previous financial years — — — — (7. 2010 50. 100% 31st March.each fully paid up.31 (8.06) For the previous financial years (377.35) (3.09 (2. 2010 Upasna Trading Shopper's Stop. of Equity Shares Held Extent of Holding The “Financial Year” of the Subsidiary Company ended on 100% 31st March. 10/each fully paid up.62. 100% 31st March. 10/. Statement pursuant to Section 212(1)(e) of the Companies Act.000 Equity Shares of Rs.each fully paid up. 10/.000 Equity Shares of Rs. Holding Company’s interest: No.50 21.14) 3.166. 10/. 50. 1956 Shopper's Stop Ltd.32) 0.Statement pursuant to Section 212 (1)(e) of the Companies Act.254. 100/.77) (1.15) Annual Report 2009-10 | 95 . 100% 31st March.000 Equity Shares of Rs.500 Equity Shares of Rs.each fully paid up.500 Equity Shares of Rs. 2010 51% 31st March. 1956 relating to Subsidiary Companies (Rs. 2010 Net aggregate amount of the Subsidiary Company’s profits/(losses) dealt with in the Holding Company’s accounts For the Subsidiary’s aforesaid financial year 382. 2010 25. in Lacs) Name of the Subsidiary Companies Crossword Bookstores Limited 95.

00 18.14) INR 30.19 — — (32.00 18.00 102.00 5. Shopper’s Stop Services (India) Limited 500.00 — 360.00 — 6. No.775.00 (1.195.96 — India 5.00 2. Shopper’s Stop.745.Com (India) Limited INR — (32. Upasna Trading Limited INR India India 3.234.042.00 — India Profit / (Loss) Before Taxation Provision for Taxation Profit / Proposed Country (Loss) After Dividend Taxation Annual Report 2009-10 | 96 Sr.195.255.295.00 500.00 5.00 346. Crossword Bookstores Limited 500.96 72.143. Name of Subsidiary Company Reporting Currency 1.897.625.00 340.580.00 — 65.00 — 7.745. Balances) + Loan Funds + Current Liabilities Shopper's Stop Ltd.03 980.00 INR Financial Information of Subsidiary Companies 4.250.00 — 2.00 131.16 980.152.392.14) — India * Total Assets = Fixed Assets + Investments + Deferred Tax Assets + Current Assets ** Total Liabilities = Share Capital + Reserves – Profit & Loss (Dr.632.580. Gateway Multichannel Retail (India) Limited 500.00 (1. .255.(Rs.00 346.00) — 1.00 7.19 360.00 3. in ’000) Share Capital Reserves Total Assets* Total Investments Liabilities** Turnover/ Total Income 59.882.00 43.00) — — INR 195.00 38.16 — 775.

Shopper's Stop Limited Consolidated Financial Statements 2009-10 Annual Report 2009-10 | 97 .

as considered in the Consolidated Financial Statements. Our responsibility is to express an opinion on these financial statements based on our audit. total revenues of Rs.54 lakhs. Our audit report has not been qualified in this regard since the Finance Bill has not yet been enacted. We conducted our audit in accordance with the auditing standards generally accepted in India. 5. We did not audit the financial statements of certain components which have been audited by other auditors whose reports have been furnished to us by the Company’s management and our opinion in so far as it relates to the amounts included in respect of these components is based solely on the reports of the other auditors: a) Subsidiary companies whose financial statements reflect total assets of Rs. The joint venture company’s financial statements reflect the group’s share of total assets of Rs. 3. evidence supporting the amounts and the disclosures in the financial statements. Attention is invited to note no. 593.Auditors' Report To. as well as evaluating the overall financial statement presentation. 731. 3. The Board of Directors of Shopper's Stop Limited 1. We have audited the attached group Consolidated Balance Sheet of Shopper’s Stop Limited (the Company) as at 31 March 2010 and also the group Consolidated Profit and Loss Account and the group Consolidated Cash Flow Statement for the year ended on that date annexed thereto. Shopper's Stop Ltd.48 lakhs for the year ended 31 March 2010. 690. on a test basis.805. An audit includes examining. 358. 2006. We are informed that the company is planning to challenge the proposed levy in a court of law. (reference is invited to note 1(c)). total revenues of Rs. An audit also includes assessing the accounting principles used and significant estimates made by management. Annual Report 2009-10 | 98 . 23 of the Financial Statements regarding non-provision of service tax proposed to be levied by the Finance Bill 2010 retrospectively from 1 June 2007 – Rs. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. Accounting Standard 23 (Accounting for Investment in Associates in Consolidated Financial Statements) and Accounting Standard 27 (Financial Reporting of Interests in Joint Ventures) as notified under the Companies (Accounting Standards) Rules.71 lakhs and total cash flows of Rs.32 lakhs as at 31 March 2010. 1. We did not audit the financial statement in respect of a joint venture company whose financial statements are based on unaudited financial information/estimates and as certified by the management on which we have relied for the purposes of our examination of the consolidated financial statements. 109. Subject to the matter referred to in paragraph 4 above: a) We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 (Consolidated Financial Statements). We believe that our audit provides a reasonable basis for our opinion.52 lakhs for the year ended 31 March 2010. These consolidated financial statements are the responsibility of the Company’s management and have been prepared by the management on the basis of separate financial statements and other financial information relating to the components. 6. 2. b) An associate company in respect of which the group’s share of loss is restricted to the value of its investment. 4.64 lakhs as at 31 March 2010.40 lakhs and total cash flows of Rs.

2010.Auditors' Report Shopper's Stop Ltd. the Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India: i) ii) in the case of the Consolidated Balance Sheet. 117366W) P. in our opinion. b) Based on our audit and on consideration of the separate audit reports on individual financial statements of the Company. its aforesaid subsidiaries. in the case of the Consolidated Profit and Loss Account. of the state of affairs of the group as at 31 March. joint venture and associate entities and unaudited financial information/estimates as certified by the management of a joint venture company and to the best of our information and according to the explanations given to us. 2010 Annual Report 2009-10 | 99 . of the profit of the group for the year ended on that date and iii) in the case of the Consolidated Cash Flow Statement. For Deloitte Haskins & Sells Chartered Accountants (Registration No. Pardiwalla Partner Membership No. 40005 Place : Mumbai Date : 28 April. B. of the cash flows of the group for the year ended on that date.

As per our attached report of even date.167.33 29.523.18 42.878.70 2.60 161.70 7. Dated : 28 April.13 1.242.171.26 40.66 — 50.151.66 84.19 22.30 2. B.01 29.483.68 APPLICATION OF FUNDS FIXED ASSETS Gross Block Less: Accumulated depreciation.808.340.917.071.81 301.491.36 21.73 28.45 799.00 15.743.74 5.781.39 45. amortisation and Impairment Net Block Capital work in progress (including Capital advances) INVESTMENTS GOODWILL ON CONSOLIDATION MINORITY INTEREST DEFERRED TAX ASSET CURRENT ASSETS.39 5 6 19.Consolidated Balance Sheet as at 31 March.13 1.163.206.074.185.900.091.991.28 8 25 (b) 9 10 11 12 13 31.12 2.377.36 1. LOANS AND ADVANCES Inventories Sundry debtors Cash and bank balances Loans and advances Less: CURRENT LIABILITIES AND PROVISIONS Current Liabilities Provisions Net current assets PROFIT AND LOSS ACCOUNT Balance in Profit and Loss Account Less: General Reserve deducted as per contra 7 50. 2010 C.40 15.12 22. lacs) SOURCES OF FUNDS SHAREHOLDERS’ FUNDS Share capital Optionally Convertible Warrants Reserves and surplus LOAN FUNDS Secured loans Unsecured loans Notes 3 33 4 Mar-10 3.123.78 84.117.43 24.15 3.29 22.074.22 922.119.70 2. Shrikhande Customer Care Associate & President & Chief Executive Officer & Executive Director Prashant Mehta Customer Care Associate & Company Secretary & Vice President .643.62 26. (All amounts in Rs.60 — 20.80 2.93 13.86 28.250.44 455.223.72 28.849.557.49 29.039.724.091.996. Navalkar Customer Care Associate & Group Chief Financial Officer Annual Report 2009-10 | 100 .Legal C.591. Raheja Chairman Ravi Raheja Director Govind S. B. 2010 Shopper's Stop Ltd.31 50.810.027.35 2. Pardiwalla Partner Mumbai.12 1.80 21.41 26. For and on behalf of the Board of Directors For Deloitte Haskins & Sells Chartered Accountants P.90 2.68 The accompanying notes 1 to 34 are an integral part of the financial statements.14 28. L.37 Mar-09 3.36 51.041.509.63 3.661.486.365.905.517.861.03 21.70 19.442.556.43 3.178.242.29 2.94 10.51 51.

46 (4.73 9.856.40 129. in lacs) INCOME Retail Turnover Own merchandise (including concession sales) Consignment merchandise Other Retail operating income Less: Value Added Tax Less: Cost of consignment merchandise Revenue from Gaming Business Other income EXPENDITURE Cost of goods sold Employee costs Operating and administrative expenses Interest and finance charges Depreciation.722.932.67 2.451.14 34.00 16 17 18 19 7 90.28 3.80 144.Consolidated Profit & Loss Account for the year ended 31 March. Shrikhande Customer Care Associate & President & Chief Executive Officer & Executive Director Prashant Mehta Customer Care Associate & Company Secretary & Vice President .07 (15.473.220. For and on behalf of the Board of Directors For Deloitte Haskins & Sells Chartered Accountants P.654.843.per share) Basic (Rs.732.) Notes 2(e) 14 20 Mar-10 144.554. B.199.20 251.596.80 7.834.209.29 10.62 143.25) (18.319.23 The accompanying notes 1 to 34 are an integral part of the financial statements.66) 10. Pardiwalla Partner Mumbai.543.215. 2010 C.81) — — — (2.810.06 10.580.29 6.627.858.896.91 81.02 (6.Legal Annual Report 2009-10 | 101 C.09) (4. Raheja Chairman Ravi Raheja Director Govind S.81) 777.69 138.635.074.17) (3.28 5.52 1.07 2.42 Mar-09 130.78 6.810. Amortisation and Impairment PROFIT/(LOSS) BEFORE TAX PROFIT/(LOSS) FROM CONTINUING OPERATIONS BEFORE TAX Tax Charge / (Credit) LOSS FROM DISCONTINUING OPERATIONS BEFORE TAX Tax Charge PROFIT/(LOSS) FROM OPERATING ACTIVITIES AFTER TAX Minority Interest NET PROFIT/(LOSS) FOR THE YEAR BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR APPROPRIATIONS Transfer to General Reserve Proposed Dividend Corporate Dividend Tax BALANCE CARRIED TO BALANCE SHEET Earnings per share (Equity shares.470.174.40) 4.058.68 2.01 (2.62 721.810. (All amounts in Rs.711.588.10 2.10 9.461.429.72 86.80) 3.158.99 32 (84.84 9.83 144.86) (8.15 523. 2010 Shopper's Stop Ltd.) Diluted (Rs.351.742. L.198.317.502.67 160. 10/.923.415. Navalkar Customer Care Associate & Group Chief Financial Officer . par value of Rs.738.07 37.00 (8.09 140.807.80) — 3.231.43 664.25) 15 946.69) (14.03) 1. Dated : 28 April.680.81) (18.27 7.01) 3. As per our attached report of even date.58 145.52) (3.48 130.20 (2.365.85 130.186.83 7.456.72 30 30 5. B.45 (15.74 3.58 642.55 13.

93 (7.90) 580.187. As per our attached report of even date.215.70) 4.90 (9. Pardiwalla Partner Mumbai.346.309.73 (631.505.08 Mar-09 (8.19 2.07 (1. L.831.81) 11.923.20 2.30) 7.10 (10.02) 2.807.24) 9.29 151.500.10) 1.10 827.50 (781.00) 370.20 1.30 (2.18 (480.40) (1.Legal .543. (All amounts in Rs.70 827.62 2.371. Raheja Chairman Ravi Raheja Director C. 2010 Shopper's Stop Ltd.284.87) 2.15) (1.426.954.255.70) 13.08 (1.071.10 725.309.102. Dated : 28 April.680.32) (2.Consolidated Statement of Cash Flows for the year ended 31 March.554.354.00 (3.30 — (370. B.68 8.72 3.69 (2.80 — (611.806. 2010 Annual Report 2009-10 | 102 C.978.76 5. Amortisation and Impairment Interest and finance charges Loss on sale of fixed assets Amortisation of Stock Compensation Provision for Advances/Doubtful Debts Interest income Operating Profit before working capital changes (Increase)/Decrease in Inventories Decrease/(Increase) in Sundry Debtors Increase in Loans and Advances (other than lease deposits) Decrease/(Increase) in Lease Deposits (Decrease)/Increase in Current Liabilities and Provisions Cash generated from operations Income taxes paid Net cash generated from operating activities Cash flow from investing activities Purchase of fixed assets (including capital work in progress) Sale proceeds of fixed assets Investments made Receipt of interest income Net cash used for investing activities Cash flows from financing activities Proceeds from issue of share capital Securities premium on Issue of Shares Proceeds from issue of Optionally Convertible Warrants Payment of Dividend and Dividend Tax (Payments)/Proceeds of/from term loans to/from Banks Proceeds/(Payments) from/of Cash Credit Facilities from/to banks Proceeds from working capital demand loans from Banks Payments of Unsecured loans to Banks (Payments)/Proceeds of/from Unsecured loan to/from Others Payment of interest and finance charges Net cash (used in)/generated from financing activities Net (Decrease)/Increase in cash and cash equivalents Cash and cash equivalents as at beginning of the year Cash and cash equivalents as at the end of the year Note: Cash and Cash Equivalents as per Balance sheet (see note 11) Less: Deposit under lien Cash and Cash Equivalent as reported above Mar-10 5.60 (1.034.697.140.213.60) 0. lacs) Cash flows from operating activities Net profit/(loss) before tax Adjustments for: Depreciation.02) 922.543.28 65.00 (220.80 — (3.94 (55.83 (7.93) 11.706.90 (791.05 — 427.97 1.206. Navalkar Customer Care Associate & Group Chief Financial Officer Govind S.621.48) 256.777.04 725.40 4. Shrikhande Customer Care Associate & President & Chief Executive Officer & Executive Director Prashant Mehta Customer Care Associate & Company Secretary & Vice President .923.50 (6.185.28) (3.90 2.09) 7.545.34) 663. For and on behalf of the Board of Directors For Deloitte Haskins & Sells Chartered Accountants P.83 183. B.034.10) (180.209.10 The accompanying notes 1 to 34 are an integral part of the financial statements.12 197.00) 631.60 3.164.034.80) 2.83 103.80) 8.332.96) 869.503.76) 406.33 (950.69 2.20) (488.09 2.90) 1.

Significant Accounting Policies and Notes forming part of Consolidated Financial Statements for the year ended 31 March, 2010
1. BACKGROUND

Shopper's Stop Ltd.

The Consolidated Financial Statements of the group – the parent company, Shopper’s Stop Limited (‘SSL’ or ‘the Company’) and all its subsidiaries – include financial information, as applicable of its other components viz. joint venture and associate companies. The Company was incorporated on 16 June 1997. The Company is engaged in the business of retailing a variety of household and consumer products and books through departmental stores. The following components are included in the consolidation: (a) The Company has the following subsidiaries incorporated in India: Name of the Company % of shareholding as at 31 March 2010 and 31 March 2009 100% Nature of business

Crossword Book Stores Limited

Engaged in the business of retailing books and other items such as music, toys, stationery through departmental and concessionaire stores, operated by franchisees. Supervises the distribution operations of SSL. Operations suspended. Engaged in the business of retailing of products through catalogue shopping at retail outlets, internet and telephone orders (catalogue retailing operations). Operations discontinued in March 2009. and Logistics

Upasna Trading Limited Shopper’s Stop Services (India) Limited Shopper’s Stop.Com (India) Limited Gateway Multichannel Retail (India) Limited

100% 100% 100% 51%

Provides accounting services to group companies.

(b) The Company has the following Interest in Joint Venture Companies incorporated in India: Name of the Company Nuance Group (India) Private Limited Timezone Entertainment Private Limited* Proportion of ownership Interest as at 31 March 2010 and 31 March 2009 50% 45% Nature of Business Airport retailing Entertainment

* Consolidated based on unaudited financial information/estimates as certified by the management. (c) The Company has the following Investment in an Associate Company Incorporated in India: Name of the Company Hypercity Retail (India) Limited 2. SIGNIFICANT ACCOUNTING POLICIES a) Principles of Consolidation The subsidiaries are consolidated on a line-by-line basis in accordance with Accounting Standard 21 on “Consolidated Financial Statements”. Interest of the minority shareholders in the subsidiaries’ profits or losses and net worth is displayed separately in the consolidated financial statements. Inter-company transactions and balances are eliminated on consolidation. Investments in Joint ventures are accounted for using the proportionate consolidation method in accordance with Accounting Standard 27 on “Financial Reporting of Interests in Joint Ventures”. Unrealised profits and losses resulting from transactions between the Company and the Joint Venture Companies are eliminated to the extent of the Company’s Share in the Joint Ventures.
Annual Report 2009-10 | 103

Proportion of ownership Interest as at 31 March 2010 and 31 March 2009 19%

Nature of Business Retail Business

Significant Accounting Policies and Notes forming part of Consolidated Financial Statements for the year ended 31 March, 2010

Shopper's Stop Ltd.

Investments in Associates are accounted for using the Equity Method in accordance with Accounting Standard 23 on “Accounting for Investments in Associates in Consolidated Financial Statements”. Unrealised profits and losses resulting from transactions between the Company and the Associates are eliminated to the extent of the Company’s interest in the Associate. For the purpose of consolidation, the financial statements of the Subsidiaries, Joint Venture Companies and Associates are drawn up to 31 March 2010 which is the same reporting period of the Company except for the financial statements of Nuance Group (India) Private Limited, a Joint Venture company whose accounts for the year ended 31 December 2009 have been considered for the purpose of consolidation. Adjustments are made for the effect of significant transactions or other events that occurred between 1 January 2010 till 31 March 2010. The excess of the cost of investment in Subsidiary, Joint venture and Associate Companies over the parents’ portion of equity is recognized in the financial statements as goodwill. When the cost to the parent of its investment in Subsidiary, Joint Venture and Associate Companies is less than the parents’ portion of equity, the difference is recognized in the financial statements as capital reserve. b) Uniform Accounting Policies SSL and its Subsidiaries, Associate Companies and Joint Venture Companies, in preparing their standalone annual financial statements, have adopted uniform accounting policies, except in the amortization of Trademarks, Copyrights and Goodwill by Crossword Bookstores Limited. However, the Consolidated Balance Sheet and Profits and Loss Account have been prepared using the same accounting policies as adopted by SSL. c) Use of Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and differences between actual results and estimates are recognised in the periods in which the results are known / materialize. d) Fixed Assets and Depreciation Tangible Assets Fixed assets are stated at their original cost of acquisition less accumulated depreciation and impairment losses. Cost comprises of all cost incurred to bring the assets to their location and working condition and includes all expenses incurred up to the date of launching new stores to the extent they are attributable to the new store. Depreciation is provided, pro rata for the period of use, by the straight line method (SLM), based on management’s estimate of useful lives of the fixed assets, or at the SLM rates prescribed in Schedule XIV to the Act whichever is higher, at the following annual rates: (%) Up to 31 March 2009 Air conditioning and other equipment Furniture, fixtures and other fittings Computers Vehicles Leasehold Improvements Intangible Assets Intangible assets are stated at their cost of acquisition, less accumulated amortization and impairment losses. An intangible asset is recognized, where it is probable that the future economic benefits attributable to the asset will flow to the enterprise and where its cost can be reliably measured. The depreciable amount of intangible assets is allocated over the best estimate of its useful life on a straight-line basis. The company capitalizes software and related implementation costs where it is reasonably estimated that the software has an enduring useful life. Software is depreciated over management’s estimate of its useful life: up to 31 March 2009 – 3 to 5 years, from 1 April 2009 – 6 years. Trademarks and Patents, Copyrights and Goodwill are amortized uniformly over a period of 10 years.
Annual Report 2009-10 | 104

(%) From 1 April 2009 5.00 – 33.00 6.33 – 20.00 16.21 – 33.33 9.50 – 20.00 5.82 – 20.00

5.00 – 33.00 10.00 – 20.00 20.00 – 33.00 20.00 10.00 – 20.00

Significant Accounting Policies and Notes forming part of Consolidated Financial Statements for the year ended 31 March, 2010
Impairment of Assets

Shopper's Stop Ltd.

An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at the balance sheet date there are indications of impairment and the carrying amount of the asset, or where applicable the cash generating unit to which the asset belongs, exceeds its recoverable amount (i.e. the higher of the asset’s net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the profit and loss account. e) Investments Long term investments other than in associates considered for consolidation are carried at cost. Provision is made to recognize a decline, other than temporary, in the value of investments. Investments in associates considered for consolidation are accounted for using the equity method. f) Revenue Recognition Revenue is recognized where it is earned and no significant uncertainty exists as to its realization or collection. Retail sales are recognized on delivery of the merchandise to the customer, when the property in the goods is transferred for a price, when significant risks and rewards have been transferred and no effective ownership control is retained. Sales are net of discounts. Value Added Tax and Sales Tax are reduced from Retail Turnover. The property in the merchandise of third party concession stores located within the main departmental store of the Company passes to the Company once a customer decides to purchase an item from the concession store. The Company in turn sells the item to the customer and is accordingly included under Retail Sales. The property in the merchandise of third party consignment stock does not pass to the Company. Since, however, the sale of such stock forms a part of the activities of the Company’s departmental stores, the gross sales values and cost of the merchandise are displayed separately in the profit and loss account. In respect of gift vouchers and point award schemes operated by the Company, sales are recognised when the gift vouchers or points are redeemed and the merchandise is sold to the customer. Revenue from store displays and sponsorships are recognised based on the period for which the products or the sponsors’ advertisements are promoted / displayed. Facility management fees are recognised pro-rata over the period of the contract. Franchise income is recognized in accordance with the rates specified in the franchise agreements and is based on the sales recorded by the franchisees for the year. g) Inventories Inventories are valued at the lower of cost and net realisable value. Cost of inventories comprises of all costs of purchase and other costs incurred in bringing the inventories to their present condition and location. Cost is determined by the weighted average cost method. Merchandise received under consignment and concessionaire arrangements belong to the consignors / concessionaires and are therefore excluded from the Company’s inventories. h) Employee Benefits Compensation to employees for services rendered is measured and accounted for in accordance with Accounting Standard 15 on Employee Benefits. Employee Benefits such as salaries, allowances, non-monetary benefits and employee benefits under defined contribution plans such as provident and other funds, which fall due for payment within a period of twelve months after rendering service, are charged as expense to the profit and loss account in the period in which the service is rendered. Employee Benefits under defined benefit plans and other long term employee benefits such as gratuity and compensated absences which fall due for payment after completion of employment or after a period of twelve months from rendering service, are measured by the projected unit credit method, on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The company’s obligations recognized in the balance sheet represent the present value of obligations as reduced by the fair value of plan assets, where applicable. Actuarial Gains and losses are recognised immediately in the Profit and Loss Account.
Annual Report 2009-10 | 105

The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realized. All gains and losses arising out of fluctuations in exchange rates are accounted for in the Profit and Loss Account. except where the results are anti-dilutive. They are measured using the substantively enacted tax rates and tax regulations. Tax on distributed profits payable in accordance with the provisions of section 115O of the Income Tax Act. The compensation expense is amortised uniformly over the vesting period of the option. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares. 2010 i) Operating Lease Shopper's Stop Ltd. m) Stock Based Compensation The compensation cost of stock options granted to employees is calculated using the intrinsic value of the stock options. as defined in Accounting Standard 16 on Borrowing Costs. j) Borrowing Costs Borrowing costs attributable to the acquisition or construction of qualifying assets. The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. using the applicable tax rates and tax laws. Other borrowing costs are expensed as incurred. Annual Report 2009-10 | 106 . n) Earnings Per Share The company reports basic and diluted Earnings Per Share (EPS) in accordance with Accounting Standard 20 on Earnings Per Share. l) Income Tax Income taxes are accounted for in accordance with Accounting Standard 22 on Accounting for Taxes on Income. regarded as a tax on distribution of profits and is not considered in determination of the profits for the year. Operating Lease payments are recognized as an expense in the Profit & Loss Account on a straight-line basis or other bases. Exchange differences on forward exchange contracts. Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and unencumbered bank balances. p) Contingent Liabilities Contingent Liabilities as defined in Accounting Standard 29 on Provisions. are recognized in the Profit and Loss Account in the reporting period in which the exchange rate changes. Provision is made if it becomes probable that an outflow of future economic benefits will be required to settle the obligation. Current tax is measured at the amount expected to be paid/recovered from the taxation authorities. At each balance sheet date the company re-assesses the unrecognized deferred tax asset and to the extent that it has become reasonably or virtually certain (in accordance with Accounting Standard 22) that sufficient future taxable income will be available against which such deferred tax asset can be realized. 1961 is in accordance with the Guidance Note on Accounting for Corporate Dividend Tax. recognizes the previously unrecognized deferred tax asset. o) Cash Flow Statement The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard 3 on Cash Flow Statements and presents the cash flows by operating. Contingent Liabilities and Contingent Assets are disclosed by way of notes to the accounts. Taxes comprise both current and deferred tax. Disclosure is not made if the possibility of an outflow of future economic benefits is remote. Premium / Discount on forward exchange contracts are treated as an expense / income over the life of the contract. representative of the time pattern of the user’s benefit. are capitalized as part of the cost of acquisition. investing and financing activities of the Company. Monetary items denominated in foreign currencies. are restated at the prevailing rates of exchange at the Balance Sheet date. k) Foreign Currency Transactions Transactions in foreign currencies are accounted at the prevailing rates of exchange on the date of transaction.Significant Accounting Policies and Notes forming part of Consolidated Financial Statements for the year ended 31 March. entered into for hedging foreign exchange fluctuation risk in respect of an existing asset / liability. Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year.

73 20.822.959. b. lacs) Mar-10 Mar-09 3.each Issued and Subscribed: 3.60 20.30 — 31.60 3.88 4. both present and future and corporate guarantee given by the joint venturers. Term Loans.74 — 2.000. Term Loans in Joint Venture entities are secured by a first charge on all company’s receivables and stock.964.005.27 7. 10/. Cash Credit Facilities and Working Capital Demand Loans are secured by a first charge on all movable tangible properties and an exclusive lien on lease deposits and on all current assets of the Company.60 21. 6.55 21.04 19.206.668.19 2.641.12 967.14 9.428.206.30 — 301.068.61 103. SHARE CAPITAL Authorised: 100.21 301. (All amounts in Rs. 10/.08 2.61 301. UNSECURED LOANS Short term Loan from banks Others 10.79 20.each 4.996. SECURED LOANS From Banks: Term Loans (Refer note (a) below) Cash Credit Facilities (Refer note (a) below) Working Capital Demand Loans (Refer note (a) below) Share in Joint Venture (Refer note (b) below) Notes: a.000.491.48.15 84.82 20.12 20.000.Notes to Consolidated Financial Statements Shopper's Stop Ltd.76 5.14 21.00 17.486.964.491.00 10.19 3.66 467.000 equity shares of Rs.00 3.43 12.250.556.823) equity shares of Rs.486.14.43 304.954.917.276.49.52 5.017.30 251.43 3.10 2.69 17. RESERVES AND SURPLUS Securities Premium Account: Balance at beginning of the year Add: Received during the year General Reserves: Balance at beginning of the year Transferred from Profit and Loss Account Less: Debit balance in Profit and Loss Account deducted as per contra Employee's Stock Options Outstanding (Refer note 31) 5.43 3.19 2.62 Annual Report 2009-10 | 107 .340.500. both present and future.386.65.344 (Previous year 3.

90 37.977.051.963.64 935.13 57.30 TOTAL 31.58 4.24 3.17 38.16 — 1.538.39 81.928.117.190.66 12.30 11.21 581.36 19.36 12.56 Share in Joint Venture 13. NET BLOCK AMORTISATION & IMPAIRMENT As at As at As at As at For the 1 April Deductions 31 March 31 March 31 March year 2009 2010 2010 2009 901. the unamortized depreciable amounts have been charged over the revised remaining useful life of the assets.818.743.13 316.93 3.32 45.63 28.78 39.70 12.244.77 7.44 849. 43.20 10.76 6.737.00 2.05 12.179.012.759.178.027.151.102.680.376.74 2.60 Lacs).125.178.485.20 876.10 154.88 1.252.416.70 37.010.070.33 22.196.93 45.651.61 111.80 1.406.17 32.289.47 3.99 489.77 1.78 72.439.76 166.47 1.49 123.09 7.49 561.07 8.01 29.113.138.15 Notes: 1) Some of the Trademarks and Patents are pending for registration with relevant authorities and certain formalities (including for removal of objections) are under progress.31 1.22 2.322.09 2.87 3.75 16.35 877.998.377.56 — 297.40 288.77 1.31 6.886.93 — 2.652. 2) Additions include the following pre-opeartive expenditure incurred to date of launching new stores: 31 March 2010 207.22 Lacs.157.75 274.408.85 2.42 6.65 547. .926.31 3.72 747.56 31 March 2009 389.324.767.523.60 2. 4) Depreciation.101.088.10 4.574. FIXED ASSETS (All amounts in Rs.782.70 5.26 16.39 1.08 1.80 — 34.40 1.49 19.54 — 6.29 Notes to Consolidated Financial Statements TANGIBLE ASSETS Leasehold improvements Air conditioning and other equipment Furniture.620.541.82 824.876.54 43.953.409.69 13.52 11.42 Annual Report 2009-10 | 108 Description ACCUMULATED DEPRECIATION.31 835.04 2.638. lacs) GROSS BLOCK As at 1 April 2009 Additions As at Deductions 31 March 2010 1.15 606.81 2.47 232.58 380.14 123.851.391.32 43. Consequently.171.11 4.53 1.409.19 1.42 26.75 163. 3) As a result of a review of the useful lives of fixed assets (Refer note 2 (d)).84 3.72 12.52 3. 3. fixtures and other fittings Computers Vehicles Total INTANGIBLE ASSETS Trademarks and patents Software Total Share in JV Grand Total Previous year Capital Work in progress and advances on capital account 2.225.80 2.42 3.14 — 1.13 3.32 4.900.059.719.992.14 2. 704.50 21.837.25 0.63 3.21 165.70 7. the depreciation charge for the year ended 31 March 2010 is lower by Rs.182.78 121.345.086.40 1.526.52 111.523. Amortisation and Impairment for the year includes impairment loss of Rs.113.93 1.04 4.31 1.88 394.25 Lacs (Previous year Rs.129.807.272.14 9.41 26.725.63 208.60 4.900.88 50.61 228.28 8.54 1.94 11.125.95 0.96 2.7.01 5.849.720.66 6.355.41 2.808.25 2.72 Employee Costs Travelling Insurance Interest Consultation Fees Other Expenses Share in Joint Venture Total Shopper's Stop Ltd.54 36.

(All amounts in Rs.990. CASH AND BANK BALANCES Cash on hand (including cheques on hand) Balances with scheduled banks: – In Current accounts – In Deposit accounts – In Margin Money account (under lien against bank guarantee) Share in Joint Venture 20.00 19.99 13.000 (Previous year 3.00 0.157.10 1.154.12 0.29 Annual Report 2009-10 | 109 .02 3.024.22 155.000 equity shares of Rs.09 507.185.13 14.81 1.763.351.10 1.10 1.036.30 2.49 — — 3.00.19 922.167.905.000). 10/.90 1.each Fully paid Aesthetic Realtors Private Limited 66 Equity Shares of Rs.C) 9.32 915. SUNDRY DEBTORS (unsecured) Debts outstanding for more than 6 months – Considered good – Considered doubtful – Other Debts.36 86.37 281.12 117.52 1. unquoted) Stargaze Properties Private Limited 1.00.87 472.90 120.S.01 20.69 13.each Fully Paid Less: Share of Loss of associate Company (restricted to the value of investment) 3.49) — 3.38 1.40 1.04.00 (20.40 1.110. lacs) Mar-10 Mar-09 0.70 1.991.each Fully Paid Others: Investments in Government Securities (N.49) 0. 7% Cumulative Redeemable Preference Shares of Rs.21 46. 10/. considered good Less: Provision for doubtful debts Share in Joint Venture 11.93 449.Notes to Consolidated Financial Statements Shopper's Stop Ltd.989.99 13.849.99.00 8.each Fully paid Retailers Association of India 10.00 22.each Fully Paid In Associate Company: Hypercity Retail (India) Limited (including goodwill of Rs.49 1.498.49 (20.10 1.223. 10/.040. 10/.621. INVESTMENTS (Trade.10 46.80 15.90 1. INVENTORIES (At lower of cost and Net realisable value) Retail merchandise Share in Joint Venture 10.91 2.13 14.500 Equity Shares of Rs.041.26 15.000 equity shares of Rs.49 Lacs) 180. 20.01 0.00 0. Long term at cost.38 421.661. 10/.70 112.02 3.

33 29.60 2.90 259.30 1.54 133.220.60 — — 148.012. LOANS AND ADVANCES (unsecured.77 51.18 234.88 148.865.117.18 22.274.49 29.26 393.70 332.16 660.510.510.87 799. lacs) 12.91 2.714.669.99 26.45 161.590.14 2.514.27 22.321.643.48 625.43 921.93 152.878.10 420.22 664.98 28. (All amounts in Rs.07 212.47 10.457.94 634.233.028.Notes to Consolidated Financial Statements Shopper's Stop Ltd.80 782.91 — 20.861.00 27.53 620.766.796.18 1.36 — — 630.403.346.66 85. CURRENT LIABILITIES AND PROVISIONS Current Liabilities Sundry creditors Security deposits Other Liabilities Share in Joint Venture Provisions For Proposed Dividend For Corporate Dividend Tax For Leave Encashment Share in Joint Venture Mar-10 5.72 86.88 12.79 946.42 428. considered good unless otherwise stated) Loans (including accrued interest) to Group companies Due from suppliers Advances recoverable in cash or in kind or for value to be received: Premises and other deposits Service Tax Input Credits available Prepayments Income taxes paid (net of provision for tax) Others Less: Provision Share in Joint Venture Note: Considered Good Considered Doubtful 13.386.442.80 — 218.12 1.18 25. 15.79 24.14 22.73 22.67 Mar-09 2.58 370.83 20.34 26.27 28.26 22.99 179.26 34.861.84 288.08 511.74 1.48 1.465.45 523.73 20.80 1.62 2. OTHER INCOME Interest income Miscellaneous income and credits Profit on sale of fixed assets (net) Foreign Exchange Gain (net) Share in Joint Venture 631.039.18 — 22.17 485. 660.85 393. OTHER RETAIL OPERATING INCOME Facility management fees Income from store displays and Sponsorship Income Direct Marketing Income Relinquishment of development rights (Refer note below) Income from franchisees Share in Joint Venture Note: The Company received Rs.861.317.18 10.38 1.423.336.442.39 1.14 2.10 792.20 1.026.91 790.117.72 20.78 2.654.48 Annual Report 2009-10 | 110 .18 lacs as consideration towards relinquishment of future development rights to open Mothercare Standalone Stores.93 607.62 8.30 1.62 14.913.346.262.

614.681.985.71 — 777.72 — 427.705.219.40 515.52 13.68 1.858.646.438.61 3.220.40 3.39 34.473.37 1.543.98 90.31 889.70 76.494.31 35.206.845.04 2.10 88.989.20 183.990.50 14.509.05 401.40 1.27 2.302.79 2. EMPLOYEE COSTS Salaries.72 986.498.40 1.90 485.06 616.67 1.502.34 14.Notes to Consolidated Financial Statements Shopper's Stop Ltd.68 1. allowance and bonus Contribution to Provident and other funds Stock compensation expense Staff welfare expenses Share in Joint Venture 18.404.89 791.30 289.40 9.67 2. COST OF GOODS SOLD (Including concession purchases) Opening stock Add: Purchases Less: Closing stock Share in Joint Venture 17. lacs) 16.63 81.35 37.632.81 9.349.10 80.28 Mar-09 18.770.706.872.42 9.193.493.10 479.25 — 199.81 13.200.07 518.10 8.20 464.43 2.33 1.71 3.87 2.13 785.10 792.46 47.72 66.374. OPERATING AND ADMINISTRATIVE EXPENSES Insurance Lease rent and hire Charges Business conducting fees Rates and taxes Repairs and maintenance – Buildings – Others Legal and professional fees Housekeeping charges Security charges Computer expenses Conveyance and travelling expenses Clearing & Forwarding charges Electricity charges Advertisement and publicity Sales promotion Charges on credit card transactions Packing materials Loss on Sale of Fixed Assets (net) Provision for Advances/Doubtful Debts Service Tax Input credit written off Miscellaneous expenses Share in Joint Venture 19.14 323.33 427.92 705.28 2.769.270.19 715.04 291.83 Annual Report 2009-10 | 111 .14 57.65 425.41 336.019.73 753.20 393.73 8.388.30 833.19 1.48 370.60 8.07 1. INTEREST AND FINANCE CHARGES Interest – On fixed loans from banks – On Other Loans Finance charges Share in Joint Venture Mar-10 14.12 1.198.132.12 1.65 646.865.61 557.498.923.076.79 723.474.475.92 591.83 32.543.70 91. (All amounts in Rs.351.75 5.25 2.32 88.39 95.07 81.

20 51.01 (10. 1.00 239.247.344. retrospectively with effect from 1 June 2007.37 16. LEASING TRANSACTIONS a) Operating lease rentals charged to revenue: b) Variable Rent charged to revenue: Variable rent for certain stores is payable in accordance with the lease agreement as the higher of (a) fixed minimum guarantee amount and (b) revenue share percentage.719.46 111.51 7. c) The future minimum rental payments in respect of non cancellable lease for premises are as follows: Not later than one year Later than one year and not later than five years Later than five years Mar-10 10.00 1.54 lacs.Rs.82 14.10 5.00 236.60 460.27 59.611. (a) TAX CHARGE/(CREDIT) The tax expense/(credit) for the year comprises of: Income Tax – Current tax – Deferred tax credit – Short Provision of tax of earlier year – Fringe benefits Tax (b) DEFERRED TAX ASSET Major components of Deferred Tax Asset are as follows: Depreciation Expenditure allowable on payment basis Provision for doubtful advances Deferred Tax Asset 284.93) — 121.70 The agreements are executed for periods ranging from 33 to 288 months with a non cancellable period at the beginning of the agreement ranging from 33 to 108 months and having a renewable clause.710.705.925.635.915.40 Mar-10 1. Since.090.27 3.05 24.319.27 1. 21.88 3.07 7.76 4. CONTINGENT LIABILITIES IN RESPECT OF a) b) c) d) e) Guarantee for loans taken from bank Contingent contractual claims Disputed Income tax matters in appeal Disputed sales tax matters in appeal Disputed Custom Duty 4.60 2. CAPITAL COMMITMENT (NET OF ADVANCES) Fixed assets 22.00 23.805.40 — — 7.00 7.417.00 Mar-10 2.42 590. Retail Turnover in the Profit and Loss Account indicates the gross volumes of business and operations.06) Annual Report 2009-10 | 112 .316.310.63 Shopper's Stop Ltd.61 Mar-09 12. (a) the Finance Bill has not yet been enacted and (b) based on legal advice the company is planning to challenge the levy in a court of law no provision for the same has been made in the accounts .615. 24.60) 164. 25.490.Notes to Consolidated Financial Statements 20. SERVICE TAX The Finance Bill 2010 proposes to impose a levy of Service Tax on renting of immovable properties given for commercial use.19 245.45 24.17 (447.86 (175. Mar-09 2.27 455.45 Mar-09 44.

18) (0.75 (20. (All amounts in Rs. 8.76% 193.a.00% p.25% p.00 . 3.60 Fair Value of the Plan Assets 263.60 (0.21 192.59 20.a.55 87.76) (27. The gratuity benefit scheme of the Company is managed by Life Insurance Corporation of India (LIC). Other disclosures: Particulars 31 March 2010 31 March 2009 31 March 2008 Present Value of the Defined Benefit Obligation 268.76) — Experience Adjustments arising on Plan Liabilities – Gain (49.45 3.83) — The Company adopted revised Accounting Standard 15 on Employee Benefits from the financial year commencing 1 April 2007.00% p.48 404.67 (109.44) — Experience Adjustments arising on Plan Assets – Loss (16.a.76 116.74 18.74 18.13. unless otherwise stated) 26.84 21.29 Lacs to its Gratuity plan for the next year.5. The Company is currently awaiting the details of the composition of the plan assets. In assessing the Company’s Post Retirement Liabilities. promotion and other relevant factors.85) (109.11 7.00% The company expects to contribute Rs.00) (3.21 73.Notes to Consolidated Financial Statements Shopper's Stop Ltd.a.00 .81 285.75 (43.a.50% .80 285. Annual Report 2009-10 | 113 .70) 285. 8.7.45) (15.21 193.81 281.25) 263. The base being the LIC 1994-96 ultimate tables.45) (0. 83. such as supply and demand in the employment market.00 .00 73.70) (15.81 281. EMPLOYEE BENEFITS Post-employment benefits Defined contribution plans Company’s contribution to Provident Fund Defined benefit scheme-Gratuity a) Liability recognised in Balance Sheet Change in Benefit Obligation Present Value of Obligations As at the beginning of the year Service cost Interest cost Actuarial Gain on obligations Benefits paid/transferred As at the end of the year Less: Fair value of Plan Assets As at the beginning of the year Expected Return on Plan assets less loss on investments Employers’ Contribution Benefits paid/transferred Actuarial Loss on Plan Assets As at the end of the year Net Liability b) Expense during the year Service Cost Interest Cost Expected Return on Plan assets Actuarial Loss/(Gain) on obligations c) Principal actuarial assumptions Rate of Discounting Rate of Return on Plan Assets Rate of increase in salaries Rate of Attrition Mar-10 Mar-09 385.00 . from the LIC for the current and the previous years and hence the disclosures as required by Accounting Standard (AS) 15 on Employee Benefits have not been given.22 (20. 2.55) 14.00% p. seniority. by category.00% p.5.8. lacs. Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.81 5.80) 281. 4. the Company monitors mortality assumptions and uses up-to-date mortality tables.45 20. 4.22 (1.60 Surplus/(Deficit) in the Plan (5.60 89.a.28) 87.75% p.60 116.5.61) (16.45 192.84 21.00 .76 83.61) 268. The estimates of future salary increases considered in actuarial valuation take account of inflation.45 7.

75 — (359.59 (3.67 — — — (950.810.Notes to Consolidated Financial Statements 27.29 (656.10) — — (13.20) Annual Report 2009-10 | 114 .379.056.10 (19.81 — — (78.28 — — — — — — — (3. Raheja Private Limited Avacado Properties and Trading India Private Limited K.78 2. (All amounts in Rs.30) — — (1.48 — (242.00) 3.60 0.63 333.90) 3.10 — 10.85 — — (378.22 113. RELATED PARTY DISCLOSURES Following are the material transaction with related parties: Nature Associates Shopper's Stop Ltd.52 — (76.10) — — (13.60 2.48 (242.69 — — (656.00) 1.30) — — (1.60) 1.29 (2.22 — — (399.82 216.28 1.75 578.60) — — — — — — — 4.70) 109.67 209. unless otherwise stated) Joint Ventures Key Management Personnel — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Total Purchase of Assets Hypercity Retail (India) Limited Sale of Assets Hypercity Retail (India) Limited Purchase of Merchandise Hypercity Retail (India) Limited Return of Merchandise Hypercity Retail (India) Limited Sale of Merchandise Nuance Group (India) Private Limited Hypercity Retail (India) Limited Payment of conducting fees / Lease Rent / Common Area Maintenance Charges Ivory Properties and Hotels Private Limited Inorbit Malls (India) Private Limited Hypercity Retail (India) Limited K.85 1.10) 209.020.40 (399. lacs.00) 330.10) 209.20) — — — — — — — — — — — — 34.52 34.056.090.20 0.80) 578.29 — 1.88 2.90) — — — — — — — — — — — — — — — — 10.10) 1.80) 588.85 — (207.48 4.70) 109.69 104.85 (207. Raheja IT Park (Hyderabad) Private Limited Trion Properties Private Limited Sale of Scrap Hypercity Retail (India) Limited Expenses Paid Hypercity Retail (India) Limited Others Interest Received Hypercity Retail (India) Limited Timezone Entertainment Private Limited Interest Expenses Ivory Properties and Hotels Private Limited Deposits Paid Hypercity Retail (India) Limited Trion Properties Private Limited 4.020.40 5.10) 35.67 — — — — (950.810.00) 330.

65 — — 110.50) 950.955.00 — — (7.00) — — — — — — — (86.589.64 (709.263.572.42) Total Deposit Received Back Avacado Properties and Trading India Private Limited Hypercity Retail (India) Limited Reimbursement of Expenses Nuance Group (India) Private Limited Inorbit Malls (India) Private Limited Hypercity Retail (India) Limited Trion Properties Private Limited The Nuance Group AG Expenses Recovered Nuance Group (India) Private Limited Hypercity Retail (India) Limited Investments Made Hypercity Retail (India) Limited Deposit Repaid Back K.00 — (6.00 (760.00) 17.955.11 — — — — (364.48 — (882.00 (760.00) 474.50) 130.00 5.00) 474.699.11 19.49) 310.00) 17.955.140.92 (113.00 (1.00 — 110.50 — (7.08 — — (691.65 310.50) 130.10) — — — — — — 110.40) 350.51 17.00) 5.00 — (1.08 (669.50) — — — (22.222.62 37. Raheja IT Park (Hyderabad) Private Limited Loan Given Hypercity Retail (India) Limited Timezone Entertainment Private Limited Loan Taken Hypercity Retail (India) Limited Loan Repaid Hypercity Retail (India) Limited Issue of Shares The Nuance Group AG Recovery of Loan Hypercity Retail (India) Limited Nuance Group (India) Private Limited Advance to Directors Remuneration — — — (86.48 (882.00 (350.42) Annual Report 2009-10 | 115 .80 — — — — — (1.50 — — (7.00 110.92 (113.40) 950.Notes to Consolidated Financial Statements Nature Associates Joint Ventures Shopper's Stop Ltd.48 130.24 30.06 (556.50) 622.589.20) — — — — — — — — 19.90) 350.69 — 448.51 — — 9.250.50 9. Key Management Personnel — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 244.00) — — — — — — — — — — — — (1.65 — 110.06 (556.50) 603.19 87.49) 310.51 — 9.00) 5.140.20) 244.013.073.00 950.08 — 350.

Nagesh Annual Report 2009-10 | 116 .60) Dr. Inorbit Malls (India) Private Limited. 54.Notes to Consolidated Financial Statements Balance outstanding at the year end Receivables Hypercity Retail (India) Limited Ivory Properties and Hotels Private Limited Inorbit Malls (India) Private Limited Timezone Entertainment Private Limited Nuance Group (India) Private Limited Trion Properties Private Limited Others Key Management Personnel Payable The Nuance Group AG The figure in bracket pertain to previous year Names of related parties and description of relationship: Associates Shopper's Stop Ltd. Private Limited. : Ivory Properties and Hotels Private Limited.78 — Dr. 111. Trion Properties Private Limited.082.07 — Dr. 645.20) Cr. S.082. 3. K.13 (742. Raheja Corp. Raheja Private Limited.082. — (17. Raheja IT Park (Hyderabad) Private Limited. 1.60) Dr. K.06 (556.40 — Dr. 216.00) Dr. 244.24 (720. The Resort.00) 812.90) Dr. The Nuance Group AG : Nuance Group (India) Private Limited Timezone Entertainment Private Limited Joint Ventures Key Management Personnel : Govind Shrikhande B. Hypercity Retail (India) Limited. Avacado Properties and Trading India Private Limited.86 (583.62 (1. K.

40 55.063.29 11.58 (3.45) 3.08) (65.80 477.685.478.50 79.94) (2.92 358.01) 76.24) (2.20) (3.62 79.90 55.058.60) (2.69 7.74 (2.06 51.896.415.451.09 642.50 77.770.19 796.29 169.30) (40.20 1.62 50.23 7.622.43 642.31 214.57) 7.85 130.40 7.58 188.25 51.69 7.635.45) — (1.40 7. lacs) Particulars REVENUE External Sales Total Revenue RESULTS Segment Operating Results Interest Expenses Provision for Taxation Net Profit/(Loss) OTHER INFORMATION Segment Assets Total Assets Segment Liabilities Total Liabilities Segment Depreciation Total Depreciation Total Cost incurred during the year to acquire Segment assets (Tangible and Intangible fixed assets) II) 3.058.680.Notes to Consolidated Financial Statements 28.289.30 77.06 (6.057.83) 10.44 Annual Report 2009-10 | 117 .26 451 31 March 2009 4 Buy 4.807. SEGMENT REPORTING I) Information about primary business segments: Shopper's Stop Ltd.635.50 54.373.766.540.391.566.861.685.62 721.25 3.42 7.597.80 144.543.85 130.923.511.54 10.50 712.51 Mar-10 Retail Others Operations Total Retail Operations 129.896.811.12 1.20) (2.09 3. (All amounts in Rs.28) (1.09 The company operates in a single geographical environment.62 721.58 129.174.23) 12. DERIVATIVES a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations.631.807.174.415.177.618.566.597.80 144.588.31 (94.42 144. The following are the outstanding Forward Exchange Contracts entered into by the Company: Particulars Number of Contracts Type GBP Equivalent (lacs) INR Equivalent (lacs) 31 March 2010 5 Buy 6.43 (77.918.365.680. 29.01 78.631.883.26 Mar-09 Others Total 144.

456.008.30 54.00 7.00 873.635.97) 2.285.065.470.69) 0.07 7.81 — 2.98 129. 1371.92 21. SSL has committed to provide the necessary level of support.72 lacs).74 3.30) 429.759.561 USD 132. 168.Notes to Consolidated Financial Statements b) Unhedged Foreign Currency exposure Shopper's Stop Ltd.06) (8.42 946.45 3.81 131. investing and financing activities of the discontinuing operations during the current year aggregated to Rs. In the opinion of the company the assets and liabilities will have a value on realization in the ordinary course of business that are atleast equal to the amounts at which they are stated in the Balance Sheet.508.41) 4.622.69) (14.33 82.87) 144.000 Particulars REVENUE Sales/Income Other Income Total Revenue Operating Expenses Pre-tax Profit/(Loss) from operating activities Interest Expense Profit/(Loss) before tax Income tax expense Profit/(Loss) from operating activities after tax Minority Interest Net Profit/(Loss) from operating activities after tax 31 March 2009 Discontinuing operations (Gateway) 858.215.96 lacs (Previous year Rs. The carrying amounts as of 31 March 2010.26.02 (2.365.199.182. a subsidiary of SSL had decided to discontinue operation in January 2009.28 5.742.80) — (15.60.843.000 GBP 174.494. 214. 579.43 664.40 145. 77.923.065 GBP 31.76) lacs) and Rs.635.09 (15.178 USD 11. Rs.18 145.543.17 5.588.834. lacs) Total 244.596.722.40 (3.303 USD 1.02 (6.58 138. (367.772 GBP 75.92 lacs) respectively. DISCONTINUING OPERATIONS: The Board of Directors of Gateway Multichannel Retail (India) Limited (Gateway). of the total assets relating to the discontinuing operations aggregate to Rs. The year end foreign currency exposures that have not been hedged by a derivative instruments or otherwise are given below: Particulars 31 March 2010 Rs.896. Statement showing the revenue and expenses of continuing and discontinuing operations: 31 March 2010 Discontinuing Continuing operations operations (Gateway) 144.99) lacs (Previous year Rs.728 USD 1.48 136.738.80) Total Continuing operations (All amounts in Rs.89 67. (275.52 1.15) 130.91 Annual Report 2009-10 | 118 .30 lacs (Previous year Rs. to enable Gateway to remain in existence and continue as a going concern till such time as it realizes its assets and settles its liabilities.78 (1.83 (8.24 59. in lacs Payable for purchase of Merchandise Payable towards Royalty Receivable on account of Royalty 30.82.10 130.46 (3.603.45 3.91 7.199.10 (3.309.01 129.840.774.742.70 31. in lacs 310. The net cash flows attributable to operating.50 4.834.01) 2.52 5.646 GBP 47.27 7.67 In Foreign currency GBP 3.74 3.60 In Foreign currency GBP 4.960 31 March 2009 Rs.975.60 14.80) — (15. 4.52) (4.825.72 1.25 127.32.084. 4.09) (10.849.994.60 138.87) — (3.02 lacs) and the total liabilities to be settled relating to the discontinuing operations aggregate to Rs.209.00 2.058.21 lacs (Previous year (114.896.18 (5.543.83 649.73 (4.93) lacs).27) 2.231.03) 1.69 2.17) 1.580.45 lacs (Previous year Rs.11 (15.42 944.40 18.

128 3. into one Equity Share at a price of Rs.865.400 44.62 32.284 48.593 10 33. 307. in lacs) (b) Weighted Number of equity shares outstanding during the year (c) Weighted Number of equity shares outstanding during the year after adjustment for dilution (d) Nominal value per share (Rs.42 — — 150.25) (18.01) 34.365.25) Mar-10 3.000 warrants to Promoters on 29 December 2009.) 10.Notes to Consolidated Financial Statements 31.52 — 198.588.62 185.870.94 — 206.521 632.000.00 — 478. 34. EARNING PER SHARE (EPS) IS CALCULATED AS FOLLOWS: Particulars (a) Profit/(Loss) attributable to equity share holders (Rs.934 716.29 10.865.) Diluted (Rs.069.63 Number of Options 890. Each warrant is convertible at the option of the Promoters.934 Shopper's Stop Ltd.18/.931 769. Mar-09 Weighted average exercise price 481.) (e) EPS: – – Basic (Rs.01 34. Figures of the previous year are regrouped and reclassified wherever necessary to correspond to the figures of the current year.493 — 778.at any time before the expiry of 18 months from the date of allotment.593 34.23 (18. The Company allotted 4. Annual Report 2009-10 | 119 .496 10 Mar-09 (6.555 — 108. ESOP SCHEMES Mar-10 Number of Employee Stock Option Outstanding: Outstanding at the beginning of the year Granted during the year Lapsed/Cancelled during the year Exercised during the year Surrendered during the year Outstanding at the end of the year Number of Options 778.875 35.598 Weighted average exercise price 478.

Notes Shopper's Stop Ltd. Annual Report 2009-10 | 120 .

Notes to Consolidated Financial Statements Shopper's Stop Ltd. Annual Report 2009-10 | 121 .

Notes to Consolidated Financial Statements Shopper's Stop Ltd. Annual Report 2009-10 | 122 .

Notes to Consolidated Financial Statements Shopper's Stop Ltd. Annual Report 2009-10 | 123 .

Notes to Consolidated Financial Statements Shopper's Stop Ltd. Annual Report 2009-10 | 124 .

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