Annualreport2007-08 Shoppers Stop

Annual Report 2007-08
start something
n e w. . .
Annual Report 2007-08 | 1

NEW PHILOSOPHY
Pioneer of modern retail in India, Shopper’s Stop Ltd.

has been instrumental in bringing about the retail
revolution in India. A professionally managed and
systems driven organisation, Shoppers Stop has always
been attuned to evolving consumers. Our customer
insights have enabled us to service them better and
fulfill aspirations.
Shoppers Stop has evolved its positioning to ‘Bridge to

Luxury’ and continues to reinforce its leadership position.
We recently revealed our New logo, which reflects the
essence of our new philosophy.
At Shoppers Stop we believe in a world of limitless

possibilities. We always set benchmarks, cross limits,
achieve the impossible and celebrate our successes.
Innovation being our key driver, we have adopted a new
philosophy of ‘Start Something New’ to give retail a
new dimension. We endeavour to Start Something New
in performance. Start Something New in products. Start
Something New in customer service. Start Something
New in life.
We have also introduced a New symbol to the brand

Shoppers Stop. Created out of the initials ‘SS’, the new
symbol gives one a cue of infinity & delivers the message
of infinite possibilities.

Over 2 lakhs members were added during the year in the
Shoppers Stop First Citizen loyalty programme with the
total number of members crossing the 1 million mark.
The Crossword Book Rewards loyalty programme had

93,078 members in the year 2007-08.
Shoppers Stop First Citizen members contributed 65%

to sales and the Crossword Book Rewards members
contributed 42% to sales.

N E W F O R M AT S
Consumers are on a continuous journey of personal

transformation. Shopper’s Stop Ltd. has brought to
consumers a range of retail formats that cater to various
consumer needs at various touch points in life.

We continue to add new experiences for our consumers as
we introduce new brands to fulfill ever rising aspirations.
Our retail formats cater to their home needs, lifestyle
needs and entertainment needs.

The company’s flagship business of department stores is
manifest in Shoppers Stop. A pioneer of modern retail
in India, Shopper’s Stop Ltd. today, is the country’s
largest chain of Department Stores. It offers customers
an international shopping environment and a world-class
shopping experience through its 24 stores in 12 cities.
It houses a host of international and domestic brands across

categories such as apparel, accessories, cosmetics, home
& kitchenware as also its own exclusive brands.
HomeStop is the first-of-its-kind premium home concept

store at Bengaluru, Mumbai and New Delhi, offering a
wide range of products and some of the most reputed
national and international brands.
It is a one-stop-shop for all home needs ranging from

home décor to furniture, bath accessories to bedroom
furnishings, mattresses to draperies, carpets to modular
kitchens & health equipment, all under one roof.

Spacious, well laid out bookstores that feature methodical
classifications, clear signages, dedicated enquiry/orders
desks and attractive displays along with cafés, reading
tables and chairs within the store make Crossword the
leader in the lifestyle bookstore category.
Its unique product mix of books, magazines, CD-ROMs,

music, stationery and toys is further enhanced with
services like Dial-a-book and Email-a-book and facilities
like gift vouchers and ‘Return, Exchange & Refunds’
policy. Crossword Bookstores Limited, is a wholly
owned subsidiary of the company with 48 stores across
the country.
Mothercare PLC of UK, the largest specialist retailer

for infant and toddler care, is now in India. It stocks a
variety of products for mothers and babies, toddlers and
children till eight years of age with the focus being on
style, function and safety. Mothercare is currently present
as 19 stores including 10 shop-in-shops at Shoppers Stop
in leading metros.

Shopper’s Stop Ltd. has a 19% stake in Hypercity Retail
(India) Ltd. The first store was opened in 2006 with an
area of over 124,000 sq. ft.
HyperCITY has redefined the experience of the Indian

consumer in the big store format. Its offering includes
food and grocery, general merchandise and apparel.
HyperCITY provides a truly international shopping
experience, where customers can shop in comfort in a
large, modern, and exciting environment.
Shopper’s Stop Ltd. has ventured into catalogue

Stores, call and collect stores, internet retail website
and telephone orders through its subsidiary, Gateway
Multichannel Retail (India) Limited under the name of
‘HyperCITY-Argos’. Currently there are 5 stores operating
at Thane.

Shopper’s Stop Ltd.’s foray into Food & Beverage began
with Brio - a step up the evolutionary ladder from
“franchised coffee bars.” Brio - the café bistro has been
designed to be a warm & friendly place to relax, revive
and reflect. It has a classic yet sophisticated ambience,
friendly service and excellent food. Brio has 20 outlets in
select cities.
Desi café is the Indian fast food concept by Shopper’s

Stop Ltd. The menu is, expectedly, as full of perennial
favourites as it is with yummy twists. The best part of
the fare is that it has something for every Indian. Be it
the breakfast section, the snacks, or the mini-meals –
the choices are diverse enough to take you on a cross-
country tour. The company is currently running 3 outlets of
Desi Café, one each in Delhi, Lucknow and Mumbai.

Shopper’s Stop Ltd. has entered into a non exclusive
retail agreement with world-renowned cosmetics major
Estee Lauder to open M.A.C Cosmetics stores in India.
M.A.C (Makeup-Art Cosmetics) the professional brand

of choice, is the first brand under the Estee Lauder
Group of Companies portfolio to enter the Indian
retail market. Currently there are 4 M.A.C stores
operating in Bengaluru, Delhi and Mumbai (2) with
Shopper’s Stop Ltd.
Arcelia is a new retail concept aiming at the growing

accessories & cosmetics segment, with a strong
emphasis on experience and indulgence and primarily
caters to discerning women shoppers. It retails cosmetics,
fragrances, fine jewellery, footwear, handbags etc.
Currently there are 2 stores operational in Delhi and Pune.

Shopper’s Stop Ltd.’s entry into airport retailing is
marked by a joint venture with The Nuance Group AG
of Switzerland, the world’s leading airport retailer.
Shopper’s Stop Ltd is handling the retail operations in
the duty paid zones whereas the joint venture company
is handling the operations at the duty free zones in
international terminals. The joint venture company,
called Nuance Group (India) Private Limited, is already
operating outlets at the international airports at Bengaluru
and Hyderabad.
Shopper’s Stop Ltd. believes that the Indian consumers

are looking for multiple options to entertain themselves
and their families. It has forayed into the Entertainment
sector by acquiring a 45% stake in Timezone Entertainment
Private Limited which is in the business of setting up &
operating Family Entertainment Centers (FECs). It has 5
outlets in Ahmedabad, Hyderabad, Kolkata and Mumbai.

NEW EXPERIENCE

Another exciting feature is the new limited edition of
Shoppers Stop shopping bags. The first in the series
are shopping bags depicting ‘Fashion through Ages’ like
the Audrey Hepburn – Breakfast at Tiffany’s look and
The John Travolta Saturday Night Fever look.
We have introduced Shoppers Stop Radio, the first

of its kind retail radio format in the country.
The Shoppers Stop Radio has two dedicated RJs
(Radio Jockeys) who entertain customers while they
shop. The radio plays all genres of music and also
provides important information to customers related
to shopping.

NEW APPROACH
We believe that shopping today is not confined

to need. It is a new form of entertainment, to
fulfill new aspirations and to bring out the new self.
Shoppers Stop revealed its new logo in all fanfare with
Mr. Shah Rukh Khan as our guest of honour. Upon
revealing the new look, Shoppers Stop also announced
the new cause of Think Green that it has taken up.

The first initiative under the Think Green campaign is
the cause of the Neem Tree. The exclusive brand ‘Life’
merchandise is now sold with sachets of Neem seeds
to help create awareness and encourage customers to
support the cause.
Shoppers Stop print advertising campaign, though

tongue in cheek, also highlights environmental
concerns. Shoppers Stop has been running a TV
campaign which communicates the brands new baseline
‘Start Something New’.

NEW ACCOLADES
It is a great honour and pleasure for us when our efforts
are recognised and acknowledged by our peers. These
NEW accolades give us the motivation to aspire for
even greater heights.
“Emerging Market Retailer of the Year” at World “Most Admired Retailer – Technology Application”
Retail Congress Awards at Images Retail Forum
Mr. B. S. Nagesh has been inducted into the World “Most Admired Retailer – Leisure Category” to
Retail Hall of Fame (The first Indian to be bestowed CROSSWORD at Images Retail Forum
with this honour)
“Most Admired Retailer – Retail Design & Visual
“Retail Destination of the Year” at the Images Merchandising” to HyperCITY at Images Retail
Fashion Forum (For 4 consecutive years) Forum
Received the following awards from the “Clothing “Department Store of the Year” at the Star
Manufacturers Association of India” (CMAI) : Retailer Awards
Retail Professional of the Year -
“Value Retailer of the Year” to HyperCITY at the
Mr. B.S. Nagesh. (For 3 consecutive years)
Star Retailer Awards
Advertising Campaign of the year -
Shoppers Stop. (For 3 consecutive years)

NEW REACH
Our presence is not confined to our floor space.

Our personality manifests itself regardless of location.
We aspire to reach as many customers as possible across
the country to ensure they can enjoy the ambience,
product range, service and experience that we offer.
In the year gone by we have opened new stores of

Shoppers Stop to expand our footprints in the NCR region
and Kolkata. Our Shoppers Stop store at Rajouri in New
Delhi is the largest department store in the country.
We have introduced a new retail concept under the
brand name Arcelia in Delhi and Pune.

The total number of stores across the country are
24 of Shoppers Stop, 19 of Mothercare, 48 of Crossword
(including franchisees and shop-in-shops), 3 of
HomeStop, 4 of M.A.C and 25 F&B outlets.
The total retail area for Shoppers Stop and its various
formats totals to 1.6 million sq.ft.
Gurgaon
Noida Ghaziabad
Delhi
Jaipur
Lucknow
Vadodara
Ahmedabad
Kolkata
Mumbai
Pune
Hyderabad
Shoppers Stop
DC locations
Bengaluru Hypercity
Chennai
Specialty
(includes Crossword, Mothercare, Arcelia, M.A.C,
Clinique and Food & Beverages outlets)
Graphical Representation not to scale

BOARD OF DIRECTORS
CHANDRU L. RAHEJA RAVI C. RAHEJA NEEL C. RAHEJA
GULU MIRCHANDANI SHAHZAAD DALAL NITIN SANGHAVI
DEEPAK GHAISAS NIRVIK SINGH B. S. NAGESH GOVIND SHRIKHANDE

CONTENTS
Chairman’s Statement 26
Board of Directors 28
Financial Highlights and Key Ratios 29
Directors’ Report 30
Management Discussion & Analysis Report 37
Corporate Governance Report 54
Auditors’ Report 65
Balance Sheet 68
Profit & Loss Account 69
Cash Flow Statement 70
Notes to the Financial Statements 71
Balance Sheet Abstract and Company’s

General Business Profile 89
Subsidiary Accounts
- Crossword Bookstores Limited 90
- Upasna Trading Limited 110
- Shopper’s Stop.Com (India) Limited 124
- Shopper’s Stop Services (India) Limited 134
- Gateway Multichannel Retail (India) Limited 144
Section 212 Report 165
Consolidated Financial Statements 166

C H A I R M A N ’ S S TAT E M E N T
The financial year 2007-08 has been a present a new opportunity. In keeping with have clocked impressive figures. In addition
challenging one for your Company. On the various opportunities that organized to the above we continue to expand our
the one hand your Company has shown retail in India offers your Company has presence through our various formats viz.
substantial like-to-like sales growth of launched certain new formats in 07-08, in Mothercare, M.A.C, Home Stop, Crossword
20%, across all formats, overall chain addition to expanding the Shoppers Stop and our F&B outlets.
level growth in sales of 34% and has also stores and existing formats.
Nuance Group (India) Private Limited, which
improved Gross margins by 37% and has
The year gone by saw us expanding the is the joint venture company between
continued on its path of organic growth
number of Shoppers Stop stores to 24, with Shopper’s Stop Ltd. and The Nuance Group
through its various formats. On the other
3 new stores being added in the Delhi/NCR AG, opened its first duty free stores in India,
hand the imposition of Service Tax on
region and 1 new store added in Kolkata. in the Hyderabad International Airport in
rentals has resulted in unprecedented
We have launched a brand new format March 08.
cost pressures.
called Arcelia which retails high end
The Bengaluru duty free airport stores
Your company has crossed the Rs. 1 billion non–apparel and accessories for ladies.
opened in May-08. Your company has always
revenue mark and has achieved revenues Arcelia , as a concept, is designed as an
looked at taking pioneering steps in the retail
of Rs.12069 Mn for 2007–08, a growth indulgence zone for the urban woman.
business and in all aspects related to it. To that
of 34% over the same period last year. In what is a clear indication of our
end we have launched our catalogue retailing
Whilst Sales per sq.ft. increased by 9%, strengthening ties with our international business through our Joint venture company
Customer Entry and Transaction size was partners, we also opened the first Clinique Gateway Multichannel (Retail) Ltd., which
up by 28% and 10% respectively. Your
store in the country in Delhi. Clinique is has opened 5 stores in Thane in the past
Company has delivered a Gross Margin of
a highly sought after brand from Estee financial year. Initial response to this business
32% on sales, of Rs. 3,810 Mn, a growth
Lauder which has products related to skin has been quite encouraging. The Company
of 37% over last year. The Net Profit after
care. It is my pleasure to inform you that is also actively progressing towards setting
Tax is Rs.70 Mn.
our duty paid stores in the new Hyderabad up an e-commerce portal to be able to offer
The retail sector continues to grow in a and Bengaluru airports also opened in its products for sale through the internet.
frenetic manner. Every new day appears to March-08 and May-08 respectively and Your Company believes, that through its

various brick and mortar formats, airport reflects the brand’s new character as an the year. Having contributed 65% to
stores, catalogue stores and the internet Inspiring guide, a Progressive & Dynamic the year’s sales, our First Citizens
option, the Shoppers Stop retail group brand and an Imaginative Thought leader. continue to be a pillar of loyalty & support
will be in touch with the customer on a for the business.
It is important to note here that this has
365 days x 24 hours basis.
not been a mere change of a logo. The The Indian economy has embarked
It gives me immense pride to announce exercise goes far beyond that and has on a robust growth path and with
that your Company received the Emerging been extended to change the various touch that the prospects of the organised
Market Retailer of the year at the World retail industry can only grow
points that each customer experiences
Retail Congress Awards 08 which is indeed brighter. Your Company is very
both within our stores and external to our
a huge achievement and honour for us. In well poised to take full advantage
stores. Your Company believes that these
addition to that your Company’s Managing of this growth and continue to stay
changes will go a long way in maintaining
Director, B.S. Nagesh, was inducted into ahead of its competition. Your faith and
its leadership position in the departmental
the World Retail Hall of Fame, the first trust in the Company and the untiring
store category.
Indian to be given this honour. efforts of its employees will surely
Your Company believes in being socially succeed in the Company retaining its
The management of your Company has
responsible. In addition to local initiatives LEADERSHIP position.
always believed in keeping pace with its
customer’s aspirations and has continuously at store level, we have also started the
endeavoured to be relevant to his/her “Think Green” initiative that involves the
lifestyle needs. To that end, your Company planting of 1.5 lakh neem trees in a span
of 90 days by distributing neem seeds with Chandru L. Raheja
undertook the project of changing its logo
Chairman
and bringing in a new brand philosophy for merchandise.
Shoppers Stop as a brand. The new logo
was launched in April 2008.
The country’s first retail loyalty program
The new logo, whilst retaining the earlier started by your Company, the First Citizens
virtues of Trust, Comfort and Warmth, also Club, crossed the 1 million mark during

Shopper's Stop Ltd.
Board of Directors
Chandru L. Raheja – Chairman Statutory Auditors

Ravi C. Raheja – Director Deloitte Haskins & Sells
Neel C. Raheja – Director Chartered Accountants
Gulu L. Mirchandani – Director 12, Dr. Annie Besant Road,
Shahzaad S. Dalal – Director
Opp. Shiv Sagar Estate,
Prof. Nitin Sanghavi – Director
Worli, Mumbai - 400 018
Deepak Ghaisas – Director
Nirvik Singh* – Director
Internal Auditors
B. S. Nagesh – Managing Director
Govind Shrikhande – Executive Director & CEO KPMG
KPMG House
Audit Committee Kamala Mill Compound,
Deepak Ghaisas – Chairman 448, Senapati Bapat Marg,
Ravi C. Raheja – Member Lower Parel, Mumbai - 400 013
Prof. Nitin Sanghavi – Member
Shahzaad Dalal – Member Bankers
Axis Bank Limited
Remuneration Committee/
Compensation Committee Citibank N.A.
Gulu L. Mirchandani – Chairman IDBI Bank Limited
Ravi C. Raheja – Member ICICI Bank Limited
Prof. Nitin Sanghavi – Member Kotak Mahindra Bank Limited
Shahzaad S. Dalal – Member Calyon Bank
Finance Committee Solicitors

Ravi C. Raheja – Chairman Wadia Ghandy & Co.
Neel C. Raheja – Member
B.S. Nagesh – Member
Shareholders Investor Grievance

and Share Transfer Committee
Ravi C. Raheja – Chairman
Neel C. Raheja – Member
B. S. Nagesh – Member
Vice President – Legal &

Company Secretary
Prashant Mehta
Registered Office & Service Office

Eureka Towers, B Wing,
9th Floor, Mindspace,
Link Road, Malad (West),
Mumbai - 400 064
Website: www.shoppersstop.com
* Nirvik Singh has been appointed as an Additional Director of the company w.e.f. June 16, 2008.

Financial Highlights & Key Ratios Shopper's Stop Ltd.
(Rs. in million)
2007-08 2006-07 2005-06 2004-05 2003-04
No. of Stores* 73 60 21 16 14
Income
Gross Retail Sales 11,901 8,850 6,660 5,001 3,953
Less: Value Added Tax 555 387 311 114 100
Gross Retail Sales (Net of taxes) 11,346 8,463 6,349 4,887 3,854
Other Operating & Miscellaneous Income 257 278 191 79 91
11,602 8,741 6,540 4,966 3,945
Expenditures
Cost of goods sold 7,535 5,688 4,322 3,421 2,712
Employee costs 783 585 403 288 224
Operating and administrative expenses 2,634 1,680 1,249 920 764
10,952 7,953 5,974 4,630 3,700
EBIDTA 650 787 566 336 245
Interest and finance charges 112 44 24 39 40
Depreciation 393 256 139 90 75
Profit Before Tax 145 487 402 207 130
Profit After Tax 70 262 271 190 120
Balance Sheet items
Share Capital 349 348 344 274 274
Reserve & Surplus 2,618 2,603 2,356 673 511
Loan Funds 1,729 1,131 586 874 589
Capital Employed 4,713 4,124 3,285 1,821 1,374
Fixed Assets 2,404 1,522 1,225 1,096 770
Net Working Capital 1,502 2,114 1,713 614 502
Profit & Loss Ratios
Sales (Chain level growth) 34.2% 32.7% 33.2% 27.3% 34.0%
Sales (Like to Like growth) 14.0% 21.0% 17.0% 9.1% 12.0%
Gross Profit Margin 32.0% 31.4% 30.4% 29.3% 28.9%
Operating Expenses Ratio 28.7% 25.4% 24.8% 24.2% 25.0%
Operating Margin (EBIDTA) 5.5% 8.9% 8.5% 6.7% 6.2%
PBT Margin 1.2% 5.5% 6.0% 4.1% 3.2%
PAT Margin 0.6% 3.0% 4.1% 3.8% 3.0%
Interest Coverage 5.3 13.7 18.1 8.2 5.9
Balance Sheet Ratios
Debtors No. of Days 2 3 2 2 2
Creditors No. of Days 42 43 44 36 35
Stock Turnover Ratio 3.3 3.7 3.9 3.4 4.1
Current Ratio 2.0 2.7 3.0 1.9 1.9
Assets Turnover Ratio 2.7 2.4 2.6 3.1 3.1
Debt Equity Ratio 0.6 0.4 0.2 0.9 0.8
Return to Investors
Return on Networth 2.4% 9.3% 14.9% 22.0% 15.4%
Return on Capital Employed 2.0% 6.6% 11.3% 14.2% 12.4%
Book Value Per Share (in Rs.) 85.14 85.46 80.86 34.55 28.70
EPS (taking equity share at Rs. 10/- each) (in Rs.)
Basic 2.00 7.58 8.12 6.94 4.44
Diluted 2.00 7.57 8.10 6.91 4.42
Cash EPS 13.27 15.00 12.41 10.22 7.23
Dividend Per Share 1.50 1.50 1.50 1.00 —
*Note :- Number of stores includes the Shoppers Stop Department stores, HomeStop and Specialty Stores (viz Mothercare, F&B,
Crossword, Arcelia, M.A.C, Clinique & Stop & Go).

Directors' Report Shopper's Stop Ltd.
Dear Members,
Your Directors are pleased to present the Eleventh Annual Report on the business and operations of the Company together with the
Audited Statements of Accounts for the year ended March 31, 2008.
Financial Performance
(Rs. in millions)
Year ended Year ended
Particulars 31 March, 2008 31 March, 2007
Retail Sales (Net of taxes) 11345.69 8463.05
Other Operating Income 168.30 145.03
Other Income 88.44 132.55
Total Revenues 11602.43 8740.63
Profit before Depreciation & Tax 537.91 743.40

Less: Depreciation 392.74 256.27
Profit before Tax 145.17 487.13

Less: Provision for Tax 75.50 225.18
Profit after Tax 69.67 261.95

Add/(Less): Balance brought forward from previous year 484.56 296.83
Proposed Dividend (incl. Dividend Distribution Tax) 61.17 61.12

Transfer to General Reserve 3.48 13.10
Balance carried forward 489.58 484.56
Performance Review
Your Company has opened five department stores i.e one at Noida, one at Kolkata and three at New Delhi during the year, taking its
chain of department stores to 27 stores spread across India. The revenue has touched Rs. 11,602 million (previous year Rs.8,741 million),
registering a growth of 33% on y-o-y basis, whereas cash profit stood at Rs. 538 million and net profit at Rs. 70 million against Rs. 743
million and Rs. 262 million respectively last year.
Dividend
Your directors are pleased to recommend a dividend of Rs.1.50 (previous year Rs.1.50) per equity share of Rs.10 each.
The dividend, once approved by the 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. 61.17 million, including dividend distribution tax, as compared to Rs. 61.12 million in the
previous year.
AWARDS AND RECOGNITION

Your Company has been conferred with the following awards and recognitions during the year under review:
l “Retail Destination of the Year” at the Image Fashion Forum;
l “Most Admired Retailer of the Year” for technology applications at Image Retail Award, 2007;
l “Advertisement Campaign of the year” CMAI APEX Awards;
l “Departmental Store of the year” at Star Retailer Award.
Further, Mr. B. S. Nagesh, Customer Care Associate & Managing Director of Company has been inducted in the “World Retail Hall of Fame”
along with your company winning “the Emerging Market Retailer of the Year Award”, at World Retail Congress, Barcelona, Spain.

Status on utilization of IPO proceeds

As you are aware, your Company had made its initial public offerings (IPO) through 100% book building process in the year 2005 and
raised Rs. 1653.16 million by issuing 6,946,033 Equity Shares of Rs.10 at a price of Rs. 238 per share inter-alia with the “Object of the
Issue” for setting of 11 new stores, renovating and expanding some of our existing stores.
As there was considerable delay in delivery of certain store premises which were forming part of the “Object of the Issue”, the Company
has modified the aforesaid “Object of the Issue” with the approval of members at the last Annual General Meeting. Further, the renovation
of Andheri store as envisaged was also replaced with renovation of Malad store.
Out of the Rs. 1,653.16 million so raised, Rs. 1,578.50 million were utilized towards the objects of the IPO. The unutilized balance have
been utilized in temporarily reducing exposure to working capital borrowings.
Share Capital
During the year under review, the paid up equity share capital of the Company has increased by Rs. 0.35 million on account of allotment
of equity shares pursuant to exercise of stock options under various ESOP Schemes.
The Company has filed draft Letter of Offer with Securities & Exchange Board of India (SEBI) for issue of equity shares and detachable
warrants thereto for raising a sum upto Rs. 5000 million by way of Right Issue to its existing equity shareholders.
Credit Rating
Fitch Ratings India Private Limited has continued its rating of “F1+(ind)” [F one plus ind] for short term debt/commercial paper programme
which is now increased to Rs. 800 million, indicating highest credit quality with strongest capacity for timely payment of financial
commitments.
We have also got rated by CRISIL for short term and long term borrowings for a sum of Rs.500 million each. For short term, CRISIL has
assigned us a rating of P1+ whereas for long term, a rating of A+ has been assigned.
Finance
Your Company continues with various initiatives for bringing down the cost of borrowings which includes application of new dynamic
short term instruments so as to have an increase in cash flow, reducing interest cost and improving working capital management.
Employees Stock Option Plan

Your Company has formulated and designed Employees Stock Option Plan Schemes (ESOP Schemes) for its employees. During the year
under review, the Company has allotted 35,096 Equity Shares of Rs.10 each under the said ESOP Schemes.
Under Employees Stock Option Plan Scheme V (ESOP 2005), during the year under review, the Company has granted 400,000 Stock
Options and 20,000 Stock Options on August 23, 2007 and January 28, 2008 respectively to the specified employees.
Since Stock options issued under ESOP Scheme I and II have been fully vested and exercised by the employees, the schemes are already
over. ESOP Scheme III, IV and V are in force and their vesting is scheduled in due course of time.
The particulars of Employees Stock Option Plan (ESOP) Schemes, as required by SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999, as amended, are appended herewith and forms part of this Report.
Since, substantial portion of earlier 10,00,000 options approved by members under Employee Stock Option Plan V (“ESOP 2005”)
has been exhausted, it is proposed to seek your approval at the forthcoming Annual General Meeting, for grant of further 10,00,000
Employee Stock Options (ESOPs) to the employees of the Company and its subsidiaries under Employee Stock Option Scheme 2008
(“ESOP 2008”).
Fixed Deposits
During the year under review, the Company has not accepted any deposit under Section 58A of the Companies Act, 1956, read with
Companies (Acceptance of Deposits) Rules, 1975. No amount of principal or interest was outstanding as on the Balance Sheet date.
Subsidiary Companies
As required under section 212 of the Companies Act, 1956, the Audited Balance Sheet and Profit & Loss Account along with respective
Reports of the Board of Directors’ and Auditors’ thereon of the following subsidiary companies for the year ended March 31, 2008 are
attached:

a) Crossword Bookstores Ltd.

b) Upasna Trading Ltd.
c) Shopper’s Stop.Com (India) Ltd.
d) Shopper’s Stop Services (India) Ltd.
e) Gateway Multichannel Retail (India) Ltd.
In compliance with Clause 32 of the Listing Agreement, and Accounting Standard AS 21, prescribed by the Institute of Chartered
Accountants of India, audited consolidated financial statements forms part of this Annual Report.
Human Resources
As an organization we are committed towards achieving exponential growth in our quest to become the leader in the department store
category, delivering higher levels of sensory experience touching the hearts and minds of our consumers, stakeholders and employees.
In continuation of our belief that people are the primary source of sustainable competitive advantage, your Company has worked
continuously towards ensuring that its people practices are in line with being an employer of choice.
As on date of the Balance Sheet, the Company had a total of 3,754 Customer Care Associates.
Auditors
Your Company’s Statutory Auditors, Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the forthcoming
Annual General Meeting. Deloitte Haskins & Sells have sought the re-appointment and have confirmed that their re-appointment, if made,
shall be within the limits laid down under Section 224(1B) of the Companies Act, 1956.
The Audit Committee and the Board of Directors recommends the re-appointment of Deloitte Haskins & Sells, Chartered Accountants,
as the Statutory Auditors of the Company.
Directors
In accordance with the provision of the Companies Act, 1956 and Articles of Association of the Company, Mr. B.S. Nagesh and
Mr. Shahzaad Dalal, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves
for re-appointment.
Mr. Govind Shrikhande, who has been appointed as an Executive Director and CEO of the Company for a period of 3 years w.e.f. July 29,
2006; is proposed to be re-appointed as an Executive Director and CEO of the Company for further period of three years w.e.f. July 29,
2009; subject to necessary approval of the Shareholders of the Company.
Mr. Nirvik Singh, was appointed as an Additional Director on the Board of your Company with effect from 16 June, 2008. The Company
has received a notice in writing from a member of the Company under Section 257 of the Companies Act, 1956 signifying his intention to
propose the appointment of Mr. Nirvik Singh, as a Director of the Company.
A brief resume, 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 Eleventh Annual General Meeting.
Corporate Governance
The Company has been pro-active in following the principles and practices of good Corporate Governance. 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.
A separate section on Corporate Governance and Auditors Certificate is annexed hereto and forms part of this Report.
Compliance with the Code of Conduct

The Company had evolved and adopted a Code of Conduct for its Board of Directors and its managerial personnels based on the principles
of good corporate governance and best management practices. The declaration of compliance with the Code of Conduct has been
received from all Board Members and the managerial personnels. The Code is available on the website of the Company.
A certificate in this effect from Mr. Govind Shrikhande, Executive Director and Chief Executive Officer forms part of this Report.
Conservation of Energy, Technology absorption and Foreign Exchange earnings & outgo
The particulars regarding foreign exchange earnings and expenditure are annexed hereto and forms part of this report. The other particulars
relating to conservation of energy and technology absorption stipulated in the Companies (Disclosure of Particulars in the Report of the
Board of Directors) Rules, 1988 are not applicable to the Company.

Particulars of Employees
Information on particulars of employees’ remuneration as per Section 217(2A) of the Companies Act, 1956, read with Companies
(Particulars of Employees) Rules 1975 forms part of this report. However, as per provisions of Section 219(1)(b)(iv) of the Companies Act,
1956, the report and accounts are being sent to all shareholders of the Company, excluding the Statement of Particulars of Employees,
which is available for inspection at the Registered office of the Company during working hours. Any shareholder interested in such
particulars may inspect the same.
Directors’ Responsibility Statement

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Board of Directors confirm that:
1. In the preparation of Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating
to material departures;
2. they have selected such accounting policies and applied them consistently and made judgements 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, 2008 and of the profit of the
Company for the year ended on that date;
3. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions
of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other
irregularities;
4. they have prepared the annual accounts on a ‘going concern’ basis.
Auditors Report
The Board has duly examined the Statutory Auditors report to accounts and the clarifications, wherever necessary, have been included
in the Notes to Accounts, section of Annual Report.
Acknowledgement
Your Directors express their warm appreciation to all the employees of the Company for their diligence and contribution.
Your Directors acknowledge with sincere gratitude the co-operation and assistance extended by customers, business partners,
associates, banks & financial institutions, suppliers, solicitors, advisors and all well wishers for their continuous guidance and support.
And to you our shareholders, we are deeply grateful for the confidence and faith that you have always placed in us.
For and on behalf of the Board of Directors
Mumbai, Chandru L. Raheja

16 June, 2008 Chairman
Certificate of Compliance with the code of conduct

I, Govind Shrikhande, Executive Director & Chief Executive Officer of the Company, hereby declare that the Company has adopted a Code
of Conduct for its Board Members and its managerial personnel and they have affirmed compliance with the said Code of Conduct.
For Shopper's Stop Ltd.
Govind Shrikhande
Mumbai, Executive Director &
25 April, 2008 Chief Executive Officer

Annexure to the Directors' Report Shopper's Stop Ltd.
Foreign Exchange Earnings and Outgo

The Company earns foreign Exchange on sale of its merchandise to its customers. Foreign Exchange outgo during the year included
purchase of computer software and purchase of merchandise, professional fees etc.
(All amounts in millions of Indian Rupees)
Foreign Exchange Earnings : Rs. 493.73
Foreign Exchange Outgo : Rs. 376.31
Information required to be disclosed under SEBI (ESOS and ESPS) Guidelines, 1999 as on March 31, 2008
Description ESOP III ESOP IV ESOP V - 1 ESOP V - 2 ESOP V - 3 ESOP V - 4 ESOP V - 5 ESOP V - 6
Options Granted 155,640 122,340 100,151 232,056 145,000 13,381 400,000 20,000
Date of Grant 01.05.2004 01.02.2005 28.12.2005 29.07.2006 29.07.2006 28.10.2006 23.08.2007 28.01.2008
The pricing Rs.150/- Rs. 240/- The options The options The options The options The options The options
formula granted granted granted granted granted granted
to eligible to eligible to eligible to eligible to eligible to eligible
employees employees employees employees employees employee
are granted are granted are granted are granted are granted are granted
at the at the at the at the at the at the
average of average of average of closing price closing price closing
the daily the daily the daily of the Equity of Equity price of
closing price closing price closing price Shares shares of the Equity
of Equity of Equity of Equity of the Company shares of the
Shares Shares Shares Company at BSE on Company
of the of the of the at BSE on working day at BSE on
Company at Company at Company at working day immediately working day
BSE during BSE during BSE during immediately preceding immediately
the period the period the period preceding the date of preceding
of 6 months of 6 months of 6 months the date of grant. The the date of
immediately immediately immediately grant. The options were grant. The
preceding preceding preceding options were granted at options were
the date on the date on the date on granted at an exercise granted at
which the which the which the an exercise price of Rs an exercise
options were options were options were price of Rs. 485/- price of
granted. granted. granted. The 595/- Rs.423/-
The Options The Options options were
were were granted at
granted at granted at an exercise
an exercise an exercise price of Rs.
price of Rs. price of Rs. 540/-
384/- 540/-
Options vested 113,517 52,812 41,568 60,896 — 4,014 — —

Options 88,096 36,045 16,781 — — — — —
exercised and
total number of
equity Shares
arising as a
result of exercise
of Options
Options lapsed / 42,123 40,872 32,894 41,202 — — — —
Cancelled
Variation of — — — — — — — —
terms of options
Money realised 13,214,400 8,650,800 6,443,904 — — — — —
by exercise
of options
Total number of 25,421 45,423 50,476 190,854 145,000 13,381 400,000 20,000
Options in force
Options granted to Senior Managerial personnels
B. S. Nagesh 22,560 13,980 11,353 24,168 50,000 — — —
Govind 9,230 7,270 5,306 12,279 45,000 — 1,00,000 —
Shrikhande
C. B. Navalkar 7,140 4,470 3,469 6,702 25,000 — 40,000 —
Harsimran Singh — — — — — 6,724 20,000 —
Kumar Sitaraman — — — — — — — 20,000
Arun Gupta — — — — — — 20,000 —
Vivek Mathur — 2,310 1,302 3,130 — — 20,000 —

Annexure to the Directors' Report Shopper's Stop Ltd.
Description ESOP III ESOP IV ESOP V - 1 ESOP V - 2 ESOP V - 3 ESOP V - 4 ESOP V - 5 ESOP V - 6
Options granted to any employee during the year amounting to 5% or more of options granted during the year.
B. S. Nagesh 22,560 13,980 11,353 24,168 50,000 — — —
Govind
9,230 7,270 5,306 12,279 45,000 — 1,00,000 —
Shrikhande
C. B. Navalkar — — — — 25,000 — 40,000 —
Arun Gupta — — — — — — 20,000 —
Harsimran Singh — — — — — — 20,000 —
Vivek Mathur — — — — — — 20,000 —
S. Ranganathan — — — — — — 20,000 —
Salil Nair — — — — 25,000 — 40,000 —
Kumar Sitaraman — — — — — — — 20,000
Options granted — — — — — — — —
to any employee
equal to or
exceeding 1%
of the issued
capital of the
company at the
time of grant.
Diluted Earning Per Share (EPS) The Diluted EPS of the Company calculated after considering the effect of potential equity shares
pursuant to issue of shares on arising on account of exercise of options is Rs. 2.00 per share.
exercise of option calculated
in accordance with (AS) 20
Earnings Per Share.
Where the Company has Had the Company followed fair value method for accounting the stock option, compensation
calculated the employee expenses would have been higher by Rs. 48.02 million. Consequently Profit after tax would have
compensation cost using the been lower by Rs.48.02 million and the basic EPS of the Company would have been Rs.0.63 per
intrinsic value of the stock share (lower by Rs.1.37 per share) and the diluted EPS would have been Rs. 0.63 per share (lower by
option, the difference between Rs. 1.37 per share).
employee compensaton cost
so computed and the employee
compensation cost that shall
have been recognised if it had
used the fair value of the option,
shall be disclosed. The impact
of this difference on profits and
on EPS of the Company shall
also be disclosed.
Weightage average exercise Weighted average exercise price - Exercise Price is less than market price - Nil, Exercise Price is more
prices and weighted average than market price - Nil, Exercise Price is equal to market price - Rs. 425.95. Weighted average fair
fair value of the options shall value - Exercise price is less than market price - Nil, Exercise price is greater than market price - Nil,
be disclosed seperately for Exercise price is equal to market price - Rs. 146.32.
options whose exercise price
either equals or is less than the
market Price of the stock.
A description of the method and The estimated fair value of ESOP V granted during the year is Rs. 146.32. This was calculated by
significant assumption used applying Black Scholes Option Pricing Model. The Model inputs were the share price at the grant
during the year to estimate the date of Rs. 406.29, exercise price of Rs. 425.95 expected volatility of 37.98%, no expected dividends,
fair values of options. expected life of 3.60 years and risk free rate of 7.37%. Since the Company is newly listed it does not
have sufficient information on historical volatility for the longest period for which the trading activity
is available have been considered.

Certification By CEO & CFO Shopper's Stop Ltd.
To,
The Board of Directors
Shopper’s Stop Limited
Eureka Towers,
B Wing, 9th Floor,
Mindspace, Link Road,
Malad (West),
Mumbai – 400 064.
Dear Sirs,
We hereby certify that:
(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;
ii. these statements together present a true and a fair view of the Company’s affair and are in compliance with existing accounting
standards, applicable laws and regulation.
(b) There are, to the best of our knowledge and belief, no transaction entered into by the Company during the year which are fraudulent,
illegal or violative of the Company’s code of conduct.
(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, deficiencies in the design or operation of such internal controls, if any, of which we are aware and the
steps we have taken or propose to take to rectify these deficiencies.
(d) We have indicated to the auditors and the Audit Committee:
i. significant changes in internal control over the financial reporting during the year;
ii. significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial
statements; and
iii. instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an
employee having a significant role in the company’s internal control system over financial reporting.
For Shopper's Stop Limited
Govind Shrikhande Chandrashekhar. B. Navalkar

Chief Executive Officer Group Chief Financial Officer
April 25, 2008

Management Discussion and Analysis Report Shopper's Stop Ltd.
Growing Opportunity in India for Organized Retailing :

The size of the Indian retail industry was pegged at USD 300 bn in 2006, accounting for nearly 39% of GDP and almost 62% of private
final consumption expenditure (PFCE). The 2007 Asia- Pacific Wealth Report, released by Merrill Lynch and Capgemini, says that India has
recorded the world’s second-fastest growth in the number of high networth individuals at 20.5 percent, making it a lucrative luxury.
The retail landscape in India is gradually evolving and likely to reach a size of USD 453 bn by FY11. Over the last decade, the share of
modern retail has been gradually improving from below 1% in 1999 to 4.1% currently. The growth has been more rapid 2004 onwards.
Growth in consumption, coupled with the growing prosperity of the new age consumers, is driving this acceptance of modern retail.
Despite rising share of organized retail in India, its penetration is miniscule in comparison with the penetration in developed economies
which stands at 75-85% and at 20-40% in other emerging markets. In Thailand, there has been an explosion in the growth of organised
retail, with over 40% of the trade moving to modern formats within 10 years. The easy entry of foreign retailers and geographic
concentration of the retail industry has facilitated this growth. In Poland, where modern retail has captured 20% of the market in the past
nine years, easy access to real estate, a level playing field between modern and traditional retailers, and early entry for foreign retailers
contributed to the growth.
In the backdrop of low penetration, favourable demographics, steady economic growth, easy availability of credit, and large scale real
estate developments, the modern retail sector is poised to grow robustly at a 42% CAGR over FY07-11, to reach a size of USD 70 bn;
its share in total retail is likely to improve from 4.1% currently to 15% by FY11. This growth is mainly on the back of changing customer
aspirations and improving retail real estate infrastructure in the country. The growth could be even higher, if the Indian consumers have
to leapfrog evolution cycles, as they did for the mobile phones in the past.
India Most Attractive Retail Destination :
India has been rated as the most attractive retail destination in the world by AT Kearney for the third year in a row; the company’s annual
Global Retail Development Index (GRDI) ranks 30 emerging countries, selected from a universe of 185 countries, on a 100 point scale
(based on country risk, population size, and wealth) to find out the relative attractiveness of these markets.
Retailing in India is currently at an inflexion point. The main factor announcing the significance for the retailers is the current optimal stage
of readiness for retail and the entry of retailers into India. AT Kearney classifies retail markets worldwide and their study shows that retail
markets progress through four stages as they evolve from an emerging to a mature market, usually over 5-10 years. These stages are
opening, peaking, declining, and closing. India is currently very attractively placed in the peaking stage.
Window of opportunity for entry- GRDI rankings 1995-2007 :
Opening Peaking Declining Closing

High Priority China (2000) Russia (2007)
Vietnam (2006) China (2007)
Malaysia (2003) Ukraine (2007)
Hungary (2003) India (2007)
India (2003) Russia (2004) Bulgaria (2007)
Malaysia (2006) Slovakia (2003) Slovakia (2005)
Ukraine (2004) Hungary (2004)
Vietnam (2003)
Bulgaria (2003)
CRDI
ranking China (1999)
India (1996) Hungary (2006)

Slovakia (2007)
Hungary (1996)
Kazakhstan (2005)
Low Priority
Monitor market Open local office (sourcing, research) Expedite No pattern identified
Action test the market and learn implementation
Not Applicable Consider cash and carry or convenience Introduce discount Tailor format to meet
Format
formats apart from supermarket and hypermarkets specific consumer needs
ofentry at work
Not Required Hire and send expatriates employees Scale up operations, No pattern identified
Labour
to location increase local hiring,
strategy participate in community
Source: AT Kearney

Key Asian economies like Vietnam and India are peaking (developing quickly and ready for modern retail), while China has just tipped into
the declining phase (big and growing, but with tighter space for the new entrants). India, in 2007, is what China was in 2003. This means
that the next 3-4 years are best for foreign retailers and other Indian corporates to enter the Indian retail fray; it is also the perfect time
for the existing players to expand operations in a big way.
GRDI 2007 – market share attractiveness :
Slovekia On the radar screen Size of the bubble

100 United Arab indicates grocery
Emirates To consider
sales excluding
Hungary Lower priority
taxes
Mexico
Country risk (economic and political)
Chile
75 Lithuania Latvia China
(0-high risk; 100-low risk)
Thailand Malaysia
Croatia
India
Bulgaria Saudi Arabia
Morocco Russia
Tunisia
Romania Vietnam
Brazil Turkey
50
Colombia
Peru Egypt
Philippines Ukraine
Indonesia
Uruguay
Argentina
25
Algeria
15 25 35 45 55
Market potential*
(0 - low potential; 100 - high potential)
*Based on weighted score of market attractiveness, market retention and time pressure Source: AT Kearney
Strong growth in PFCE (Private Final Consumption Expenditure) and shift in favour of discretionary spend set to drive
retail spend :
Over FY02-05 PFCE (accounting for close to 60% of GDP) has seen an average growth of over 8.5% compared with an 8% average GDP
growth in the same period. Further, PFCE is expected to grow at a CAGR of 9.2% over the next 5-6 years on the back of strong economic
growth and a stable savings rates. The share of PFCE to GDP in India (62%) is similar to countries like Japan (57%) and the US (70%), as
against China that derives only 40% from PFCE. This high share of PFCE is good for India, as the growing income levels are likely to drive
consumption, which in turn, will fuel business opportunities, leading to GDP expansion eventually.
An analysis of the break-up of PFCE reveals a shift in the consumption pattern of the consumers. The share of necessities in the
consumption basket is gradually falling whereas spend on other discretionary products like apparel, recreation and entertainment, and
personal care is slowly growing share. This is an indicator of the improvement in the lifestyle of the population, and is likely to drive the
growth of retail spend in discretionary avenues like beauty, health care, catering services, and entertainment.
Metros and tier I towns account for the lion’s share of modern retail :
The top eight cities like Mumbai, Chennai, Delhi, Kolkata, Pune, Ahmedabad, Hyderabad, and Bengaluru account for a large part of the
modern retail in the country and are expected to contribute almost 85-90% to the total modern retail, going forward. This explains the
focus of all the major retailers to establish their presence in the best catchments in these prime locations. The share of modern retail in
these top eight cities is much above the country average, at about 14-16%. Going forward as the competition intensifies, the tier II and
tier III cities, and towns are poised to form a significant part of the growth plans of most retailers.
Retail Growth Drivers for Modern Retail in India :

Indian retail is witnessing a confluence of several favourable factors such as steady economic growth, favourable demographics, easy
availability of credit, investments in infrastructure creation, and supply of real estate and malls. This, coupled with low penetration,
creates a base for the next big leap of growth for the modern retailing industry.

Growing young & working population :

The median age of the Indian population is around 24 years, making it one of the youngest countries in the world compared with the
US, China, and Japan with median ages of 35, 30, and 41 years, respectively. India also has the largest share of the working population
globally, with increasing economic prosperity and greater number of jobs in the service sector, especially in IT/ITES. This young population
spends generously on lifestyle products without any guilt of indulgence.
Increase in urban population :
In India, urban population accounts for close to 30% of the population, and further is expected to increase in future. The higher level of
urbanization is going to bring growth in modern retail, as both income level and accessibility improves. Additionally, increasing urbanisation
leads to development outside the top tier cities and development in infrastructure.
Increase in working women :
The number of working women, as a percentage of the total female population, has risen from ~12% in 1961 to close to 25% in 2005.
This has resulted in growing disposable income, which in turn, leads to increasing retail spend. The rising income level of the female
population has opened a whole new genre of retailing formats and products, catering exclusively to women.
Growing Nuclear families :
The average size of Indian households has fallen to 5.36 in 2001 from 5.57 in 1991 and is expected to reduce further to 5.02 by 2011. The
consumption pattern of a nuclear household is very different from that of a joint family. In a nuclear set up, the demands of children and
time crunch of a working woman dominate the shopping pattern. With this kind of a set up, the concept of weekend outings and eating
out has become very popular.
Sensitivity towards Experience & informed buying :
Over the years, consumer awareness about quality and price of products/services has increased due to increasing level of literacy in the
country and growing exposure to the developed nations via satellite television or overseas work experience. There is a logical shift to
buying from modern retail chains with established corporate backgrounds and pronounced accountability.
Brand consciousness :
Nowadays, Indians are more confident and optimistic of their future, and therefore, do not mind saving less and spending more on retail
goods and services. This explains why savings and investments constituted only 4% of the Indian consumer’s wallet in 2003, down from
14% in 1999. The Indian consumers are seen spending more and more on discretionary heads than the necessities. In the last 4-5 years,
the Indian markets have witnessed a strong shift towards branded products. Indian consumers have now begun to believe that branded
goods signify better quality and offer greater value for money, and are not just for the elite class. This shift in perception of branded goods
has been the highest in the case of apparel. Most of the leading world brands like Levis, Pepe, Lee, Arrow, Espirit, Nike, Reebok, Hugo
Boss, Ray Ban, and Parker are now available in India; brands like Louis Vittion and others are flocking to India to set shops. Currently,
global brands in many segments like fast food, cosmetics, office stationary, and accessories are flocking into the country to pamper Indian
consumers.
Growing usage of credit cards :
The Indian consumers are gradually accepting plastic money. Indians spend just 1% of their total purchases through credit cards, while
the Koreans make one-fifth of their total purchases through credit cards. The world average hovers around 9%. From a mere 3.2 mn in
2000, the number of credit cards has grown to 22.6 mn in 2007. This increase boosts retail spend, as it enables impulse buying and big
ticket purchases.
Easy availability of loans :
To capture the growing consumption, banks and lending institutions have designed and customized loans to suit the requirements of
consumers. Personal loans have become the order of the day and the competition in the space has only made it better for the consumer.
Attractive rates and convenient repayment options have put a lot of money in the hands of people, which is driving consumption.
Real Estate Development Facilitating Growth by Providing Access to Quality Retail Space :
Real estate availability is a key factor influencing the choice of the right location. Real estate costs for the Indian modern retailers are
8-20% of sales compared with 3-4% for retailers in other countries. Choice of the right real estate is crucial for the success of modern
retail, as there are significant strategic and financial implications involved. This is the key reason for the mad rush among retailers to get
the best location in the same catchment or city.

In the next 4-5 years, the country will have over 1,000 hypermarkets and 3,000 supermarkets. Real estate players have already announced
big plans for development of close to 300-600 malls and shopping complexes all over the country. However, of the 100 mn sq ft that is
expected to be developed by 2009, close to 50% is concentrated in the metros and tier I cities. This will result in clustered spaces, all
fighting for the same catchments; consequently, the untapped markets, though ready, will not have the requisite space.
According to a study done by Cushman & Wakefield, the country’s smaller towns and cities would catch up with the “mall culture”
prevalent in urban centers with the benefits of economic development that has already created a booming consuming class. According
to the report, roughly 300 mn sq ft of additional retail space would be generated for retail development by 2011, of which, close to 50%
will be met by shopping malls. Of the new mall space coming up, 35-40% will be in smaller towns and cities.
This will be in line with the retail market growth trickling down the tier I and II cities across the country. According to Knight Frank, the
emerging avenues for retail are cities such as Chandigarh, Ludhiana, Lucknow, and Goa, where the retail real estate is in the developing
stages currently.
Growing retailer interest in space development to gain control over best locations :
Given the crucial role of location in the success of retail operations, a large number of retailers are setting up subsidiaries or group
companies to develop retail space. This gives the retailers the twin advantages of having greater control over the delivery schedules (to
plan roll-outs more efficiently) and gaining better access to key locations.
Change in Urban Land Ceiling Act and development of mill lands to augur positive :
The Urban Land Ceiling Act (ULCA) prohibited landowners from developing more than 500 sq mt of land without the necessary approvals
from the state government; also, the developer was necessitated to share some land parcel with the government. This led to holding
of land without any development, causing shortage of land for commercial usage, thereby increasing rentals. However, this Act was
recently repealed to promote industrialisation. In June 2005, GoI cleared the SEZ Act to promote industrialisation and develop more cities.
Though currently it is a topic of intense debate among various stakeholders, the Act would go a long way in developing real estate and
modern retail in future. Lastly, development of mill lands, like that of the National Textile Corporation, has ensured availability of suitable
locations for modern retail. All these factors augur well for the sector.
Existing Scenario and Outlook - Key Trends in Modern Retail moving into third gear :
Retail in India is currently evolving and is gradually moving from the second gear of development to the third. The retailers in the country
are currently looking at establishing themselves in this high-growth space as early as possible to ensure that they capture as much market
share in terms of retail space and consumer spend.
Different stages in growth of modern retail in India
Create Increase customer Strength backend Consolidation

awareness expectation management
Retailers going
global/M&A
Retailers
strengthening
backend system
Growth
Consumer demand
organised formats
New retail entrants

driving growth
First gear 1995 Second gear 2004 Third gear 2007 Fourth gear 2012
Source: CrisInfac

Aggressive expansion plans – Inflow of USD 25 bn over next five years :

If the expansion in the past has been fast-paced, the future has much more in store. Players have set out plans to invest close to USD
25 bn over the next four years. The opportunity in the sector has brought into the arena many large domestic corporations and global
retailing companies.
Foreign brands keen on partnering :

Many foreign brands are now tying up with leading Indian retailers either as joint ventures, or exclusive franchisees to set shops in India.
They are keen to enter market in the right way, to tap the swelling middle as well as luxury classes in the country. Going forward, a large
part of the middle class is expected to move upwards into the rich segment. Currently, industry estimates peg the number of high net
worth individuals with financial assets, outside fixed assets, of USD 1 mn and above at 83,000. The luxury segment in India is worth USD
444 mn and is growing at well above 30-35%. Another data point available is that the number of luxury households in India is 1.6 mn
currently, which is expected to cross 3 mn by 2010.
Control over prime retailing space :
Spiraling real estate prices and thus increasing rentals are hampering the profitability of many retailers. The recent introduction of service tax
on rentals have further increased the occupation cost of retailers as most of them are not in a position to set off the input service tax fully.
In order to have better control on retail space, many retailers enter into Long Term Leases (ranging from 10 to 25 years). Many are
tying up with the developers to ensure access to the best retailing locations at reasonable rentals. Many companies have set up group
companies or subsidiaries to develop quality retail space delivery within predetermined timelines. The ability of retailer to have better
control over the retail space is the key variable that can impact profitability and growth plans of the retailers.
Emergence of multiple modern retailing formats providing different value proposition & capturing maximum share of
consumers wallet :
Nowadays, consumers prefer value convenience and a wide variety of offerings, coupled with a pleasant shopping experience, which the
traditional retailing format has failed to meet. This has created an opportunity for modern retailing formats to emerge and plug the existing
gaps. A number of these have sprung up, each offering a distinct value proposition to the consumer.
In the past, Indian consumers have shown their ability to leapfrog cycles of market evolution and the same can be expected in the retail
space too. This trend is evident from analysis of the retail market evolution in other Asian countries. In the current rapid retail growth
scenario, retailers do not have too much of time to establish, consolidate, and then mature which is pushing them to capture as many
segments as possible with multiple formats.
The history of development of retail industry across the world indicates that in the opening and peaking stage of retail development,
the retail space is dominated by supermarkets and hypermarkets. These typically account for 75-80% of all formats, in line with
the rush to set up hypermarkets witnessed in the Indian scenario. The leading Indian retailers have extended their businesses into the
hypermarkets space to capture the retail opportunity from the swelling middle class.
Modern retailing began in India through players catering to the lifestyle segment via various department stores that largely focused on
branded apparel merchandise. Going forward, we see these departmental stores (mainly restricted to the metros currently) increasingly
trickling down to the smaller cities.
Specialty stores are fast catching the fancy of Indian retailers. Such a format caters to specific merchandise and focuses on a single
category, offering a large range of selection within a single merchandise category. These stores enjoy strong customer loyalty with
interesting loyalty programmes. A recent trend in the segment is the development of specialty malls like Gurgaon’s Gold Souk and
Bengaluru’s EVA mall.
Most of the leading retailers are now aiming at well diversified presence across the consumption basket. The recent addition by leading
players is in the form of catalogue retailing. Through this a large share of the consumer wallet is targeted. This strategy of Indian
retailers gives them the flexibility to cater to a broad-based buying basket of the consumer and also manage competition better in the
near term.
Your company, in its endeavor to increase its share of the consumer wallet,has launched an array of formats.
The latest format that your company has launched is called Arcelia. This concept retails high end cosmetics, perfumes, leather products
and footwear for discerning women. Combining the offering of shopping plus entertainment Arcelia also conducts regular spas and make
over sessions which attract more footfalls and increases sales.
Joint Ventures :
In July, 2007, we executed a series of agreements for launching a new format of retailing through shelf-edge point of sale material,
indicating that the product lines are available in the Catalogue and internet retailing. Under the agreements, our subsidiary,

Gateway Multichannel Retail (India) Limited which is a 51:49 joint venture between Shopper’s Stop Limited & Hypercity Retail
(India) Ltd., is to operate the stores with services from Home Retail Group (India) Limited a wholly owned company of Home Retail
Group plc. The agreements also provide for the use of the trademarks of Argos and Hypercity by Gateway Multichannel Retail
(India) Limited.
Nuance Group ( India ) Pvt. Ltd. which is a 50:50 joint venture Company of Shopper’s Stop Limited and The Nuance Group AG, has during
the year under review opened 4 outlets at Hyderabad international airport.
Strengths :
• First Citizens: Our First citizen members have been a driving force behind the growth of the Company. Your company had over
10,13,000 First Citizen members as on 31st March, 2008. Your company believes that it’s First Citizens will continue to drive it’s
growth by increased average expenditure in our stores which will be aided by targetted promotional activities.
• Strong focus on Systems & Processes: We have a strong focus on systems and processes. We have been able to capture our
learnings over the years and use them to create Standard Operating Procedures (‘SOPs’) for each of our activities, right from planning
and setting up of new stores to their day to day operations. Our SOPs are available on our Intranet, which helps our employees to
access them whenever required helping us achieve consistency in our decision making process across the chain. We also have a
Manual of Authority, outlining the framework of financial and legal decision making authority at all levels in our Company, right up to
the Customer Care Associate & MD and the Customer Care Associate & CEO
• Strong distribution and logistics network and supply chain: We have created a strong distribution and logistics network, with our four
Distribution Centers covering more than 300,000 square feet handling over 400,000 SKUs per year, and working 24x7.
• Enhancing our human capital : We periodically assess our CCAs across all levels through assessment centers to identify competency
gaps and use development inputs (i.e. training, job rotation etc.) to bridge them. We benchmark our compensation and benefits
through consultants, with the best in the industry to pay our associates accordingly.
• Strong understanding of the real estate business: We benefit from our Promoters’ association with the real estate business and their
relationships with developers, which have helped us acquire preferred properties at competitive rates.
• Shopping Experience : Your Company pioneered the departmental store format in the Indian market when the Indian consumer was
deprived of choice. Customers were drawn by the shopping experience. This is the differentiation that your Company continues to
bank on. Price is not essentially a differentiator for your Company, shopping experience is. Your Company imparts special training to
its employees to ensure that service is not compromised on. With continued focus on service your Company’s stores continue to
post increasing footfalls and conversion rates despite the mushrooming of shopping malls, hypermarkets and specialty stores.
• Management Strength : Your Company has a strong and well-established management team, headed by BS Nagesh, Managing
Director. We believe that the CEOs of each business under the guidance of the MD will be the key to successful execution and
expansion, and strong business growth.
Risks and Concerns :

• Execution : We believe the key risk to our growth is execution risk. Your Company has a strong execution team and we believe it has
the capability to execute varied retail formats.
• Employee retention : Modern retail is a new industry in India, which is only now gaining growth momentum because of the entry of
new companies. Competition for reasonably experienced personnel has led to poaching between retailers. Your Company has lost
some management personnel in the past year and has tried to stem the rise of attrition at the front end. Your Company believes that
this problem will persist until the industry reaches a steady growth phase.
• Delay in store delivery : Majority of the new stores planned are in malls and any delays in the construction of the malls will delay your
company’s retail expansion plan.
• High retail lease rentals:Rent is one of the largest components in a retail business’ fixed costs, and the case is no different for your
Company. Strong economic growth in the past three years in India has led to a boom in real estate prices and with it, an increase in
retail rentals.
• Store renovations : In it’s constant attempt to deliver “Nothing, But the Best” to it’s customers your Company needs to renovate it’s
older stores. These renovations have a substantial impact on cash flows. Renovated stores also go through a gestation cycle before
they ramp up to original performance levels.

• Government levies : Retail is currently not viewed as an industry in India. Hence there are certain levies 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. Chief amongst these
levies is Service Tax on lease rentals.
Opportunities :
• Geographical reach : Your company continues to increase its Pan-India footprint. The Company has plans to increase the number of
departmental stores to 41 in the next 3 years. In addition the company will also continue to expand its various other formats.
• Hypercity – An entry into mixed retail : Your Company has entered the hypermarket segment, which is a high growth segment by
acquiring a 19% stake in Hypercity. We believe that the scope for hypermarkets in India is immense. The store run by Hypercity has
shown very impressive performance in the year gone by.
• Format diversification : Your Company, in it’s constant endeavor to capture wallet share,has diversified into multiple formats viz.
HomeStop which retails hard and soft furnishings, Crossword for books, music and stationery, airport retailing by tying up with The
Nuance Group AG of Switzerland, and F&B formats comprising Brio and Desi Cafe, and Arcelia, which retails high end non apparel
and accessories for ladies.
• Preferred partner for foreign players : Your Company believes that by virtue of it’s presence across all lifestyle categories in the
departmental format, it’s strong brand value and it’s presence in the books and music segment, it is best placed to bring in
international brands into the country, there by enriching the product bouquet for it’s customers and in turn increasing opportunities
for product diversification and profit enhancement.
Threats :
• Threat of new entrants : With India becoming an attractive retail market and the gradual increase in foreign participation in the
sector, your Company expects many new entrants thus sharpening competition.
• Competitive rivalry in the industry : There is intense rivalry among leading national retailers for new locations and quality real estate.
• Economic slowdown : Retail is the “last mile” and the impact of economic slowdown will be see a direct manifestation in lowered
consumer spend.
Customer Entry :
The opening of new stores coupled with attractive advertising enabled the Company to attract higher number of customers in new as
well as existing stores. Retailers measure entry as footfalls, which is the number of people entering the stores. This is computed through
manual count in all stores during trading hours.
Customer Entry
30
25.5
25
%
R 29
CAG 19.9
Customer entry (in mn.)
20 18.3
14.6
15
12.2
10
7.1
0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year
(Source: Company MIS)

Conversion Ratio :
Conversion is the ratio of the number of transactions (Cash Memo) versus the total customer entry into the stores. Tracking conversion
helps the retailer understand the productivity of his front-end store employees and the attractiveness of the Merchandise and services.
Consequent to recent stores being part of malls, the customer entry has increased but the conversion ratio has dropped. However in
absolute numbers customers converted have shown growth in 2 years.
Conversion Ratio
Conversion Ratio
40%
34%
35%
30%
27% 27% 27%
26%
25%
Conversion Ratio (%)
25%
20%
15%
10%
5%
0%
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year
(Source : Company MIS)
Sales :
Gross Sales both at chain level and for Like-to-Like stores showed an improvement as compared to last year. The growth was 34% in
gross retail turnover. The sales per sq.ft. have been computed on built-up area.
Sales (like-to-like growth%) Sales Per Square Feet

10500
25
8671
21 9000
7973
Sales Per Square Feet (in Rs.)
20 7576
Sales (like-to-like growth %)
17 7500 6898 6903

6238
15 14 6000
12
4500
10 9.1 9.1
3000
5 1500
0
0 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year
Year
(Source: Company MIS) (Source: Company MIS)

Apparel :
The Apparel contribution to total sales of the company was 58.6% in 2007-08 as compared to 58.9% in 2006-07. There has been growth
in Non-Apparel segment which has resulted in Non-Apparel sales percentage growing. This is primarily due to customer buying life style
products.
Non-Apparel :
This category includes Cosmetics, Personal Accessories, Jewellery, Leather goods, Home Wares, Electronics, Books and Music. These
lifestyle products have high aspiration value, and as the consuming class increases, there will be a big surge in the demand for this
category. The Non-Apparel contribution to total sales of the Company was 41.40% in 2007-08.
Sales Mix
Non-Apparels Apparels
100%
29.9 % 32.4 % 35.3 % 39.0 % 41.1% 41.4 %

80%
Sales Mix (%)
60%
70.1 % 67.6 % 64.7 % 61.0 % 58.9 % 58.6 %

40%
20%
0%
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year
Private Label & Private Brands :

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. The contribution of private label has decreased to 20.1% of sales from 20.6% last year and private label sales
have increased by 28%. The exclusive licensing arrangement with Austin Reed UK to retail men’s & women’s wear has posted a healthy
growth. As a part of its strategy to provide a wide range of merchandise to customers, your Company aims to fill in the gaps in the
national brand offering through its private labels & exclusive arrangements with private & international brands.
Average Selling Price (ASP) :

Average Selling Price is the Gross Retail Sales divided by the number of units sold. Tracking ASP helps the retailer to align the offering as
per the customer segment as well as improve the productivity of the floor space.

Average Selling Price

800
750 744
Average Selling Price (Rs.)
700 704
650
647
600 605
591
550
535
500
450
400
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year
Transaction Size (Rs.) :

Transaction size represents the amount spent by each customer on his buying. This is computed by the total sales divided by the number
of cash memos.
Transaction Size
2100
1800 1721
1562
1500 1366
Transaction Size (Rs.)
1280 1258 1278

1200
900
600
300
0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year
Merchandise Purchase :
Your company’s ability to present on the shelves correct merchandise assortments in the right mix, style, colour & fashion is one of its
most critical success factors. A team of Buyers & Merchandisers continuously ensure that the pricing strategy and value proposition are
completely in tune with the customers’ expectations. We regularly monitor sales trends to optimize inventory levels.
Our well established systems and processes in Buying & Merchandising & Logistics enables us to efficiently manage the flow of inventory
to stores, provide prompt replenishments and manage pricing.
Your company believes in a broad distribution of risk with no high dependency on any single supplier and has a diversified supplier base.
Suppliers are selected after evaluation based on fairly stringent parameters which ensure the quality & reliability of supply. Alternate
distribution channels for inventory have also been put in place as a contingency, should the need arise.

Supplier Risks :
Our broadly varied offering necessitates alliances with a large number of suppliers from various business sectors. In order to mitigate the
risk involved, we enter into arrangements with vendors in various business formats such as Outrights Buy/Sale or return, Consignment &
Concessionaire/Conducting arrangement.
Shrinkage :
Shrinkage in the retail business is defined as the loss in inventory through a combination of shop lifting, pilferage, and errors in documentation
and transaction processing that go unnoticed. We have focus on inventory control and have set up a separate department called profit
enhancement, 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. The Profit enhancement department, 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 0.47%
of the Turnover and our endeavour will always be to lower this ratio through proper monitoring and continuously reviewing Inventory
management processes and systems.
Shrinkage
0.70%
0.65%
Shrinkage (as a % of Inventory)
0.60%
0.54%
0.55%
0.50%
0.46% 0.47%
0.45%
0.40% 0.41% 0.41% 0.41%
0.35%
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year
Sustaining high Gross Margin :

The gross margin has shown improvement over last 4 years and has increased to 32.0% from 31.4% as compared to the last year. The
Company believes that an increasing share of revenue from private labels, improved sales mix with higher contribution from lifestyle
products (i.e. watches, leather, jewellery, perfumes and cosmetics), higher proportion of bought merchandise and shrinkage control have
helped improve gross margins. Vendor management as also sourcing ability has improved with scale and would accrue more economies
and higher gross margins going forward.
Operating Profit :
Operating Profit has decreased by 17% to Rs.650 mn from Rs. 787 mn in the previous year. The Operating Profit Margin has degrown to
5.5% from 8.9% due to five new stores opened during the year, introduction of new formats of business and provision for service tax on
lease rentals.

Operating Profit :
EBIDTA
900
8.9%
800
700 5.5%
EBIDTA (Rs. in millions)
600 8.5%
500
787
400
6.7%
650
300
6.1% 566
6.5%
200 336
196 225
100
0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year
Operating Profit % to Gross Retail Sales
Interest :
Interest cost has increased from Rs. 44.0 mn to Rs.112.35 mn. The increase is primarily due to increase in borrowings in the current
financial year. Also interest income decreased from Rs. 91 million to Rs. 69 million due to utilisation of IPO funds during the year.
Net Profit :
The Net Profit of the company amounted to Rs. 69.67 mn, which is a decrease by 73% over the last year due to reduction in operating
margins and increase in interest and depreciation charges.
Dividend :
The Company has proposed a dividend of 15% amounting to Rs. 61.17 mn (Including Corporate Dividend Tax).
Inventory :
The inventory as at the end of the current year is Rs. 1,699 mn as against Rs.1,152 mn last year. Inventory holding period is 112 days
during the current fiscal against 97 days last year. The inventory has been valued at lower of cost and net realisable value.
Liquidity :
The growth of the company has been financed largely through cash generated from operations and IPO proceeds. The cash generated from
operations was Rs. 341.52 mn (excluding payment of long term lease deposit of Rs. 199.66 mn) and cash flow from financing activities
was Rs. 430.83 mn.
Productivity/Operating efficiency parameters :

We look at our Gross Margin with reference to our Space, Inventory and Labour to monitor our efficiency with the help of 3 indicators i.e.
Gross Margin on Inventory (GMROI), Gross Margin Return on Floor Space (GMROF) and Gross Margin Return on Labour (GMROL).
GMROI helps to optimize inventory levels, GMROF helps to maximize the cash margins and GMROL helps to increase labour
productivity.

Gross Margin Return On Inventory
GMROI
GMROI
2.9
2.82
2.8 2.75
2.7
2.6
GMROI (Rs. Inventory)
2.5
2.41 2.41
2.4 2.35
2.3 2.23
2.2
2.1
2.0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year
Gross Margin Return On Floor Space

GMROF
GMROF
2900
2700 2632
GMROF (Rs. per unit of retail space)
2520
2500
2353
2330
2300
2100
2000
1910
1900
1700
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year

Gross Margin Return On Labour

GMROL
GMROL
1100000
1,046,768 1,032,609 1,031,557
1000000
899,045
GMROL (Rs. per employee)
900000
800000
700000
636,690
676,509
600000
500000
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year
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. And to evaluate this satisfaction and expectation, your company has appointed CSMM (Customer Satisfaction Measurement and
Management) a part of IMRB (Indian Marketing and Research Bureau) to do an impartial evaluation of our relationship with various
stakeholders. This helps your organization understand the expectations of various business partners, current strengths and concern areas
thereby help set a clear roadmap for improvement and better performance. This was the fourth year of such evaluation. Our PSI scores
for the four years are as below
Year 2004 2005 2006 2007

Scores 4.03 3.98 3.80 4.00
Partnership for Progress :

Partnership for Progress (PFP) is a vendor meet which your company conducts annually. During this event, your company gets and gives
opportunity to the top retail vendors / brands to discuss and strengthen the association apart from exploring various business possibilities
with each other. The summit also becomes a platform for your company as well as its partners to share their experiences with each other
in the last one year. Your company also invites well known international and national speakers to share learning and experience which is
closely related to Retail, Brand, Customer, Logistics, etc.
Your company also recognizes the performance of top partners who are rewarded with “SHOPPERS STOP PINNACLE AWARDS” during
this summit.
This is a two days of outbound activity with more than 110 vendor partners attending the summit.
Human Resources :
The Indian retail industry is growing by leaps and bounds and is poised for an unprecedented growth. Your Company is gearing up to the
ride the growth wave and we believe that our people will fuel this exponential growth in the future.
We continue to increasingly focus on internal growth and development of our associates, cutting across levels and functions, through
focused developmental efforts and growth opportunities. For the year under review, we have provided 66 hours of training per associate
and 320 hours of international training. We have been able to employ innovative strategies to attract talent from other industries as well
as from renowned educational institutions. 104 associates have participated in the Company’s growth through ESOPs.
Your Company has a well-established system of competency mapping and assessment centre deployment that ensures a fair and
transparent vehicle for providing growth opportunities to its associates. In the last financial year, 35 assessment centres were conducted
covering 360 associates across various levels.
We have been able to successfully deploy initiatives to enhance associate satisfaction levels, which are reflected in the increase in our
Associate Satisfaction scores for the fourth consecutive year in a row.
ASI or Associate Satisfaction Index computed through an annual online survey for all our associates, tracks the satisfaction levels of
associates on various work experience, identifies the current drivers of employee loyalty, tracks improvement over last year and identifies
the current key strengths and weaknesses to take necessary action.
Our ASI scores for five years are as below:
Year 2004 2005 2006 2007 2008

Overall Loyalty Index 4.00 4.03 4.11 4.05 4.01
Overall Loyalty index is a tool to measure Employee Experiences, which impact employee attitudes which in turn leads to employee loyalty
resulting in business enhancing employee behaviours.
Marketing :
Party On, our theme for the December promotion helped the brand create an exclusive position in the market at a time when everyone
else concentrates on Christmas and Santa Claus. The “Party On” promotion was created from a customer insight that most people
associate the word “party time” very closely to the month of December. Creating a “party spirit” at the store through live bands, Disc
Jockeys playing at the stores, bartending classes and Salsa dancing workshops leant a very festive spirit at the stores.
Retaining the positioning of ‘Shopping. And beyond’, the brand campaign reinforced the fashion leader imagery of the brand. However,
this time the brand campaign focused on the insight that “consumers don’t just buy products, there are emotions attached to these”. The
campaign explores the feelings and creates a stronger emotional connect with the consumer.
Further, we also had local festivals across regions. Some major local festivals that we conducted were the ‘Shoppers’ Stop Sananda Pujor
Bazar’ festival in Kolkata during the Durga Puja season, Akshay Trithiya and Onam in South and Sankranthi and Dhanteras in North.
Customer Satisfaction :
At Shoppers Stop we strive to provide our customers with the best overall experience of shopping with us. To measure the customer
experience we conduct customer satisfaction surveys to evaluated a range of parameters including merchandise range and quality, store
environment, staff, transaction efficiency, loyalty programme, schemes and promotions to name a few and undertake improvements in
various areas.
We also include select competition stores in our surveys in order to measure experience in our stores as compared to competition.
Overall Customer satisfaction Index :
August 2004 January 2005 August 2005 January 2006 August 2006 November 2007
63 61 63 60 63 63
Your Company has pioneered India’s first retail loyalty program - “First Citizens”. The First Citizens base grew from 781,000 to 10,13,000
over customers in this year. During the current year, the First Citizens contributed 65% of the Company’s annual sales. The First Citizen
programme has 3 tiers - Classic Moments (entry level), Silver Edge and Golden Glow. Members fall into the various tiers on the basis of
their spends with us.
First Citizens also earn differential reward basis on their current tier of membership. First Citizens receive :
• Reward points on all their spends. Reward points can be redeemed for a wide variety of merchandise at your Company.
• Exclusive schemes, benefits and promotions.
• Extended and exclusive shopping hours - specially during the festive season. Special previews before the sale periods.
• Invitations to exclusive events - both in-store as well as those organised outside the stores.
• Home delivery of altered merchandise.
• Exclusive First Citizens lounge at select stores to relax after hectic shopping.
First Citizens always stay updated with all details pertaining to their membership as well as the best of offers and privileges available,
through a unique service launched last year - First Citizens First Through this service First Citizens get all the information that they want
on their mobile phones simply by sending an SMS.
In the coming year your Company proposes to announce some ground breaking programs for it’s First Citizens which will not only enhance
front end sales but will also strengthen customer loyalty for the company.
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.
This enables First Citizens to add on a credit line to their purchases. They also have the added advantage of being able to choose from
amongst various attractive financing options, cash back schemes, EMI schemes etc. for buying at your Company’s stores. For customers
who are averse to credit, there is an option of activating a debit card. As on 31 March, 2008, the number of members in the co-branded
card programme crossed 2,30,000.
Risk Management and Internal Control :

Effective governance consists of competent management; implementation of standard policies and processes; maintenance of an
appropriate audit program with internal control environment effective risk monitoring and management information systems.
The Company has an integrated approach for management of risk and has formulated the framework for regulatory and risk management,
standardizing the definition of internal controls.
It also provides a framework for risk management and regulatory compliance, which requires risk assessments and related policies,
a control-based environment and activities, information and communication procedures, and a monitoring mechanism for the control
environment.
The Company has a sound system of Internal Controls for financial reporting of various transactions, efficiency of operations and
compliance with relevant laws and regulations commensurate with its size and nature of business. The Company has a well-defined
system of management reporting and periodic review of businesses to ensure timely decision-making.
These internal control procedures ensure the following:
• Efficient use and protection of resources.
• Compliance with policies, procedures and statutes.
• Accuracy and promptness of financial reports.
The management information system (MIS) forms an integral part of the Company’s control mechanism. All operating parameters
are monitored and controlled, with material deviations from the annual planning and budgeting and business outlook including capital
expenditure reported to the Board on quarterly basis.
Reports of internal auditors are reviewed by the Audit Committee, and corrective measures are carried out towards further improvement
in systems and procedures and compliance with Internal Control System. 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.
Technology Initiatives :
Point of Sale (PoS) system upgrade

We have upgraded the Point of Sale application across the chain to the latest version of JDA’s WinDSS application.
Credit Card processing system (Plutus)

We have deployed Plutus a software that integrates with the PoS system so that cashiering transactions can be done much faster which
reduces the customer wait time. The application also reduces the data transfer costs.

E-learning System (Learning Zone) :

Shoppers Stop has deployed Learning Zone, its own E-learning portal. This application is expected to drastically reduce time required to
train employees across all functions of the organisation.
B2B Application :
Shoppers Stop has implemented the next generation B2B portal for its partners and vendors. Through this portal, partners can not only
get access to relevant information like inventory, sales figures, etc., the application also allows SSL and its partners access to data from
each others’ systems through an EDI format.
Disaster Recovery Plan (DRP) :

Shoppers Stop as part of its initiative towards ensuring business continuity in all circumstances has created a Disaster Recovery (DR)
site in a separate sesmic zone outside Mumbai. Data from our core ERP is being replicated in the DR site. This would help the business
to recover with minimal impact, should some disaster strike the primary data centre. The data thus replicated has also been tested for
accuracy by business users.
Mailing System :
We have upgraded our mailing system to Exchange 2007 and deployed Microsoft Live Communications Server 2007. This move is
expected to give the organisation the latest technologies while reducing the cost of communicating.
Corporate Governance :
Your Company has taken steps to ensure that the Corporate Governance guidelines are adopted and fully complied with. The detailed
Corporate Governance Report is attached with this report.
Outlook of the Company :

Our vision is “To be a global retailer in India and maintain our No. 1 position in the Department Store Category”.
Our Mission is to provide the customer with “Nothing but the Best” in terms of Products and Services.
It will be our constant endeavour to continuously improve the benefits and offerings to our loyal customers -First Citizens, thereby taking
the programme to new heights.
We will work towards making this Company the Best Place to Work, Shop, Trade & Invest in.
We commit ourselves in delivering higher level of sensory experience, touching the Heart and Mind of our Consumers.
We shall deliver this Experience through Fashionable Merchandise, Great Store Layout and Ambience, Associates focused on Service,
and Unmatched Events
Cautionary Statement :
The statement made in this section describes the Company’s objectives, projections, expectations and estimations which may be
’forward looking statements’ within the meaning of applicable securities laws and regulations. The annual results can differ materially
from those expressed or implied, depending on the economic and climatic conditions, Government policies and other incidental factors
which are beyond the control of the Company.

Auditors' Certificate on Corporate Governance Shopper's Stop Ltd.
To the Members of Shopper's Stop Limited
(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 2008 as stipulated in Clause 49 of the listing agreement of the Company with the stock exchanges in India.
(2) The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to
procedures and implementation thereof, adopted by the company for ensuring compliance of the conditions of Corporate Governance.
It is neither an audit nor an expression of opinion on the financial statements of the Company.
(3) In our opinion, and to the best of our information and according to the explanations given to us, we certify that the company has
complied with the conditions of Corporate Governance as stipulated in the abovementioned Listing Agreement.
(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.
For Deloitte Haskins & Sells,

Chartered Accountants
P. B. Pardiwalla
Partner
Membership No. 40005
Place: Mumbai
Date: 25 April, 2008

Corporate Governance Report Shopper's Stop Ltd.
Company’s philosophy on Code of Governance

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. 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.
• 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.
• To ensure that the Company follows the globally recognised corporate governance practices.
We have made conscious efforts to institutionalize Corporate Governance practice and we believe that it shall go beyond adherence to
the regulatory framework. Our corporate structure, business and disclosure practices have been aligned to our Corporate Governance
Philosophy. We will continuously endeavour to take forward the best practices to enhance stakeholder’s value.
Board of Directors
The Board of Directors comprises of nine members including two executive directors and seven non-executive directors. The Company
has a non-executive Chairman and the number of independent directors is more than one third of the total number of Directors. The
independent directors on the Board are professionals, technocrats and retail experts, who are senior, competent and highly respected
persons from their respective fields and provide strategic direction and thrust to the operation of the Company.
The key decisions are taken after detailed deliberations and discussions by the Board. 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
inter-alia specified under clause 49 Annexure - IA of the Listing Agreement.
None of the Directors on the Board is a Member of more than ten Committees and Chairman of more than five Committees (as specified
in Clause 49), across all the companies in which he is a Director.
The composition of the Board of Directors, 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 No. of other Directorships & Committee
particulars Memberships / Chairmanships
Board Last Directorships1 Committee Committee
Meetings AGM Membership1&2 Chairmanship1 & 2
Mr. Chandru L. Promoter & Non- Chairman 5 Yes 4 1 0

Raheja Executive Director
Mr. Ravi Raheja Promoter & Non- Director 5 Yes 5 1 1
Executive Director
Mr. Neel Raheja Promoter & Non- Director 4 Yes 5 3 0
Executive Director
Mr. B. S. Nagesh Executive Director Managing 5 Yes 6 0 1
Director
Mr. Gulu L. Independent & Non- Director 4 Yes 8 2 0
Mirchandani Executive Director
Mr. Shahzaad Independent & Non- Director 4 No 11 4 3
Dalal Executive Director
Prof. Nitin Independent & Non- Director 4 Yes 0 0 0
Sanghavi Executive Director
Mr. Deepak Independent & Non- Director 5 Yes 4 1 1
Ghaisas Executive Director
Mr. Govind Executive Director Chief 5 Yes 3 0 0
Shrikhande Executive
Officer

Notes:
1. The other Directorships and Chairmanships/Memberships of Committees held in foreign companies, private limited companies and
companies incorporated u/s 25 of the Companies Act, 1956 are excluded.
2. The Chairmanship and the membership of Audit Committee and Shareholders’ Grievance Committee alone are considered.
3. Mr. Ravi Raheja and Mr. Neel Raheja are sons of Mr. Chandru. L. Raheja. No other director is related to any other director
of the Company.
During the year under review, the Board of Directors met five times i.e on 28 April 2007, 28 July 2007, 27 October 2007, 28 January 2008
and 25 March 2008. The Maximum interval between any two Meetings during this period does not exceed four months.
Dates for the Board Meetings for the ensuing year are decided well in advance and communicated to the Directors. The Agenda along
with the explanatory notes are sent in advance to the Directors. Additional meetings of the Board are held when deemed necessary by
the Board.
The Company has adopted the Code of Conduct for all Board members and managerial personnel of the Company. This Code of Conduct
has been posted on the Company’s website. The Company has received affirmations from them regarding compliance of the provisions
of the Code during the year under review. A declaration signed by the Chief Executive Officer of the Company to this effect is attached
with the Report.
Audit Committee
The Company has constituted an Audit Committee in the year 2001. The role, powers and functions of the Audit committee are as per
guidelines stated in the Clause 49 of the Listing Agreements with the Stock Exchanges read with Section 292A of the Companies Act,
1956. The terms of reference of the Audit Committee inter-alia are broadly as under:
1. To oversee the Company’s financial reporting process and the disclosure of its financial information, to ensure that the financial
statement is correct, sufficient and credible.
2. To recommend to the Board, the appointment and reappointment of Statutory Auditors, fixation of audit fees and also approval for
payment of any other services.
3. To review with the management, the annual financial statements before submission to the board for approval, 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, 1956.
(b) Changes, if any, in accounting policies and practices and reasons for the same.
(c) Major accounting entries involving estimates based on the exercise of judgement by management.
(d) Significant adjustments made in the financial statements arising out of audit findings.
(e) Compliance with listing and other legal requirements relating to financial statements.
(f) Disclosure of related party transactions.
(g) Qualifications in the draft audit report.
4. To review with the management, the quarterly financial statements before submission to the Board for approval.
5. To review with the management, performance of statutory and internal auditors and adequacy of the internal control systems.
6. To review the status on utlisation of IPO proceeds.
7. To review the adequacy of internal audit function, including the structure of the internal audit department, staffing of the department,
reporting structure coverage and frequency of internal audit.
8. Discussion with internal auditors any significant findings and follow up there on.
9. 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. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion
to ascertain any area of concern.
11. To review the functioning of the Whistle Blower mechanism.

The Audit Committee comprises of four Non-Executive Directors. The members of the Committee possess sound knowledge of finance
& accounts. The Audit Committee invites such of the executives, as it considers appropriate to be present at the meetings of the
committee. The Managing Director, Executive Director & CEO, Group Chief Financial Officer, Company Secretary, representatives of the
internal auditors and statutory auditors are also present at the Audit Committee Meetings as invitees.
During the year under review, the Committee met four times on 28 April 2007, 28 July 2007, 27 October 2007 and 28 January 2008.
The details of the Composition of the Committee and attendance at its meetings are set out in the following table:
Name of Member Status Category No. of meetings attended

Mr. Deepak Ghaisas Chairman Independent Director 4
Mr. Ravi C. Raheja Member Non Independent Director 4
Mr. Shahzaad Dalal Member Independent Director 3
Prof. Nitin Sanghavi Member Independent Director 4
Mr. Prashant Mehta, Vice President - Legal and Company Secretary of the Company acts as the Secretary of the Committee.
Compensation/Remuneration Committee
The Company has constituted Compensation/Remuneration Committee in the year 2001. The scope of the activities of the Compensation/
Remuneration Committee is to recommend the remuneration payable to the Managing Director and Executive Director of the Company,
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.
During the year 2007-08, the Committee met nine times i.e. on 28 April 2007, 21 May 2007, 19 June 2007, 28 July 2007, 23 August
2007, 4 October 2007, 27 October 2007, 28 January 2008 and 27 March 2008.
Name of Member Status No. of meetings attended

Mr. G. L. Mirchandani Chairman 8
Mr. Ravi C. Raheja Member 8
Mr. Shahzaad Dalal Member 8
Prof. Nitin Sanghavi Member 5
The Company pays sitting Fees of Rs.20,000/- to its Non-Executive Directors for attending each Board of Directors meeting. The
commission pursuant to the approval accorded by members is being paid to the Non-Executive Directors on the basis of the meetings
held during the year and their contribution from time to time. The Promoter Directors do not draw any commission.
Details of compensation paid to Non-Executive Directors during the year are as under:
Name of Directors Commission Sitting Fees Total (Rs.)

Mr. Chandru L. Raheja 0 100,000 100,000
Mr. Ravi C. Raheja 0 100,000 100,000
Mr. Neel C. Raheja 0 80,000 80,000
Mr. Gulu L. Mirchandani 150,000 80,000 230,000
Mr. Shahzaad Dalal 150,000 80,000 230,000
Prof. Nitin Sanghavi 150,000 80,000 230,000
Mr. Deepak Ghaisas 150,000 100,000 250,000
Total 600,000 620,000 12,20,000

Details of remuneration paid to Mr. B. S. Nagesh, Managing Director and Mr. Govind Shrikhande, Executive Director and CEO, during the
year is as under:
Name of Directors Salary and Bonus Perquisites Contribution to Provident Total

and Other Funds (Rs.)
Mr. B. S. Nagesh 45,94,741 205,259 921,600 57,21,600
Mr. Govind Shrikhande 43,69,504 430,496 720,000 55,20,000
The Company is in the process of making applications to the Central Government for payment of remuneration made to its executive
directors in excess of the limits laid down in Sections 198 and 309 of the Companies Act, 1956, read with Schedule XIII of the Act,
Rs.27.63 million, till such time as sanction is received from the Central Government, the excess amount paid is considered as recoverable
from them.
Details of grant of stock options to and exercise of stock options by Mr. B. S. Nagesh, Managing Director under the following ESOP
Schemes is as under:
Scheme Date of Options Options vested Grant price per Fair value on the Vesting period
Grant Granted and exercised equity share (Rs.) date of grant (Rs.)
ESOP-III 01.05.04 22,560 22,560 150 181 3 years
ESOP-IV 01.02.05 13,980 8,388 240 248 39 months
ESOP-V-1 28.12.05 11,353 3,405 384 429 3 years
ESOP-V-2 29.07.06 24,168 0 540 471 3 years
ESOP-V-3 29.07.06 50,000 0 540 471 3 years
Details of grant of stock options to and exercise of stock options by Mr. Govind Shrikhande, Executive Director and CEO under the
following ESOP Schemes is as under:
Scheme Date of Options Options vested Grant price per Fair value on the Vesting period
Grant Granted and exercised equity share (Rs.) date of grant (Rs.)
ESOP-III 01.05.04 9,230 4,615 150 181 3 years
ESOP-IV 01.02.05 7,270 2,181 240 248 39 months
ESOP-V-1 28.12.05 5,306 1,591 384 429 3 years
ESOP-V-2 29.07.06 12,279 0 540 471 3 years
ESOP-V-3 29.07.06 45,000 0 540 471 3 years
ESOP-V-5 23.08.07 1,00,000 0 485 485 5 years
Service Contract, severance fees and notice period

Mr. B. S. Nagesh, Managing Director:
Period of contract is 5 Years w.e.f. 1 April 2005. There is no separate provision for payment of any severance fees.
Mr. Govind Shrikhande, Executive Director and CEO:
Period of contract is 3 Years w.e.f. 29 July 2006. There is no separate provision for payment of any severance fees.
Shareholders’ Investor Grievance and Share Transfer Committee

The Company has constituted the Committee in the year 2004. The Committee looks into redressal of shareholders’ grievances. 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.
During the year 2007-08, the Committee met two times on 5th September 2007 and 31 October 2007.

Name of Member No. of meetings attended

Mr. Ravi C. Raheja 2
Mr. Neel C. Raheja 2
Mr. B.S. Nagesh 2
Mr. Prashant Mehta, Vice President - Legal & Company Secretary of the Company has been designated as the Compliance Officer.
During the year, the Company received 10 Communication/grievances, which were attended and resolved to the satisfaction of the
Shareholders. No grievances were pending at the year end.
Subsidiary Companies
Clause 49 of Corporate Governance defines a ‘material non-listed Indian subsidiary’ as an unlisted subsidiary, incorporated in India, whose
turnover or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively, of the
listed holding company and its subsidiaries in the immediately preceding accounting year. In this regard, the Company does not have any
material non-listed Indian subsidiary.
The Board of Directors of the Company reviews every quarter the financial statements and minutes of Board Meetings of unlisted
subsidiary companies.
General Body Meetings

Details of Annual General Meetings held during last three years:
AGM for Date Time Location Special Resolutions
Financial Year passed thereat
2006-2007 28 July 2007 3.00 p.m. R.D. National College & W.A. Revision in the “objects of the issue” and
Science College, (College consequent utilization of monies raised by
Auditorium), Linking Road, the Company in its Initial Public Offering.
Bandra (West),
Mumbai 400 050.
2005-2006 22 September 2006 9.30 a.m. R.D. National College & W.A. • Appointment of Mr. Govind Shrikhande
Science College, (College as Whole-time Director and designated
Auditorium), Linking Road, as Executive Director and Chief
Bandra (West), Mumbai 400 Executive Officer.
050. • Payment of 1% of the net profits by way
of commission to the Non-Executive
Directors.
• Revision in the Employee Stock Option
Scheme (ESOP 2005) of the Company.
• Revision in maximum remuneration of
Mr. B S Nagesh, Managing Director of
the company
2004-2005 10 May 2005 10.30 a.m. Eureka Towers, No special resolutions have been passed.
B-Wing, 9th Floor, Mindspace,
Link Road,
Malad (West),
Mumbai - 400 064.

Postal Ballot
For the financial year ended 31 March, 2008, there has been no ordinary or special resolution passed by the Company that required
approval of members by way of postal ballot under the provisions of Section 192A of the Companies Act, 1956.
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. The
transactions between the Company and the related parties are disclosed in Notes to the Accounts in the Annual Report.
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,
1956.
Board Disclosures – Risk Management

The Company has laid down the requisite procedures to inform the Board Members about the risk assessment and minimization
procedures.
Details of non compliance with regard to Capital Market

The Equity Shares of the Company have been listed with Stock Exchanges with effect from 23 May 2005. Since then, there have been
no instances of non compliances by the Company and no penalties and / or strictures are imposed on the Company by Stock Exchanges
or SEBI or any statutory authorities on any matters relating to capital markets.
Code of conduct for Prevention of Insider Trading Practices

In compliance with the SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended, the Company has formulated, adopted and
implemented “Shopper’s Stop Code of conduct for Prevention of Insider Trading” in the shares of the Company.
Whistle Blower Policy

The Whistle Blower Policy aims to encourage all employees to inform the Company regarding any kind of misuse of Company property,
mismanagement or wrongful conduct prevailing in the Company and no personnel has been denied access thereto. 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.
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.
Management Discussion and Analysis

Management Discussion and Analysis is given as a separate section in the Annual Report.
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.
EDIFAR Filing
In terms of Clause 51 of the Listing Agreement, in respect of ‘Electronic Data Information Filing and Retrieval’ (EDIFAR) system, the
Quarterly Results, Shareholding Pattern, Annual Report, and the requisite disclosures are posted on the Website http://www.sebiedifar.
nic.in expeditiously.
Means of Communication
• The quarterly results are published within 48 hours of the Board Meeting, in prominent daily newspapers viz. Economic Times and
Maharashtra Times and the same are also posted on the Company’s website immediately. At the end of each quarter, the Company
does a Conference call with the analysts in order to clarify their doubts and queries.
• The domain name of the Company’s website is www.shoppersstop.com and upto date financial results, official press releases and
the other information about the Company and its businesses are available on the website.

• 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.
General Shareholders Information

(1) Annual General Meeting:
Date and Time : 29 July 2008 at 2.30 p.m
Venue : R.D. National College & W.A.
Science College, (College Auditorium),
Linking Road, Bandra (West),
Mumbai 400 050.
(2) Financial Calendar : 1 April to 31 March
(3) Date of Book Closure : 24 July 2008 to 29 July 2008
(Both days inclusive).
(4) Dividend payment date : Within 5 days of declaration
(5) Listing on the Stock Exchanges : 1. Bombay Stock Exchange Limited
Phiroze Jeejeebhoy Towers,
Dalal Street, Mumbai - 400 001.
2. National Stock Exchange of India Ltd.
Exchange Plaza, Bandra-Kurla Complex,
Bandra (East), Mumbai 400 051.
The requisite Listing Fees for the financial year 2008-2009 has been paid to both the above Stock Exchanges where the equity shares of
the Company are listed.
(6) Stock Code
Bombay Stock Exchange Limited : 532638
National Stock Exchange of India Ltd. : SHOPERSTOP (Symbol)
(7) Stock Market Data for the period – 1 April, 2007 to 31 March, 2008
Share price performance in comparison on BSE:
Month (2007-08) BSE Sensex No. of Shares

transacted
High (Rs.) Low (Rs.) High Low
April 702.80 590.00 14383.72 12425.52 43,799

May 690.00 585.00 14576.37 13554.34 102,180
June 661.45 555.00 14683.36 13946.99 58,522
July 620.00 540.00 15868.85 14638.88 119,298
August 610.00 473.60 15542.40 13779.88 34,453
September 625.00 507.25 17361.47 15323.05 23,435
October 582.55 441.25 20238.16 17144.58 90,517
November 609.30 488.00 20204.21 18182.83 37,315
December 574.00 462.30 20498.11 18886.40 228,274
January 628.90 350.00 21206.77 15332.42 141,706
February 525.00 375.00 18895.34 16457.74 150,596
March 505.00 370.00 17227.56 14677.24 39,082

Shopper’s Stop Price Movement Chart – BSE

700 20500
19000
650
17500
Amount (Rs.) 600
16000
Sensex
550
14500
500
13000
450
11500
400 10000
Apr May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.
Financial Year 2007-08 Shopper’s Stop
Sensex
Share price performance in comparison on NSE
Month (2007-08) NSE Nifty No. of Shares

transacted
High Low High Low
(Rs.) (Rs.)
April 698.00 605.50 4217.90 3617.00 45,489
May 690.00 571.25 4306.75 3981.15 228,877
June 624.45 571.00 4362.95 4100.80 29,508
July 675.00 537.00 4647.95 4304.00 129,453
August 606.00 457.00 4532.90 4002.20 213,047
September 565.00 502.30 5055.80 4445.55 52,695
October 555.55 442.00 5976.00 5000.95 111,190
November 615.00 473.60 6011.95 5394.35 217,030
December 575.00 460.90 6185.40 5676.70 144,352
January 630.90 334.10 6357.10 4448.50 257,100
February 500.00 361.05 5545.20 4803.60 191,001
March 496.00 368.00 5222.80 4468.55 86,838
Shopper’s Stop Price Movement Chart – NSE

700 8000
7000
650
6000
600
Amount (Rs.)
5000
Nifty
550
4000
500
3000
450
2000
400 1000
Apr May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.
Financial Year 2007-08 Shopper’s Stop
Nifty

(8) Distribution of Shareholding as on 31 March 2008 and 31 March 2007

Shareholding of As on March 31, 2008 As on March 31, 2007
Nominal value Shareholders % to total Shareholders % to total
Rupees Number % to Rupees % to Number % to Rupees % to
total total total total
Upto 5000 8001 97.67 3,097,060 0.89 8,898 97.73 3,488,010 1.00
5001-10000 61 0.75 471,120 0.14 67 0.74 532,920 0.15
10001-20000 28 0.34 397,730 0.11 36 0.40 542,000 0.16
20001-30000 20 0.24 526,740 0.15 23 0.25 578,480 0.17
30001-40000 4 0.05 145,610 0.04 4 0.04 153,630 0.04
40001-50000 7 0.09 311,580 0.09 8 0.09 379,460 0.11
50001-100000 15 0.18 1,168,860 0.34 7 0.08 546,040 0.16
100001 and above 56 0.68 342,504,600 98.24 61 0.67 342,051,800 98.21
Total 8,192 100.00 348,623,300 100.00 9,104 100.00 348,272,340 100.00
Shareholding Pattern
The categories of shareholdings as on 31 March 2008 and 31 March 2007
As on March 31, 2008 As on March 31, 2007

Category No. of % to total No. of % to total
Shares Held Shares Held
Promoters 23,058,602 66.14 23,058,602 66.21
Mutual Funds and UTI 2,790,467 8.00 3,249,021 9.33
Financial Institution 138,050 0.40 138,050 0.40
Foreign Institutional Investors 5,110,349 14.66 4,946,449 14.20
Corporate Bodies 1,675,732 4.81 1,688,309 4.85
Indian Public 2,079,197 5.97 1,730,084 4.97
NRI’s & OCB’s 8,540 0.02 11,393 0.03
– Clearing Members (Transit) 1,391 0.00 5,326 0.01
– Trust 2 0.00 0 0.00
Total 34,862,330 100.00 34,827,234 100.00
Shareholding of Non-Executive and Executive Directors as on 31 March, 2008
Name of Director Status No. of Shares

Mr. Chandru L. Raheja Promoter Director 348,750
Mr. Ravi C. Raheja Promoter Director 550,000
Mr. Neel C. Raheja Promoter Director 575,000
Mr. Gulu L. Mirchandani Director 0
Mr. Shahzaad Dalal Director 1,000
Prof. Nitin Sanghavi Director 0
Mr. Deepak Ghaisas Director 0
Mr. B. S. Nagesh Managing Director 300,744
Mr. Govind Shrikhande Executive Director & CEO 21,591

(9) Registrar and Share Transfer : Karvy Computershare Private Limited

Agent Plot No. 17-24, Vitthal Rao Nagar, Hyderabad - 500 081 (India)
Tel : +91-40 2342 0818
Fax : +91-40 2342 0814
(10) Share Transfer System : The shares of the Company are traded on the Stock Exchanges through the Depository System.
The ISIN allotted to the equity shares of the Company is INE498B01016.
The request received by the Company/RTA for dematerialisation/rematerialisation are disposed
off expeditiously. Share certificates duly endorsed are issued to the shareholders, who opt for the
shares in the physical form.
(11) Dematerialization of shares : The trading in Company’s equity shares is compulsorily in dematerialised mode for all investors.
and liquidity As on date, entire share capital of the Company except 1128 equity shares are being held in the
dematerialized mode.
The shares of the Company are regularly traded at both the Stock Exchanges where they are
listed, which ensure the necessary liquidity to shareholders.
(12) Outstanding GDRs/ADRs/ : The Company has not issued any ADR or GDR or warrants or any convertible instruments, which
Warrants or any Convertible has likely impact on equity share capital.
Instruments
(13) Address for correspondence : Mr. Prashant Mehta
Vice President – Legal & Company Secretary
Eureka Towers, B-Wing, 9th Floor, Mindspace, Link Road, Malad (W), Mumbai - 400 064.
Tel : (022) 66887688
E-mail ID : investor@shoppersstop.co.in
Web Address : www.shoppersstop.com
(14) Store Locations : Western Region
1. 211-D, S. V. Road, Andheri (W), Mumbai - 400 058
2. Krushal Commercial Centre, G. M. Road, Chembur (W),Mumbai - 400 089
3. Suburbia, Old Bandra Talkies, Linking Road, Bandra (West), Mumbai - 400 050
4. Naman Plaza, 41, S.V. Road, Kandivali (W), Mumbai - 400 067
5. Nirmal Lifestyles, L.B.S. Marg, Mulund (W), Mumbai - 400 080
6. Inorbit Mall, Link Road, Malad (W), Mumbai - 400 064
7. Dynamix Mall, JVPD Scheme, Juhu, Mumbai - 400 049
8. Godrej Eternia, B Wing, Shivaji Nagar, Mumbai-Pune Road, Pune - 411005
9. Nucleus Mall, 1 Church Road, Pune - 411 001
10. HomeStop, Inorbit Mall, Link Road, Malad (W), Mumbai - 400 064.
Southern Region
1. Garuda Star Mall, Magrath Road, Ashok Nagar, Bengaluru - 560 025
2. Commerce@Mantri, Bannerghatta Road, Bengaluru - 566 076
3. Plot No. 1-11-251/1, Alladin Mansion, Begumpet, Hyderabad - 500 016
4. No. 2, Harrington Road, Chetpet, Chennai - 600 031
5. HomeStop, Raheja Point No. 17/2, Magrath Road, Bengaluru - 560 025
Northern Region
1. Gaurav Towers 2, Plot No. 2, Indira Palace, Malviya Nagar, Jaipur - 302 017
2. Ansal Plaza, Hudco Palace, Andrews Ganj, Khelgaon Marg, New Delhi - 110 049
3. The Metropolitian Mall, Mehrauli-Gurgaon Road, Gurgaon, Haryana - 122 002
4. Shipra Mall, Shipra Suncity, 9 Vaibhav Khand, Indirapuram, Ghaziabad - 201 012
5. HomeStop, Plot No.A/3, Select City Walk, District Centre, Saket, New Delhi - 110017
6. Fun Republic, Bhikamnagar, Gomti Nagar, Lucknow
7. Eros Mall, Plot no. 10, Shivaji Palace,District Centre, Raja Garden, New Delhi - 110027
8. The Great India Palace, Plot No : 2, Sector 38 - A, New Okhla Industrial Development
Area, District - Gautam Budh Nagar, NOIDA, Uttar Pradesh - 201301
9. Plot No. 2, MGF Metropolitian Saket, District Centre Saket, Sector II, New Delhi - 110017
Eastern Region
1. 10/3, Lala Lajpat Rai Sarani (Elgin Road), Kolkata - 700 020
2. City Centre, DC – 1, Block – 1, Salt Lake, Kolkata - 700 064
3. South City Mall, 375, Prince Ankiar Shah Road, Kolkata - 700 068

Auditors' Report Shopper's Stop Ltd.
To,
The Members of Shopper’s Stop Limited
1. We have audited the attached Balance Sheet of Shopper’s Stop Limited, as at 31 March 2008 and also the Profit and Loss Account
and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of
the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and
5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report that:
(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company, so far as appears from our
examination of those books.
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books
of account.
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.
(e) On the basis of written representations received from the Directors as on 31 March 2008 and taken on record by the Board of
Directors none of the directors are disqualified as on 31 March 2008 from being appointed as a director in terms of clause (g)
of sub-section (1) of Section 274 of the Companies Act, 1956.
(f) Attention is invited to note no. 35 of the financial statements regarding unutilised service tax input credit of Rs. 175.06 million
as at 31 March 2008. These financial statements have been prepared by the management assuming that the company will be
able to utilise the credit in future years and therefore do not include any adjustments in the financial statements that might arise
should the company be unable to utilise the credit.
(g) Subject to our observations in paragraph (f), above, the impact of which on the financial statements cannot be ascertained, in
our opinion and to the best of our information and according to the explanations given to us, the accounts read together with
accounting policies and notes thereon give the information required by the Companies Act, 1956, in the manner so required and
give a true and fair view in conformity with the accounting principles generally accepted in India:
i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2008;
ii. in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and
iii. in the case of the Cash Flow statement, of the Cash Flows for the year ended on that date.

P. B. Pardiwalla
Partner
Place: Mumbai

Annexure to the Auditors' Report Shopper's Stop Ltd.
(Referred to in paragraph 3 of our report of even date)
1. The nature of the Company’s business/activities for the year are such that the requirements of items (i-c), (vi), (viii), (x), (xii), (xiii),
(xiv), (xviii) and (xix) of paragraph 4 of the Order are not applicable to the Company.
2. In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of
fixed assets.
(b) Some of the fixed assets were physically verified during the year by the management in accordance with a programme of
verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the
information and explanation given to us no material discrepancies were noticed on such verification.
3. In respect of its inventories:
(a) As explained to us, inventories were physically verified by the management at reasonable intervals during the year.
(b) In our opinion and according to the information and explanations given to us, 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.
(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical verification.
4. The Company has not taken any loans from parties covered under Section 301 of the Companies Act, 1956. In respect of loans,
secured/unsecured, granted during the year to parties covered in the register maintained under section 301 of the Companies Act
1956, according to the information and explanations given to us:
i. At the year-end, the aggregate outstanding balance of the loans was Rs. 77.92 million. The maximum amount outstanding
during the year was Rs. 330.04 million.
ii. In our opinion, the rate of interest and other terms and conditions of the loan is prima facie not prejudicial to the interests of the
Company.
5. In our opinion and according to the information and explanations given to us, there are adequate internal control systems
commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for
the sale of goods. The nature of the company’s activities is such that there was no sale of services during the year. We have not
observed any continuing failure to correct major weaknesses in such internal controls.
6. In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies Act, 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 into the register, maintained
under the said section have been so entered.
(b) Where each of such transactions (excluding loans reported under paragraph 4 above) is in excess of Rs. 5 lakhs in respect of
any party, we are informed that the nature of transaction is such that there are no comparative prevailing market prices.
7. In our opinion, 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.
8. In respect of its Statutory dues:
i. According to the information and explanations given to us, the Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employee’s State Insurance, Income-tax, Sales-tax, Service tax, Custom duty and any
other material statutory dues with the appropriate authorities during the year.
ii. According to the information and explanations given to us there are no disputed Income Tax , Customs duty, Service Tax and
Cess, which have not been deposited with the relevant authorities.

Annexure to the Auditors' Report Shopper's Stop Ltd.
9. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of
dues to banks.
10. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the
Company for loans taken by its joint venture companies from banks are prima facie not prejudicial to the interests of the Company.
11. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loan
obtained was, prima facie, applied by the Company during the year for the purposes for which the loan was obtained.
12. According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, funds
raised on short-term basis amounting to Rs. 494 million have been, prima facie, used during the year for long-term investment.
13. We have verified the end use of money out of the fund raised through public issue in 2005-2006 as disclosed in the notes to financial
statements.
14. To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the
Company was noticed or reported during the year.

P. B. Pardiwalla
Partner
Place: Mumbai

Balance Sheet as at 31 March, 2008 Shopper's Stop Ltd.
(All amounts in Rs. million)
Notes Mar-08 Mar-07

SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital 3 348.62 348.27
Reserves and surplus 4 2,618.34 2,603.38
2,966.96 2,951.65
LOAN FUNDS
Secured loans 5 1,068.31 1,131.44
Unsecured loans 6 661.00 —
1,729.31 1,131.44
DEFERRED TAX LIABILITY 25(b) 16.85 41.17
4,713.12 4,124.26
APPLICATION OF FUNDS
FIXED ASSETS 7
Gross Block 3,253.38 1,997.38
Less: Accumulated depreciation 1,078.22 690.05
Net Block 2,175.16 1,307.33
Capital work in progress (including Capital advances) 228.62 214.29
2,403.78 1,521.62
INVESTMENTS 8 807.21 489.05
CURRENT ASSETS, LOANS AND ADVANCES
Inventories 9 1,698.76 1,152.40
Sundry debtors 10 81.95 72.77
Cash and bank balances 11 58.38 1,016.94
Loans and advances 12 1,763.09 1,240.12
3,602.18 3,482.23
Less: CURRENT LIABILITIES AND PROVISIONS 13
Current Liabilities 2,038.88 1,307.52
Provisions 61.17 61.12
2,100.05 1,368.64
Net current assets 1,502.13 2,113.59
4,713.12 4,124.26
The accompanying notes 1 to 36 are an integral part of the financial statements.
As per our attached report of even date. For and on behalf of the Board of Directors
For Deloitte Haskins & Sells C. L. Raheja Neel Raheja B. S. Nagesh
Chartered Accountants Chairman Director Customer Care Associate &
Managing Director
P. B. Pardiwalla Chandrashekhar B. Navalkar Prashant Mehta

Partner Customer Care Associate & Customer Care Associate &
Membership No. 40005 Group Chief Financial Officer Vice President - Legal &
Mumbai, Dated : 25 April, 2008 Company Secretary

Profit and Loss Account
for the year ended 31 March, 2008 Shopper's Stop Ltd.
Notes Mar-08 Mar-07

INCOME
Retail Turnover
Own merchandise (including concession sales) 2(e) 11,043.77 7,980.02
Consignment merchandise 857.00 870.46
Other Retail operating income 14 168.30 145.03
20 12,069.07 8,995.51
Less: Value Added Tax / Sales Tax 555.08 387.43
Less: Cost of consignment merchandise 613.89 612.10
10,900.10 7,995.98
Other income 15 88.44 132.55
10,988.54 8,128.53
EXPENDITURE
Cost of goods sold 16 6,921.47 5,075.78
Employee costs 17 782.64 584.96
Operating and administrative expenses 18 2,634.17 1,680.38
Interest and finance charges 19 112.35 44.01
Depreciation and Amortisation 392.74 256.27
10,843.37 7,641.40
PROFIT BEFORE TAX 145.17 487.13
Tax Charges 25(a) 75.50 225.18
PROFIT AFTER TAX 69.67 261.95
BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR 484.56 296.83
AMOUNT AVAILABLE FOR APPROPRIATION 554.23 558.78
APPROPRIATIONS
Proposed Dividend 52.29 52.24
Corporate Dividend Tax 8.88 8.88
BALANCE CARRIED TO BALANCE SHEET 489.58 484.56
Earning per share
(Equity shares, par value of Rs. 10/- per share) 30
Basic (Rs.) 2.00 7.58
Diluted (Rs.) 2.00 7.57
Managing Director


Statement of Cash Flows for the year ended 31 March, 2008 Shopper's Stop Ltd.

Mar-008 Mar-07
Cash flows from operating activities
Net profit before tax 145.17 487.13
Adjustments for :
Interest and finance charges 112.35 44.01
Deferred revenue expenses — 0.04
Loss on sale of fixed assets 0.46 1.05
Amortisation of Stock Compensation 1.29 1.27
Provision for Doubtful Debts and Advances 0.66 0.17
Interest income (63.46) (90.57)
Operating profit before working capital changes 589.21 699.37
Increase in Inventories (548.48) (494.27)
Increase in Sundry Debtors (9.84) (21.50)
Increase in Loans and Advances (other than lease deposits) (296.41) (254.38)
Increase in Lease Deposits (199.66) (240.22)
Increase in Current Liabilities and Provisions 730.44 524.84
Cash generated from operations 265.26 213.84
Income taxes paid (123.40) (186.10)
Net cash from operating activities 141.86 27.74
Cash flow from investing activities
Purchase of fixed assets (including capital work in progress) (1,275.76) (554.22)
Moneys received in respect of fixed assets sold / discarded 0.41 0.53
Investments made (318.16) (138.36)
Interest income 63.46 90.57
Net cash used for investing activities (1,530.05) (601.48)
Cash flows from financing activities
Proceeds from issuance of share capital 0.35 4.44
Payment of Dividend and Dividend Tax (61.12) (58.80)
Share premium on Issue of shares 6.08 45.73
(Payment)/Proceeds of/from secured loans (63.13) 571.90
Proceeds/(Payment) from/of unsecured loans 661.00 (26.00)
Payment of interest and finance charges (112.35) (44.01)
Net cash from financing activities 430.83 493.26
Net Decrease in cash and cash equivalents (957.36) (80.48)
Cash and cash equivalents as at beginning of the year 1,012.64 1,093.12
Cash and cash equivalents as at the end of the year 55.28 1,012.64
(957.36) (80.48)
Note :
Cash and Cash Equivalents as per Balance Sheet (see Note 11) 58.38 1,016.94
Less: Deposit under lien 3.10 4.30
Cash and Cash Equivalents after reducing deposit under lien 55.28 1,012.64
As per our attached report of even date For and on behalf of the Board of Directors
Managing Director

Notes to the Financial Statements
1. COMPANY BACKGROUND
Shopper’s Stop Limited (‘SSL’ or 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 facilities. As at 31 March 2008, the
Company operated through 27 such departmental stores located in different cities of India. The activities of the company in the
context of Accounting Standard 17 on “Segment Reporting” constitute a single reporting segment.
2. 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 Indian Generally
Accepted Accounting Principles and the provisions of the Companies Act, 1956.
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. 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.
c) 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 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.
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:
(%)
Air conditioning and other equipment 5.00
Furniture, fixtures and other fittings 20.00
Computers 33.33
Vehicles 20.00
Leasehold Improvements 10.00
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 estimate of its useful life. (3 to 5 years)
Trademarks and Copyrights are amortized uniformly over a period of 10 years.

Impairment of assets
An asset is considered as impaired in accordance with Accounting Standard 28 on Impairment of Assets when at 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.
d) Investments
The company has presently classified all its investments as “Long Term” in accordance with Accounting Standard 13 on
Accounting for Investments. Long-term investments are stated at cost. Provision is made to recognise a decline, other than
temporary, in the value of investments.
e) Revenue recognition
Revenue is recognised when it is earned and no significant uncertainty exists as to its realisation or collection.
Retail sales and revenues are recognised 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. Sales Tax and Value Added 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 sponsor’s
advertisements are promoted / displayed. 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 realisable value. Cost of inventories comprises 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.
g) Employee benefits
Short term employee benefits which are payable within twelve months after the end of the period in which the employees
render service are measured at cost.
Long term employee benefits (benefits which are payable after the end of twelve months from the end of the period in which
the employees render service) and post employment benefits (benefits which are payable after completion of employment) are
measured on a discounted basis by the Projected Unit Credit Method on the basis of annual third party actuarial valuation.

Contributions to provident fund, a defined contribution plan, are made in accordance with the rules of the statute and are
recognized as expenses when employees have rendered service entitling them to the contributions.
Gratuity and leave encashment costs (defined benefit plans) are determined using the Projected Unit Credit Method with
actuarial valuations being carried out by third party actuaries at each balance sheet date.
Gratuity and leave encashment benefit obligations recognized in the Balance Sheet represents the present value of the obligation
as adjusted for past service cost and as reduced by the fair value of plan assets. Actuarial gains and losses are recognized
immediately in the profit and loss account.
h) Foreign currency transactions
Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Monetary foreign
currency assets and liabilities are translated into Indian Rupees at the exchange rate prevailing at the balance sheet date. All
exchange differences are dealt with in the profit and loss account.
i) Income Tax
Income taxes are accounted for in accordance with Accounting Standard 22 on Accounting for Taxes on Income. Taxes comprise
both current and deferred tax.
Current tax is measured at the amount expected to be paid/recovered from the taxation authorities, using the applicable tax
rates and tax laws.
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. They are measured using the
substantively enacted tax rates and tax regulations.
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.
Fringe Benefits Tax (FBT) payable under the provisions of section 115 WC of the Income Tax Act, 1961 is in accordance with the
Guidance Note on Accounting for Fringe Benefits Tax issued by the ICAI is regarded as an additional income tax and considered
in determination of the profits for the year. Tax on distributed profits payable in accordance with the provisions of section
115 O of the Income Tax Act, 1961 is in accordance with the Guidance Note on Accounting for Corporate Dividend Tax regarded
as a tax on distribution of profits and is not considered in determination of the profits for the year.
j) Earnings Per Share
The company reports basic and diluted Earnings Per Share (EPS) in accordance with Accounting Standard 20 on Earnings Per
Share. 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. 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, except
where the results are anti-dilutive.
k) Borrowing costs
Borrowing costs attributable to the acquisition or construction of qualifying assets, as defined in Accounting Standard 16 on
Borrowing Costs, are capitalized as part of the cost of acquisition. Other borrowing costs are expensed as incurred.

l) Operating Lease
Operating Lease payments are recognized as an expense in the Profit & Loss Account on a straight-line basis, which is
representative of the time pattern of the user’s benefit.
m) Stock based compensation
The compensation cost of stock options granted to employees is calculated using the intrinsic value of the stock options. The
compensation expense is amortized uniformly over the vesting period of the option.
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, investing and financing activities of the Company.
Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and demand deposits with banks.
o) Contingent Liabilities
Contingent Liabilities as defined in Accounting Standard 29 on Provisions, Contingent Liabilities and Contingent Assets are
disclosed by way of notes to the accounts. Provision is made if it becomes probable that an outflow of future economic benefits
will be required for an item previously dealt with as a contingent liability.

Mar-08 Mar-07
3. SHARE CAPITAL
Authorised :
100,000,000 (previous year 40,000,000) equity shares of Rs. 10/- each 1,000.00 400.00
Issued and Subscribed :

34,862,330 (Previous year 34,827,234) equity shares of Rs. 10/- each 348.62 348.27
4. RESERVES AND SURPLUS

General Reserves
Balance, at beginning of the year 26.65 13.55
Transferred from Profit and Loss Account 3.48 13.10
30.13 26.65
Securities Premium Account:

Balance, at beginning of the year 2,083.00 2,037.27
Add : Received during the year 6.08 45.73
2,089.08 2,083.00
Employees' Stock Options

Employees' Stock Options Outstanding 10.20 10.61
Less : Deferred Employee Compensation 0.65 1.44
9.55 9.17
Balance in Profit and Loss Account 489.58 484.56

2,618.34 2,603.38
5. SECURED LOANS
From Banks
Cash credit facilities (Refer note below) 668.31 781.62
Working Capital Demand Loans (Refer note below) 400.00 349.82
1,068.31 1,131.44
Note:
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, both present and future.
6. UNSECURED LOANS
Short term Loan from Banks 650.00 —
From Subsidiary Company 11.00 —
661.00 —

7. FIXED ASSETS
(All amounts in Rs. millions)
Description GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK
1 April, Additions Deductions 31 March, 1 April For the Deductions 31 March, 31 March, 31 March
2007 2008 ,2007 year 2008 2008 2007

TANGIBLE ASSETS
Leasehold improvements 557.83 392.93 — 950.76 105.04 92.29 — 197.33 753.43 452.79
Air conditioning and other equipment 549.47 373.15 1.40 921.22 125.16 39.45 0.72 163.89 757.33 424.31
Furniture, fixtures and other fittings 555.16 303.00 3.09 855.07 249.08 155.60 2.89 401.79 453.28 306.08
Computers 238.56 125.71 0.94 363.33 147.49 78.00 0.94 224.55 138.78 91.07
for the year ended 31 March, 2008
Vehicles 2.95 — — 2.95 2.07 0.44 — 2.51 0.44 0.88

Total 1,903.97 1,194.78 5.43 3,093.33 628.84 365.78 4.55 990.06 2,103.27 1,275.13
INTANGIBLE ASSETS
Trademarks and patents 19.27 4.64 — 23.91 6.97 2.20 — 9.16 14.75 12.30
Software 74.14 62.00 — 136.14 54.24 24.76 — 79.00 57.14 19.90
Total 93.41 66.64 — 160.05 61.21 26.96 — 88.16 71.89 32.20
Grand Total 1,997.38 1,261.42 5.43 3,253.38 690.05 392.74 4.55 1,078.22 2,175.16 1,307.33
Previous year 1,610.11 403.89 16.62 1,997.38 446.03 252.20 8.18 690.05 1,307.33
1) Some of the Trademarks and Patents are pending for registration with relevant authorities and formalities (including for removal of objections) are under progress.
2) Additions include the following pre-operative expenditure on new stores:
31 Mar-08 31 Mar-07
Employee Costs 34.09 21.71
Travelling 14.78 6.66
Insurance 0.29 1.13
Interest 2.90 4.31
Consultation and Registration Fees 8.22 25.33
Other Expenses 1.72 3.46
Total 62.00 62.60
Shopper's Stop Ltd.
Mar-08 Mar-07
8. INVESTMENTS (Trade, long term at cost, unquoted)
In subsidiary companies:
Shoppers' Stop Services (India) Limited
50,000 Equity Shares of Rs. 10/- each Fully Paid 0.50 0.50
Less: Provision for diminution in value of investment (0.50) (0.50)
— —
Upasna Trading Limited
5,000 Equity Shares of Rs.100/- each Fully Paid 0.50 0.50
— —
Shoppers' Stop.Com (India) Limited
50,000 Equity Shares of Rs. 10/- each Fully Paid 0.50 0.50
— —
Crossword Bookstores Limited
9,562,500 Equity Shares of Rs.10/- each Fully Paid 250.59 250.59
10,000,000 5.5% Cumulative Reedemable 100.00 100.00
Preference Shares of Rs.10/- each
Gateway Multichannel Retail (India) Limited 0.26 —
26,000 (Previous year Nil) Equity shares of Rs.10/- each Fully Paid
In Joint Venture Companies:
Timezone Entertainment Private Limited
7,170,290 (Previous year 6,630,290) Equity Shares of Rs. 10/- each Fully Paid 71.70 66.30
Nuance Group (India) Private Limited
19,250,000 (Previous year 7,000,000) Equity Shares of Rs. 10/- each Fully Paid 192.50 70.00
In Associate Company:
Hypercity Retail (India) Limited
180,500 Equity Shares of Rs 10/- each Fully Paid 2.05 2.05
1,90,00,000 (Previous year Nil), 7% Cumulative Redeemable 190.00 —
Preference Shares of Rs.10/- each
Others:
Stargaze Properties Private Limited
1,000 Equity Shares of Rs. 10/- each 0.01 0.01
Retailers Association of India
10,000 Equity Shares of Rs. 10/- each 0.10 0.10
Aesthetic Realtors Private Limited*
66 Equity Shares of Rs. 10/- each Fully Paid — —
807.21 489.05
* The Company has invested Rs. 660 in Aesthetic Realtors Private Limited
9. INVENTORIES
(At lower of cost and Net realisable value)
Retail merchandise 1,698.76 1,152.40

Mar-08 Mar-07
10. SUNDRY DEBTORS
(unsecured)
Debts outstanding for more than 6 months
Considered good 4.77 —
Considered doubtful 1.24 0.58
Other Debts - considered good 77.18 72.77
83.19 73.35
Less: Provision 1.24 0.58
81.95 72.77
11. CASH AND BANK BALANCES

Cash on hand 14.73 21.66
Balances with scheduled banks:
In Current Account 40.55 20.67
In Deposit accounts — 970.31
In Margin Money account 3.10 4.30
58.38 1,016.94
12. LOANS AND ADVANCES

(unsecured, considered good unless otherwise stated)
Loans (including accrued interest)
To Subsidiaries 159.21 30.15
To other group companies 174.23 90.05
Due from suppliers 157.02 173.46
Advances recoverable in cash or in kind or for value to be received :
Premises and other deposits 971.66 764.51
Interest Receivable on Fixed Deposit — 25.75
Tax Set off and Input Credits available 179.45 70.17
Prepayments 63.72 31.85
Balance with Custom Authorities 4.17 7.88
Income taxes paid (net of provision for tax) 47.53 30.52
Others 49.80 15.78
1,806.79 1,240.12
Less: Provision 43.70 —
1,763.09 1,240.12
Loans and advances include amount due from directors 30.42 —
Maximum amount outstanding during the year 30.42 —

Mar-08 Mar-07
13. CURRENT LIABILITIES AND PROVISIONS
Current liabilities (Refer note 34)
Sundry creditors (see note below) 1,889.90 1,240.57
Security deposits 16.10 13.83
Other Liabilities 132.88 53.12
2,038.88 1,307.52
Provisions
For Proposed Dividend 52.29 52.24
For Corporate Dividend Tax 8.88 8.88
61.17 61.12
2,100.05 1,368.64
Notes:
Sundry creditors include amounts due to wholly owned subsidiaries:
Shopper's Stop Services (India) Limited Rs. 0.41 million (Previous year Rs. 0.63 million)
Shopper's Stop.Com (India) Limited Rs. 0.26 million (Previous year Rs. 0.29 million)
Crossword Bookstore Limited Rs. 20.40 million (Previous year Rs. Nil)
Upasna Trading Limited Rs. 2.88 million (Previous year Rs. Nil)
14. OTHER RETAIL OPERATING INCOME

Facility management fees 26.21 30.73
Income from store displays and Sponsorship Income 81.27 72.62
Direct Marketing Income 60.82 41.68
168.30 145.03
15. OTHER INCOME

Interest Income from Banks and Others 63.46 90.57
[Tax deducted at source Rs.14.27 million (Previous year Rs. 20.22 million)]
Scrap sales 4.88 3.45
Miscellaneous income and credits 20.10 38.53
88.44 132.55
16. COST OF GOODS SOLD

(Including concession purchases)
Opening stock 1,152.40 658.42
Less : VAT Credit available on Opening Stock 2.12 0.29
Add : Purchases 7,469.95 5,570.05
Less : Closing stock 1,698.76 1,152.40
6,921.47 5,075.78
17. EMPLOYEE COSTS

Salaries allowance and bonus 707.48 518.09
Stock compensation expense 1.29 1.27
Contribution to provident funds 36.68 28.76
Gratuity and leave encashment 10.88 18.68
Staff welfare expenses 26.31 18.16
782.64 584.96

Mar-08 Mar-07
18. OPERATING AND ADMINISTRATIVE EXPENSES
Insurance 11.75 8.07
Lease rent and Hire Charges 1,018.72 636.10
Business conducting fees 107.84 85.16
Rates and taxes 55.75 13.07
Repairs and maintenance :
Buildings 149.82 99.04
Plant and machinery 17.10 11.81
Others 23.58 12.52
Legal and professional fees 26.64 16.55
Housekeeping charges 53.44 28.58
Security charges 64.65 42.33
Computer expenses 68.53 39.17
Conveyance and travelling expenses 56.87 49.31
Electricity charges 277.41 183.39
Advertisement and publicity 256.30 176.45
Sales promotion 185.13 110.70
Charges on credit card transactions 75.64 52.75
Packing materials 47.13 32.38
Loss on Sale of Fixed Assets 0.46 1.05
Miscellaneous expenses 137.41 81.95
2,634.17 1,680.38
19. INTEREST AND FINANCE CHARGES

On Cash Credit/Working capital demand loans 54.69 20.80
Other borrowing costs 52.33 20.03
Finance charges 5.33 3.18
112.35 44.01
20. Retail Turnover in the Profit and Loss Account indicates the gross volumes of business and operations.
21. Contingent liabilities in respect of:

a) Guarantee given for loan taken by Joint venture companies from banks. 361.50 172.50
b) Contingent contractual claims which are dependent on the outcome of
certain group company commercial tax assessments. 0.92 4.35
c) Disputed sales tax matters in appeal 0.07 4.67
d) Disputed Customs Duty 2.40 —
e) Unpaid service tax 28.20 —
22. CAPITAL COMMITMENT (NET OF ADVANCES)

Fixed assets 238.22 602.51

23. SEGMENT REPORTING

The company is primarily engaged in the business of retail trade through retail and departmental store facilities, which in the context
of AS 17 on 'Segment Reporting' constitute a single reporting segment.
24. LEASING TRANSACTIONS

a) Operating lease rental charged to revenue for lease agreements entered on or after 1 April 2001 are:
Particulars Mar-08 Mar-07

Office premises and Stores 1,003.99 617.86
Residential flat for Accommodation of employee 1.98 1.98
b) The future minimum rental payments in respect of non cancellable lease for premises are as follows:
Not later than one year 495.71 261.03

Later than one year and not later than five years 1,145.68 363.60
Later than five years 448.15 NIL
The agreements are executed for periods of 60 to 288 months with a non cancellable period at the beginning of the agreement
ranging from 0 to 108 months and having a renewable clause.
25. (a) TAX CHARGE

The tax expense for the year comprises of :
Mar-08 Mar-07
Income Tax
– Current tax 74.75 179.53
– Deferred tax (credit)/ charge (24.32) 37.58
– Fringe Benefit Tax 12.37 8.06
– Short Provision of tax of earlier year 12.70 —
Wealth Tax — 0.01
75.50 225.18
(b) DEFERRED TAX LIABILITY

Major components of Deferred Tax Liability are as follows:
Depreciation (20.97) (44.91)
Expenditure allowable on payment basis 4.12 3.74
Deferred Tax Liability (Net) (16.85) (41.17)


26. RELATED PARTY DISCLOSURES
Following are the material transactions with related parties
Nature Subsidiaries Associates Joint Key Management Total
Ventures Personnel
Purchase of Merchandise — 0.03 — — 0.03
Hypercity Retail (India) Limited — 0.03 — — —
(93.85) — — — (93.85)
Sale of Merchandise — — 0.03 — 0.03
Timezone Entertainment Private Limited — — 0.03 — —
— — — — —
Payment of conducting fees/Lease Rent 11.75 287.64 — — 299.39
Ivory Properties and Hotels Private Limited — 149.75 — — —
K Raheja Private Limited — 0.12 — — —
Inorbit Malls (India) Private Limited — 133.01 — — —
Crossword Bookstores Limited 11.75 — — — —
Avacado Properties and Trading India Private Limited — 4.76 — — —
(10.86) (138.02) (148.88)
FCC income — — — — —
Crossword Bookstores Limited — — — — —
(0.13) — — — (0.13)
Expenses Paid 115.88 — — — 115.88
Upasna Trading Limited 96.55 — — — —
(84.63) — — — (84.63)
Interest Received 6.70 21.73 0.76 — 29.19
Gateway Multichannel Retail (India) Limited 6.70 — — — —
Nuance Group (India) Private Limited — — 0.76 — —
— — — — —
Interest Expenses 0.80 — — — 0.80
— — — — —
Sharing of Income — — — — —
Hypercity Retail (India) Limited — — — — —
— (2.42) — — (2.42)
Service Charges Paid 5.34 — — — 5.34
Shoppers Stop Services (India) Limited 0.54 — — — —
(5.34) — — — (5.34)
Deposits Paid — 11.48 — — 11.48
Inorbit Malls (India) Private Limited — 6.25 — — —
(11.68) (5.84) — — (17.52)
Lease rent received — — 0.93 — 0.93
Timezone Entertainment Private Limited — — 0.93 — —
(4.10) — — — (4.10)
Reimbursement of Expenses 6.72 7.11 1.35 — 15.18
Nask Realtors Private Limited — 0.24 — — —
— — — — —
Expenses recovered — 32.74 — — 32.74
Hypercity Retail (India) Limited 32.74 — — —
(2.36) (12.87) — — (15.23)
Service Charges Income — — — — —
Crossword Bookstores Limited — — — — —
— (6.96) — — (6.96)
Investments made 0.26 190.00 122.50 — 312.76
— — (70.00) — (70.00)


Nature Subsidiaries Associates Joint Key Management Total
Ventures Personnel
Deposit Received 0.23 — — — 0.23
Gateway Multichannel Retail (India) Limited 0.23 — — —
— — — — —
Loan Given 156.53 340.00 90.00 — 586.53
Nuance Group(India) Private Limited — — 90.00 —
— (90.05) (5.48) — (95.53)
Loan Received 11.00 — — — 11.00
Royalty Received — — — — —
— (0.58) — — (0.58)
Recovery of Loan 12.32 352.08 — — 364.40
Hypercity Retail (India) Limited 352.08 — — —
(23.60) — — — (23.60)
Remuneration — — — 11.24 11.24
— — — (26.26) (26.26)
Commission paid to Directors — — — 0.60 0.60
— — — (1.14) (1.14)
Directors Sitting Fees — — — 0.62 0.62
— — — (0.82) (0.82)
Balance outstanding at the year end
Payable
Shoppers Stop Services (India) Limited 0.41
(0.63) Cr.
Shoppers Stop.Com (India) Limited 0.26
(0.29) Cr.
Crossword Bookstores Limited 20.40
(17.83) Dr.
Upasna Trading Limited 2.88
(12.32) Dr.
Receivables
Hypercity Retail (India) Limited 38.97
(92.55) Dr.
K. Raheja Private Limited 0.04
(0.07) Dr.
Nuance Group (India) Private Limited 0.97
(5.48) Dr.
Ivory Properties and Hotels Private Limited 58.87
(95.09) Dr.
Inorbit Malls (India) Private Limited 25.70
(22.34) Dr.
Gateway Multichannel Retail (India) Limited 159.21
—
Key Management Personnel 30.42 Dr.
—
The figure in bracket pertain to previous year.
Names of related parties and description of relationship:
Subsidiaries Upasna Trading Limited, Shoppers Stop.com (India) Limited
Shoppers Stop Services (India) Limited, Crossword Bookstores Limited
Gateway Multichannel Retail (India) Limited.
Associates Ivory Properties and Hotels Private Limited, K. Raheja Corp. Private Limited
Palm Shelter Estate Development Private Limited, K. Raheja Private Limited, Inorbit Malls (India) Pvt. Limited
Hypercity Retail (India) Limited, Avacado Properties and Trading India Private Limited
Joint Ventures Nuance Group (India) Private Limited, Timezone Entertainment Private Limited
Key Management Personnel B.S. Nagesh, Govind Shrikhande

27. UNHEDGED FOREIGN CURRENCY EXPOSURE

The year end foreign currency exposures that have not been hedged by a derivative instruments or otherwise are given below:
Rupees Amount in Rupees Amount in
in millions Foreign currency in millions Foreign currency
Payable for purchase of Merchandise 12.65 GBP 1,58,941 3.28 GBP 38,369
0.44 USD 11,128 — —
Payable for purchase of Fixed Assets — — 0.58 SGD 20,595
— — 1.91 USD 43,726
Payable towards Royalty 3.15 USD 78,897 1.69 USD 38,633
1.38 GBP 17,369 — —
28. ESOP SCHEMES
a) Number of Employee Number of Weighted average Number of Weighted average
Stock Option Outstanding : Options exercise price (Rs.) Options exercise price (Rs.)
Mar-08 Mar-07
Outstanding at the beginning of the year 532,045 456.51 676,854 183.47
Granted during the year 420,000 482.05 390,437 541.88
Forfeited during the year 26,394 — 90,942 —
Exercised during the year 35,096 182.87 444,304 112.92
Outstanding at the end of the year 890,555 481.42 532,045 456.51
b) During the year, the following employees share based payment plans has been formulated by the company. The compensation
cost of stock options granted to employees is calculated using the instrinsic value of the stock options.
ESOP V (07-08) ESOP V (06-07)
Date of grant 23-Aug-07 28-Jan-08 29-Jul-06 29-Jul-06 28-Oct-06
Number of option granted 400,000 20,000 232,056 145,000 13,381
Contractual life 8 Years 8 Years 6 Years 6 Years 6 Years
Vesting Schedule (from the date of grant)
First Year — — 30% — 30%
Second Year — — 30% — 30%
Third Year 35% 35% 40% 100% 40%
Fourth Year 35% 35% — — —
Fifth Year 30% 30% — — —
Method of settlement Equity Equity Equity Equity Equity
Estimated Fair Values (Arrived at by applying
Black Scholes Option Pricing Model) Rs. 144.43 184.08 155.7 183.29 226.53
Model inputs (share price at the grant date) Rs. 402.25 485 463.75 463.75 594.50
Exercise Price Rs. 485 423 540 540 595
Expected Volatility 38.06% 36.40% 39.81% 39.81% 38.50%
Risk free rate of return 7.19% to 7.92% 7.22% to 7.78%
Since the Company is relatively newly listed it does not have sufficient information on historical volatility, so the volatility for the
longest period for which the trading activity is available have been considered.
c) The weighted average contractual life of the options outstanding is 5.25 years
d) Other information regarding employee share-based payment plans is as below :
(All amounts in Rs. millions unless otherwise stated)
Mar-08 Mar-07
i) Expense arising from employee share based payment plans 1.29 1.27
ii) Impact on PAT if fair value method had been used instead of Intrinsic Value Method 48.02 25.55
iii) EPS if fair value method have been used instead of Intrinsic Value Method (Rs.)
– Basic 0.63 6.84
– Diluted 0.63 6.83
iv) Closing balance of ESOP 9.55 9.17

29. UTILISATION OF ISSUE PROCEEDS

(All amounts in Rs. millions unless otherwise stated)
Mar-08 Mar-07
Net Issue proceeds received in F. Y. 2005-2006 1,653.16 1653.16
Utilised till Mar-08 as under:
IPO Expenses 124.43 124.43
Repayment of finance creditors relating to acquisition of
Fixed Assets/working capital requirements 1,528.73 577.64
Balance amount in Fixed Deposits with Banks — 951.09
30. EARNING PER SHARE (EPS) IS CALCULATED AS FOLLOWS:
(a) Profit attributable to equity share holders (Rs. in million) 69.67 261.95
(b) Weighted Number of equity shares outstanding during the year 34,849,836 34,536,371
(c) Weighted Number of equity shares outstanding
during the year after adjustment for dilution 34,861,017 34,552,677
(d) Nominal value per share (Rs.) 10 10
(e) EPS :
– Basic (Rs.) 2.00 7.58
– Diluted (Rs.) 2.00 7.57
31. INTEREST IN JOINT VENTURES
The Company's interest, as a venture, in jointly controlled entity incorporated in India is:
Name Principal Activities Proportion of Proportion of
ownership Interest ownership Interest
31 March 2008 31 March 2007
Nuance Group (India) Private Limited Airport retailing 50% 50%
Timezone Entertainment Private Limited Entertainment 45% 45%
The Company's share of each of the assets, liabilities, income and expenses, etc. (each without elimination of the effect of transactions
between the Company and the Joint Venture) related to its interest in this joint venture is:
Mar-08 Mar-07
I. ASSETS
1. Fixed Assets including Capital Work in Progress (Net) 162.67 57.86
2. Investments (Rs. 5,000) — —
3. Current Assets, Loan and Advances
a) Inventories 2.72 1.26
b) Cash and Bank Balances 38.80 17.43
c) Loans and Advances 231.53 230.20
II. LIABILITIES
1. Loan Funds
a) Secured Loan 172.50 172.50
b) Unsecured Loans 30.22 —
2. Current Liabilities and Provisions
a) Liabilities 37.12 23.38
b) Provisions — 0.13
III. INCOME
Revenue 47.39 29.44
IV. EXPENSES
Operational Expenses 45.90 33.19
Interest 11.86 4.99
Depreciation/Amortisation 8.84 8.19

32. EMPLOYMENT AND RETIREMENT BENEFITS Current Year

Provision for Leave Encashment 12.13
Post-employment benefits
Defined contribution plans
Company's contribution to Provident Fund 25.34
Defined benefit scheme-Gratuity
a. Liability recognised in Balance Sheet
Change in Benefit Obligation
Present Value of Obligations
As at 1 April 2007 15.22
Service cost 6.05
Interest cost 1.20
Actuarial Loss on obligations (0.86)
Benefits paid (2.35)
As at 31 March 2008 19.26
Less: Fair Value of Plan Assets
As at 1 April 2007 15.22
Expected Return on Plan assets less loss on investments 1.04
Employers' Contribution 5.77
Actuarial gain on Plan Assets (0.42)
As at 31 March 2008 19.26
b. Expense during the year
Service Cost 6.05
Interest Cost 1.20
Expected Return on Plan assets (1.04)
Actuarial (Gain)/Loss on obligations (0.44)
5.77
c. Principal actuarial assumptions
Rate of Disounting 8% p.a.
Rate of Return on Plan Assets 8% p.a.
Rate of increase in salaries 4% p.a.
Rate of Attrition 6%
This being the first year of adoption of Revised Accounting Standard 15 on Employee Benefits comparative figures have not been given.

Mar-08 Mar-07
33. SUPPLEMENTARY STATUTORY DATA
a) Value of Imports on CIF Basis:
Computer software 4.81 2.66
Computer Hardware 37.10 10.32
Furniture and Fixtures and Electrical Items 24.48 32.95
Purchase of Merchandise 214.68 180.56
281.07 226.49
b) Expenditure in Foreign Currency (on payment basis):
Travelling expenses 15.98 6.96
Subscription and membership 2.52 3.49
Computer consultancy 10.94 4.12
Professional fees 11.80 14.60
Royalty 28.53 1.85
Recruitment Fees — 1.44
Reimbursement of other expenses 24.33 —
Others 1.14 1.00
95.24 33.46
c) Earnings in Foreign Exchange (On receipt basis):
Foreign currency and foreign credit card collection on sale of merchandise 493.73 434.23
493.73 434.23
d) Payments to Auditors (Excluding service tax):
i) Audit fees 2.50 2.00
ii) Other matters 3.33 0.20
iii) Out of pocket expenses 0.11 0.07
5.94 2.27
e) Payments to Directors:
i) Executive Directors:
Salary, allowance and bonus 8.96 24.49
Contribution to Provident and other Funds 1.64 1.22
Perquisites 0.64 0.55
11.24 26.26
The Company is in the process of making 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, 1956, read with schedule XIII of the Act, Rs. 27.63 million, till such
time as sanction is received from the Central Government, the excess
amount paid is considered as recoverable from the director (Note No. 12)
ii) Non-executive directors
– Commission 0.60 1.14
– Sitting Fees 0.62 0.82
f) Computation of Net Profit in accordance with Section 309(5) of the
Companies Act,1956.
Profit Before Tax 145.17 487.13
Add:
i) Loss on sale of Fixed Assets 0.46 1.05
ii) Managerial Remuneration 11.24 26.26
iii) Provision for Doubtful Debts 0.66 0.17
Net Profit as per Section 309(5) 157.53 514.61
Commission to Non Executive Directors - 1% of net profits: Rs. 1.58 million restricted to Rs. 0.6 million.

g) Quantitative details of opening stock, purchases, sales and closing stock (excluding consignment merchandise)
For the year ended 31 March 2008. (Quantity in '000s)
Category Units Opening stock Purchases Sales Closing stock*
Quantity Amount Quantity Amount Quantity Amount Quantity Amount
Apparels Nos. 1,703 696.67 9,856 4,432.62 9,115 6,388.60 2,327 1,025.56
Non
Nos. 1,840 455.73 8,556 3,037.33 7,965 4,655.17 2,331 673.20
Apparels
3,543 1,152.40 18,412 7,469.95 17,080 11,043.77 4,658 1,698.76
For the year ended 31 March 2007 (Quantity in '000s)
Category Units Opening stock Purchases Sales Closing stock*
Quantity Amount Quantity Amount Quantity Amount Quantity Amount
Apparels Nos. 1,126 459.05 8,476 3,314.88 7,824 4,896.90 1,703 696.67
Non Apparels Nos. 719 199.37 6,341 2,255.17 5,143 3,083.12 1,840 455.73
1,845 658.42 14,817 5,570.05 12,967 7,980.02 3,543 1,152.40
*Closing stock is after adjusting samples, free gifts, damaged goods and shortages at our store.
34. The Company has not received any intimation from the "suppliers" under the Micro Small and Medium Enterprises Development Act,
2006 and therefore disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required
under the said Act have not been given.
35. As at 31 March 2008, the Company has unutilised service tax input credit of Rs. 175.06 million. The company is working on various
options to utilise the credit, which is available for an indefinite period under the Cenvat Credit Rules. These financial statements
have been prepared assuming that the company will be able to utilise this credit in future years and therefore do not include any
adjustments in the financial information that might result, should the company be unable to utilise the credit.
36. Comparative financial information (i.e. the amounts and other disclosures of the preceding year) presented above is included as an
integral part of the current year's financial statements, and is to be read in relation to the amounts and the disclosures relating to
the current year. Figures of the previous year are regrouped and reclassified wherever necessary to correspond to the figures of the
current year.

Balance Sheet Abstract and
Company's General Business Profile Shopper's Stop Ltd.
I. Registration Details:
Registration No. 1 1 - 1 0 8 7 9 8 State Code 1 1
Balance Sheet Date 3 1 0 3 0 8
D a t e Month Y e a r
II. Capital raised during the year (Amount in Rs. Thousands):
Public Issue Right Issue
– – – – – –
Bonus Issue Private Placement
– – – – – –
III. Position of Mobilisation and Deployment of Funds (Amounts in Rs. Thousands):
Total Liabilities Total Assets
4 7 1 3 1 2 0 4 7 1 3 1 2 0
Sources of Funds
Paid-up Capital Reverse & Surplus
3 4 8 6 2 0 2 6 1 8 3 4 0
Loans Deferred Tax Liabilities
1 7 2 9 3 1 0 1 6 8 5 0
Application of Funds
Net Fixed Assets Investments
2 4 0 3 7 8 0 8 0 7 2 1 0
Net Current Assets Misc. Expeniture
1 5 0 2 1 3 0 – –
Accumulated Losses
– – –
IV. Performance of Company (Amount in Rs. Thousands):
Turnover (Gross Revenue) Total Expenditure
1 0 9 8 8 5 4 0 1 0 8 4 3 3 7 0
+ – Profit/Loss Before Tax + – Profit/Loss After Tax
+ 1 4 5 1 7 0 + 6 9 6 7 0
(Please tick Appropriate box + for Profit – for Loss)
Earnings per Share in Rs. Dividend
2 . 0 0 1 5 %
V. Generic Names of Three Principal Products/Services of Company (as per Monetary Terms):
Item Code No. (ITC Code) N A
Product Description
Product Description
Product Description
C. L. Raheja Neel Raheja B. S. Nagesh

Chairman Director Customer Care Associate &
Managing Director
Chandrashekhar B. Navalkar Prashant Mehta
Customer Care Associate & Customer Care Associate &
Group Chief Financial Officer Vice President - Legal &

Directors' Report Crossword Bookstores Ltd.
To The Members,
Your Directors are pleased to present the Ninth Annual Report on the business and operations of the Company together with the Audited
Statements of accounts for the year ended 31 March, 2008.
(Rs. ‘000)
Particulars Year ended Year ended

March 31, 2008 March 31, 2007
Gross Revenues 80,594 389,616
Other Income 15,251 13,995
Total Revenues 95,845 403,611
Profit before Depreciation & Tax 41,425 21,128

Less: Depreciation & amortisation 23,101 22,557
(Including charge on retirement of fixed assets)
Profit/(Loss) before taxation 18,324 (1,429)
Less: Taxation 2,428 207
Net Profit/(Loss) after Taxation 15,896 (1,636)
Add/(Less): Balance brought forward from previous year (92,867) (91,231)
Balance carried forward (76,971) (92,867)
Dividend
Your Company wishes to strengthen its financial position and as such no dividend is recommended for the year.
Operations
Your Company has achieved a profit after tax of Rs. 15.8 million for the year against a loss of Rs. 1.6 million of previous year.
Your company has launched certain new stores during the year under review, taking its chain strength to 48 stores across the Country.
Crossword has also established its presence in Delhi in the current financial year.
Your Company has won the Retailer of the Year Award - Leisure (Books, Music and Gifts Category) at the Images Retail Awards 2007.
Share Capital
During the year under review, there has been no change in the authorised, issued and paid up share capital of the Company.
Fixed Deposits
Your Company has not accepted any fixed deposits and as such, no amount of principal or interest was outstanding as on the Balance
Sheet date.
Directors
In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. C.B. Navalkar and
Mr. Yasin Virani, Directors, retires by rotation at the ensuing Annual General Meeting and being eligible, offers themselves for
re-appointment.

Directors' Report Crossword Bookstores Ltd.
Comments on Auditor's Report

Goodwill, trademarks and copyrights amortised over 20 years. These assets are being amortised to revenue over a period of 20 years as
the future economic benefits from the assets will be realised over this period.

Pursuant to the requirement under Section 217 (2AA) of the Companies Act, 1956, the Board of Directors hereby state that:
2. We had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March, 2008 and of the profit of the
3. We had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;
4. We had prepared the accounts for the financial year ended 31 March, 2008 on a ‘going concern’ basis.
Auditors
Your Company’s Statutory Auditors, Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the ensuing
The Audit Committee and the Board of Directors recommends the re-appointment of Deloitte Haskins & Sells, Chartered Accountants,
as the Statutory Auditors of the Company.
Conservations of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The Particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of
Particulars in the report of Directors) Rules, 1988 with regard to Conservation of Energy, Technology absorption are not applicable to the
Company’s business. There was no Foreign Exchange Earnings during the year, where as Foreign Exchange outgo was Rs. 1.05 million.
Employees
None of the employees fall under the limits specified pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956, read
with the Companies (Particulars of Employees) Rules, 1975, as amended.
Audit Committee
The Audit Committee of the Company constituted under the provisions of Section 292A of the Companies Act, 1956, continues to facilitate
and contribute to the Board of Directors in their decision making and enhancing the credibility of the financial disclosures and in promoting
transparency.
The Audit Committee comprises of Mr. Ravi Raheja, as Chairman with Mr. C.B. Navalkar & Mr. Yasin Virani as members.
Acknowledgement
Your Directors express their gratitude to the Customers, Suppliers, employees and all stakeholders for their continuing support. We are
deeply grateful to Shopper’s Stop Ltd., the Holding Company, for the confidence and faith that they have reposed in us.
Mumbai B. S. Nagesh
24 April, 2008 Chairman

Auditors' Report Crossword Bookstores Ltd.
To,
The Members of Crossword Bookstores Limited
1. We have audited the attached Balance Sheet of Crossword Bookstores Limited, as at 31 March, 2008 and also the Profit and Loss
Account and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms of sub-section
(4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report that :
(b) In our opinion, proper books of account as required by law have been kept by the Company, so far as appears from our examination
of those books.
of account.
(d) Except as stated in paragraph (f) below, in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies
Act, 1956.
(e) On the basis of written representations received from the Directors, as on 31 March, 2008 and taken on record by the Board of
Directors, we report that none of the directors are disqualified as on 31 March, 2008 from being appointed as a director in terms
of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.
(f) Attention is invited to note 5 of the financial statements: Fixed Assets include Goodwill, Trademarks and Copyrights acquired by
the Company in an earlier year and whose aggregate carrying value in the books as on 31 March, 2008 is Rs. 85,967 thousands.
These assets are being amortised over a period of 20 years since in the opinion of the management the future economic benefits
from these assets will be realised atleast over this period. Accounting Standard 26 on Intangible Assets requires the depreciable
amount of such assets to be allocated over the best estimate of their useful lives, with a rebuttable presumption that the useful
lives of these assets will not exceed 10 years. We are unable to express an opinion whether the economic benefits from these
assets will continue to be realised beyond the 10 year period prescribed by the standard. This was also the subject matter of a
qualification in the previous year. Since the impact, if any, of not realising the benefits from these assets in future periods cannot
be quantified the accompanying financial statements of the current year and comparatives of the previous year have not been
adjusted.

Auditors' Report Crossword Bookstores Ltd.
Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the
accounts read together with accounting policies and notes thereon give the information required by the Companies Act, 1956, in
the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2008;
(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

P. B. Pardiwalla
Partner
Place : Mumbai
Date : 24 April, 2008

Annexure to the Auditors' Report Crossword Bookstores Ltd.
(Referred to in paragraph 3 of our report)
1. The nature of the Company’s business/activities during the year are such that the requirements of Items (i-c), (ii), (iii), (v), (vi), (viii),
(xi), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix) and (xx) of paragraph 4 of the Order are not applicable to the Company.
a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed
assets.
b) Some of the fixed assets were physically verified during the year by the management in accordance with a programme of
verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals. According to the
information and explanations given to us, no material discrepancies were noticed on such verification.
3. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of services
and goods. We have not observed any continuing failure to correct major weaknesses in such internal controls.
4. In our opinion, the internal audit function carried out during the year by firms of Chartered Accountants appointed by the management
is commensurate with the size of the Company and the nature of its business.
a) According to the information and explanations given to us, the Company has been generally regular in depositing undisputed
statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Sales-tax, Service tax, Customs duty, Excise
duty and any other material statutory dues with the appropriate authorities during the year.
b) According to the information and explanations given to us, there are no disputed demands for Sales tax, Income tax, Customs
duty, Excise duty, Cess, Service tax, which have not been deposited with the relevant statutory authority.
6. The accumulated losses of the company (without considering the effect of the unquantified qualification) do not exceed fifty percent
of the net worth of the company. The company has not incurred cash losses during the current and immediately preceding financial
year.
P. B. Pardiwalla
Partner
Place : Mumbai

Balance Sheet as at 31 March, 2008 Crossword Bookstores Ltd.
(All amounts in thousand of Indian Rupees)
Notes Mar-08 Mar-07

SOURCES OF FUNDS
SHAREHOLDERS’ FUNDS
Share Capital 3 195,625 195,625
Reserves and Surplus 4 131,382 131,382
327,007 327,007
FIXED ASSETS
Gross Block 5 288,073 293,839
Less : Accumulated depreciation 111,211 90,144
Net Block 176,862 203,695
Capital Work in progress (including capital advances) 424 —
177,286 203,695
Sundry Debtors 6 24,581 55,011
Cash and Bank Balances 7 32,540 1,315
Loans and Advances 8 45,688 33,124
102,809 89,450
Less : CURRENT LIABILITIES AND PROVISIONS 9
Current Liabilities 27,914 58,828
Provisions 2,145 177
30,059 59,005
Net Current Assets 72,750 30,445
PROFIT AND LOSS ACCOUNT 76,971 92,867

327,007 327,007
The accompanying Notes 1 to 23 are an integral part of the financial statements.
For Deloitte Haskins & Sells B. S. Nagesh C. B. Navalkar

Chartered Accountants Chairman Director
P. B. Pardiwalla
Partner
Place : Mumbai Neel Raheja Bharat Sanghavi
Date : 24 April, 2008 Director Company Secretary

for the year ended 31 March, 2008 Crossword Bookstores Ltd.

Notes Year ended Year ended
Mar-08 Mar-07
INCOME
Sales and Operating Revenues 10 80,594 389,616
Other income 11 15,251 13,995
95,845 403,611
EXPENDITURE
Cost of goods sold 12 46,388 330,746
Employee costs 13 2,555 14,039
Operating and administrative expenses 14 5,053 34,793
Interest and finance charges 15 424 2,905
Depreciation and Amortisation 2 (c) & 5 23,101 22,557
77,521 405,040
Profit/(Loss) Before Tax 18,324 (1,429)

Provision for tax (Refer note no 20) 2,428 207
Profit/(Loss) After Tax 15,896 (1,636)
Profit and loss account, beginning of the year (92,867) (91,231)
Profit and loss account, end of the year (76,971) (92,867)

Earnings Per Share (Equity shares, par value per share Rs. 10/-)
- Basic 1.66 (0.17)
- Diluted 19
The accompanying Notes 1 to 23 are an integral part of the financial statements.

P. B. Pardiwalla
Partner


Statement of Cash Flows for the year ended 31 March, 2008 Crossword Bookstores Ltd.

Mar-08 Mar-07
Net Profit/(Loss) Before Tax 18,324 (1,429)
Adjustments to reconcile profit before tax
Depreciation and amortisation 23,101 22,557
Interest and finance charges 424 2,905
Interest Income (824) (400)
Loss on sale/discard of fixed assets 35 3,234
Operating profit/(loss) before working capital changes 41,060 26,867
Changes in assets and liabilities
Decrease in inventories — 78,593
Decrease/(Increase) in sundry debtors 30,430 (13,853)
Increase in loans and advances (2,270) (5,044)
Decrease/(Increase) in current liabilities and provisions (31,028) (42,149)
Cash (used in)/generated from operations 38,192 44,414
Income Taxes Paid (10,639) (3,775)
Net cash (used)/generated for operating activities 27,553 40,639
Purchase of fixed assets (including capital work in progress) (627) (25,640)
Sale proceeds of fixed assets 3,900 —
Interest income 824 400
Net cash used for investing activities 4,096 (25,240)
Repayment of secured loans — (49,143)
Payment of interest and finance charges (424) (2,905)
Net cash (used)/generated for financing activities (424) (52,048)
Net (decrease)/increase in cash and cash equivalents 31,225 (36,649)
Net change in cash and cash equivalents
Cash and cash equivalents as at the end of the year 32,340 1,115
Cash and cash equivalents as at beginning of the year 1,115 37,964
31,225 (36,849)
Note :
Cash and Cash Equivalents as per Balance Sheet (see Note 7) 32,540 1,315
Less : Deposit under lien 200 200
Cash and Cash Equivalents after reducing deposit under lien 32,340 1,115
P. B. Pardiwalla
Partner

1. BACKGROUND
About the Company
Crossword Bookstores Limited (‘Crossword’ or ‘the Company’), was incorporated on 3 November 1999. The Company is a wholly
owned subsidiary of Shoppers’ Stop Limited (SSL).
Till 30 June 2006 the company was engaged in the business of retailing books and other items such as music, toys, stationery and
computer peripherals through departmental and concessionaire stores, operated either by itself or by franchisees. With effect from
1 July 2006 the Company has entered into an agreement with SSL in terms of which the business previously operated by itself is
now operated by SSL.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation of financial statements
The accompanying financial statements have been prepared under the historical cost convention, in accordance with Indian
Generally Accepted Accounting Principles and the provisions of the Companies Act, 1956.
(b) Use of Estimates
date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual figures
could differ from those estimated and differences between actual results and estimates are recognised in the periods in which
the results are known/materialise.
(c) Fixed assets and depreciation
Tangible Assets
Fixed Assets are stated at their original cost of acquisition less accumulated depreciation and impairment losses. Costs comprises
of all costs incurred to bring the assets to their location and working condition and includes all expenses incurred upto the date
of launching a new store, to the extent they are attributable to the new store.
Depreciation is provided, pro-rata to the period of use, by the straight line method (SLM), based on management’s estimate of
useful life of the fixed assets or at the SLM rates prescribed in Schedule XIV of the Companies Act, 1956 whichever is higher,
at the following annual rates:
Depreciation rates (%)

Furniture, fixtures and other equipment 10.00
Computers 20.00
Vehicles 20.00
Leasehold improvements are depreciated over the total period of lease, (including the renewal periods) or 20 years, whichever
is lower.
Assets costing less than Rs. 5,000 are depreciated @ 100%.
Intangible Assets
Intangible assets are stated at their cost of acquisition less accumulated amortisation and impairment losses. An intangible

The Company capitalizes software and related implementation costs, where it is reasonably estimated that the software has an
enduring useful life.
Trademarks, Copyrights and Goodwill are amortized uniformly over a period of 20 years.
Software is depreciated over management estimate of it’s useful life of 5 years.
loss account.
(d) Inventories
Inventories are measured at the lower of cost and net realisable value. Cost of inventories comprises all costs of purchase and
other costs incurred in bringing the inventories to their present location and condition. Cost is determined by the weighted
average cost method.
(e) Revenue recognition
Revenue is recognised when it is earned and no significant uncertainty exists as to it’s realization or collection.
Sale of merchandise is recognised on delivery to franchisees, 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 sales returns,
discounts, sales tax and Value Added Tax.
Franchisee income is recognised in accordance with the rates specified in the franchisee agreements and is based on the sales
recorded by the franchisees for the year.
(f) Employee benefits
Short term employee benefits which are payable within twelve months after the end of the period in which the employees render
service are measured at cost.
recognised as expenses when employees have rendered service entitling them to the contributions.
Gratuity and leave encashment costs (defined benefit plans) are determined using the Projected Unit Credit Method with actuarial
valuations being carried out by third party actuaries at each balance sheet date.
Gratuity and leave encashment benefit obligations recognised in the Balance Sheet represents the present value of the obligation
as adjusted for past service cost and as reduced by the fair value of plan assets. Actuarial gains and losses are recognised
(g) Foreign currency transactions
Transactions in Foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.
Foreign currency denominated assets and liabilities (monetary items) are translated into rupees at the exchange rates prevailing
at the date of the balance sheet.

Exchange differences arising on settlement of foreign currency transactions or restatement of foreign currency denominated
assets and liabilities (monetary items) are recognised in the Profit and Loss Account.
(h) Operating Lease
Operating lease payments are recognised as expenditure in the profit and loss account on a straight-line basis, which is
representative of the time pattern of benefits received from the use of the assets taken on lease.
(i) Income Tax
Income tax is accounted for in accordance with Accounting Standard 22 on “Accounting for Taxes on Income”. Tax comprises
both current and deferred tax (See note 20).
Current tax is measured at the amount expected to be paid to/recovered from the taxation authorities, using applicable tax rates
and tax laws.
Fringe Benefit Tax (FBT) payable under the provisions of Section 115WC of the Income-tax Act, 1961 is in accordance with the
Guidance Note on Accounting for Fringe Benefits Tax issued by the ICAI regarded as an additional income tax and considered in
determination of the profits for the year.
(j) Cash flow statement
presents the cash flows by operating, investing and financing activities of the company.
(k) Earnings per share
The Company reports Basic Earnings Per Share (EPS) in accordance with Accounting Standard 20 on Earnings Per Share. Basic
Earnings is computed by dividing the profit or loss for the year by the weighted average number of shares outstanding during
the year.
(l) Contingent Liabilities

Mar-08 Mar-07
3. SHARE CAPITAL
Authorised:
10,000,000 equity shares of Rs.10/- each 100,000 100,000
10,000,000 redeemable preference shares of Rs.10/- each 100,000 100,000
200,000 200,000
Issued and Subscribed:

9,562,500 equity shares of Rs.10/- each fully paid up 95,625 95,625
10,000,000 5.5% cumulative redeemable preference shares of Rs.10/- each fully paid up 100,000 100,000
redeemable on or before November 29, 2012 195,625 195,625
The entire share capital is held by Shopper's Stop Limited, the holding company

Securities Premium account
Balance as per last Balance sheet 131,382 131,382
131,382 131,382

5. FIXED ASSETS
(All amounts in thousands of Indian Rupees)
GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK

Description 1 April Additions Deductions 31 March 1 April For the year Deductions 31 March 31 March 31 March
2007 2008 2007 2008 2008 2007

TANGIBLE ASSETS
Leasehold improvements 55,424 184 5,096 50,513 8,856 4,477 1,869 11,465 39,048 46,568
Furniture, fixtures and other equipments 54,770 - 874 53,896 14,485 5,374 165 19,694 34,202 40,285
for the year ended 31 March, 2008
Computers 22,094 - - 22,094 13,932 2,505 - 16,437 5,657 8,163

Vehicles 774 - - 774 161 152 - 313 461 613
Total 133,062 184 5,970 127,277 37,434 12,509 2,034 47,909 79,368 95,628
INTANGIBLE ASSETS
Goodwill 1,648 - - 1,648 575 82 - 657 991 1,073
Trademarks and patents 141,625 - - 141,625 49,569 7,081 - 56,649 84,976 92,056
Software 17,504 19 - 17,523 2,567 3,429 - 5,996 11,527 14,937
Total 160,777 19 - 160,796 52,710 10,592 - 63,302 97,494 108,067
Grand Total 293,839 203 5,970 288,073 90,144 23,101 2,034 111,211 176,862 203,695
Previous year 248,186 51,037 5,383 293,839 69,738 22,557 2,150 90,144 203,695
Note:
The Company acquired its present business, during the year ended 31 March 2000, which included the acquisition of certain intangible assets, namely, goodwill,trademarks and copyrights relating
to the business. These assets were recorded at a gross book value of Rs.143,273 thousand and amortised over a 20 year period, since the management believes that future economic benefits from
these assets will be realized over several years.
Crossword Bookstores Ltd.
Mar-08 Mar-07
6. SUNDRY DEBTORS
(Unsecured)
Debts outstanding for more than six months
– considered good 1,377 1,039
– considered doubtful 150 150
1,527 1,189
Less: Provision for doubtful debts (150) (150)
1,377 1,039
Others (considered good) 23,204 53,972
24,581 55,011
Out of the above:
– Considered good 24,581 55,011
– Considered doubtful 150 150
24,731 55,161
Cash on hand
Balances with scheduled banks: 13 155
– in current accounts 32,327 960
– in fixed deposits (over which bank has lien) 200 200
32,540 1,315
(Unsecured)
Loan to Holding Company 11,000 —
Advance to Suppliers — 5,317
Advances recoverable in cash or in kind or for value to be received
– Prepayments 190 250
– Premises and other deposits 16,557 21,496
– Loans to employees 10 10
– Direct taxes paid 15,688 5,048
– Others 2,243 2,640
45,688 34,761
Less: Provision for doubtful advances — 1,637
45,688 33,124
Out of the above:
– Considered good 45,688 33,124
– Considered doubtful — 1,637
45,688 34,761

Mar-08 Mar–07
Current Liabilities (Refer Note below)
Creditors
– Trade 1,797 32,012
– Others 6,997 13,756
Franchisee and Other deposits received 18,611 12,115
Statutory liabilities 509 945
27,914 58,828
Provisions
Provision for gratuity 30 121
Provision for leave encashment 32 56
Provision for Income Tax 2,083 —
2,145 177
Note: The company has not received any intimation from the "Suppliers" under the
Micro Small & Medium Enterprise Development Act, 2006 and therefore disclosures
if any, relating to amounts unpaid as at the year end together with interest
paid/payable as required under the said Act have not been given.
10. SALES AND OPERATING REVENUES

Retail Sales
Sales (Including Sales to Franchise) 46,755 369,003
Less: VAT — 2,358
Sales Net of VAT (Including Sales to Franchise) 46,755 366,645
Income from franchisees 33,839 21,531
Income from advertisement displays and conducting agreements — 1,440
80,594 389,616
11. OTHER INCOME
Interest on fixed deposits with banks and others (Gross) 824 400
[Tax deducted at source Nil (Previous year Rs. 28 thousands)]
Recovery for use of assets 11,752 10,198
Miscellaneous incomes/credits 600 937
Excess Provision written back 2,075 2,460
15,251 13,995
Opening stock — 78,593
Less: VAT Credit available on Opening Stock — —
— 78,593
Add: Purchases (Including Franchise Purchase) 46,388 252,153
Less: Closing stock — —
46,388 330,746
13. EMPLOYEE COSTS
Salaries, allowances and bonus 2,279 12,281
Contribution to provident and other funds 223 1,385
Staff welfare expenses 53 373
2,555 14,039

Mar-08 Mar-07
Business conducting fees — 10,963
Lease rent — 1,047
Rates and taxes 44 292
Insurance 232 570
Repairs and maintenance :
Building — 2,432
Machinery 1,198 1,550
Others 23 29
Legal and professional charges 1,253 1,508
Payment to auditors :
Audit fees 500 550
Tax Audit fees 10 10
Electricity expenses — 2,150
Security charges — 751
Printing and stationery 42 771
Communication expenses — 1,083
Travelling and conveyance 104 479
Commission on credit cards sales — 461
Publicity and business promotion 62 4,758
Sales tax 733 —
Bad debts and doubtful advances written off 461 94
Loss on sale/discard of fixed assets 35 3,234
Miscellaneous expenses 356 2,061
5,053 34,793

Interest on loans :
Term loan — 1,248
Overdraft — 408
Bank charges 424 1,249
424 2,905
16. CONTINGENT LIABILITIES
Arrears of fixed cumulative dividend on Preference Shares 12,572 7,072

Mar-08
17. EMPLOYMENT AND RETIREMENT BENEFITS

Company’s contribution to provident fund 167
Defined benefit schemes – Gratuity
a) Liability recognised in Balance Sheet
Charge in Benefit Obligation
Present value of obligations
As at 1 April 2007 115
Service cost 16
Interest cost 5
Actuarial loss on obligations 32
Benefits paid (138)
As at 31 March 2008 30
Less: Fair value of plan assets
As at 1 April 2007 215
Expected Return on plan assets less loss on investment 12
Employers Contribution 0
Benefits paid (138)
Actuarial gain on plan assets (12)
b) Expenses during the period

Service cost 16
Interest cost 5
Actual Return on plan assets 43
Expected Return on plan assets (12)
Actuarial Loss on obligations —
52
c) Principal actuarial assumptions

Rate of discounting 8.00%
Rate of return on plan assets 8.00%
Rate of increase in salaries 5.00%
This being the first year of adoption of Revised Accounting Standard 15 on Employee Benefits, hence comparative figures are
not given.

Mar-08 Mar-07
18. EXPENDITURE IN FOREIGN CURRENCY

Professional fees 584 292
Software Licences & maintenance — 7,029
Value of traded merchandise 465 2,575
Award money — 52
19. EPS -CALCULATED AS FOLLOWS:
Particulars
(i) Profit/ (Loss) attributable to Equity
Shareholders (Rs. in ‘000) 15,896 (1,636)
(ii) Number of Equity Shares outstanding
during the year 9,562,500 9,562,500
(iii) Nominal Value per share 10 10
(iv) Earning per Share
Basic (Rs.) 1.66 (0.17)
Note: There is no dilution to basic EPS as there were no outstanding
dilutive potential equity shares.
20. TAX CHARGE
The tax expense for the year comprises of :
Income Tax
- Current tax 2,083 —
- Fringe Benefit Tax 345 263
- Short Provision of tax of earlier year — (56)
2,428 207
The Company has not recognised deferred tax assets in respect of unabsorbed depreciation and carried forward losses on consideration
of prudence in line with the Accounting Standard 22 on 'Accounting for Taxes on Income'.

The company is primarily engaged in the business of retail trade through own and franchisee store facilities, which in the context of
AS 17 on ‘Segment Reporting’ constitutes a single segment.


Following are the transaction with related parties
Nature Company under Key

Holding the same Management Total
Company Management Associates Personnel
Sale of Merchandise
Shopper’s Stop Limited — — — — —
(93,858) — — —- (93,858)
Payment of conducting fees/
Lease Rent
Upasna Trading Limited — — — — —
Inorbit Malls (India) Private Limited — — — — —
(4,102) (219) (804) — (5,125)
Commission
(134) — — — (134)
Expenses Paid
(2,356) (1,099) (1,464) — (4,920)
Income Received 31,890 — — — 31,890
Shopper’s Stop Limited 31,890 — — — 31,890
(18,282) — — — (18,282)
Advances / Lease Deposit
(11,682) — — — (11,682)
Remuneration
R Sriram — — — — —
Kumar Rajagopalan — — — — —
— — — (1,918) (1,918)
Directors Sitting Fees — — — — —
— — — (8) (8)
Balance outstanding at the
year end
Payables 577 — — 577
(17,835) (577) — — (18,412)
Receivables 20,404 — — — 20,404
Shopper's Stop Ltd. 20,404 — — — 20,404
— — — — —
The figures in bracket pertain to previous year.
Holding Company : Shopper’s Stop Limited
Company under the same management : Upasna Trading Limited
Associates : Inorbit Malls (India) Private Limited
Key Management Personnel : R Sriram, Kumar Rajagopalan
23. COMPARATIVES
Comparative financial information (i.e. the amounts and other disclosures of the preceding year) presented above is included as an
integral part of the current year's financial statements, and is to be read in relation to the amounts and the disclosures relating to
the current year. Figures of the previous year are regrouped and reclassified wherever necessary to correspond to the figures of the
current year.

Company's General Business Profile Crossword Bookstores Ltd.
I. Registration Details :
Registration No. 1 1 – 1 2 2 5 2 8 State Code 1 1

II. Capital raised during the year (Amount in Rs. Thousands) :
Public Issue Rights Issue
– – – – – –
– – – – – –
III. Position of Mobilisation and Deployment of Funds (Amounts in Rs. Thousands) :
3 2 7 0 0 7 3 2 7 0 0 7
Sources of Funds
Paid-up Capital Reserves & Surplus
1 9 5 6 2 5 1 3 1 3 8 2
Secured Loans Unsecured Loans
N I L N I L
1 7 7 2 8 6 N I L
Net Current Assets Misc. Expenditure
7 2 7 5 0 N I L
Accumulated Losses
7 6 9 7 1
IV. Performance of Company (Amount in Rs. Thousands) :
9 5 8 4 5 7 7 5 2 1
+ 1 8 3 2 4 + 1 5 8 9 6
1 . 6 6 – – %
V. Generic Names of Three Principal Products/Services of Company (as per Monetary Terms) :
Product Description

Product Description

Product Description

Directors' Report Upasna Trading Ltd.
To The Members,
Your Directors are pleased to present the Annual Report on the business and operations of the Company together with the audited
statements of accounts for the year ended 31 March, 2008.
(Rs. ‘000)

31 March, 2008 31 March, 2007
Income (Operating Revenues) 101,351 83,329
Other Income – 53
Less : Depreciation 642 762
Profit before taxation 3,532 3,923
Less : Taxation 417 438
Profit after Taxation 3,115 3,485
Add/(Less) : Balance brought forward from previous year (4,792) (8,277)
Dividend
Your Directors do not recommend dividend for the year due to inadequacy of profits.
Share Capital
During the year under review there has been no change in the authorised, issued and paid up share capital of the Company.
Fixed Deposits
Your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as on the Balance
Sheet date.
Directors
In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. Yasin Virani, Director
retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.


Directors' Report Upasna Trading Ltd.
Auditors
The Board of Directors recommends the re-appointment of Deloitte Haskins & Sells, Chartered Accountants, as the Statutory Auditors of
the Company.
Other Information
Information in accordance with Section 217(1)(e) of the Companies Act, 1956, relating to Conservation of Energy, Technology Absorption
are not applicable to the Company’s business. Your Company does not have any Foreign Exchange Earnings and Outgo. None of the
employees fall under the limits specified pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975, as amended.
Acknowledgement
We are deeply grateful to Shopper’s Stop Ltd., the Holding Company, for the confidence and faith that they have reposed in us.
Mumbai B. S. Nagesh

Auditors' Report Upasna Trading Ltd.
To,
The Members of Upasna Trading Limited
1. We have audited the attached Balance Sheet of Upasna Trading Limited, as at 31 March, 2008 and also the Profit and Loss Account
and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating
the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms of sub-section
(4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs
4 and 5 of the said Order.
a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the
b) In our opinion, proper books of account as required by law have been kept by the Company, so far as appears from our examination
of those books.
c) The Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report are in agreement with the books
of account.
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.
e) On the basis of written intimations received from the Directors as at 31 March, 2008 and taken on record by the Board of Directors,
we report that none of the directors are disqualified from being appointed as a director as on 31 March, 2008 in terms of Clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to the explanations given to us, the accounts read together with
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2008;
(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
For Deloitte Haskins & Sells

P. B. Pardiwalla
Partner
Place : Mumbai

Annexure to the Auditors' Report Upasna Trading Ltd.
1. The nature of the Company’s business/activities for the year are such that the requirements of items (i-c), (ii), (iii), (v), (vi), (viii), (xi),
(xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii), (xix) and (xx) of paragraph 4 of the Order are not applicable to the Company.
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed
assets.
(b) The management has physically verified the fixed assets during the year. No material discrepancies were noted on such
verification.
3. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business for the purchase of fixed assets and for the sale of services. The nature of
the Company’s activities is such that there is no purchase of inventory or sale of goods. We have not observed any major weakness
in internal controls or a consequent continuing failure to correct such weakness.
4. In our opinion, the internal audit function carried out during the year by a firm of Chartered Accountants appointed by the holding
company, which also covers the operation of this company is commensurate with the size of the Company and the nature of its
business.
5. In respect of Statutory dues:
(a) According to the information and explanations given to us, the Company has been regular in depositing undisputed statutory
dues including Income-tax, Sales-tax, Service-tax, Cess and any other material statutory dues with the appropriate authorities
during the year.
(b) There are no disputed Income Tax, Sales Tax, Service Tax and Cess which have not been deposited with the relevant
authorities.
6) The accumulated loss of Rs. 1,677 thousands as at 31 March, 2008 is in excess of fifty percent of the Company’s net worth. The
Company has not incurred cash losses during the current and immediately preceding financial year.
7) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the

P. B. Pardiwalla
Partner
Place : Mumbai

Balance Sheet as at 31 March, 2008 Upasna Trading Ltd.
Notes Mar-08 Mar-07

SOURCES OF FUNDS
Share capital 3 500 500
LOAN FUND
Unsecured loans
Current account with holding company — 12,322
500 12,822
FIXED ASSETS 4
Gross Block 8,516 8,516
Less: Accumulated Depreciation 7,171 6,528
Net Block 1,345 1,988
Sundry Debtors 5 3,457 577
Cash and bank balances 6 747 1,332
Loans and advances 7 13,673 19,308
17,877 21,217
LESS : CURRENT LIABILITIES

Current Liabilities 8 20,399 15,175
20,399 15,175
Net Current (Liabilities)/Assets (2,522) 6,042
PROFIT & LOSS ACCOUNT 1,677 4,792
500 12,822
For Deloitte Haskins & Sells Govind Shrikhande
Chartered Accountants Director
P. B. Pardiwalla C.B. Navalkar

Partner Director
Place : Mumbai

for the year ended 31 March, 2008 Upasna Trading Ltd.
Notes Mar-08 Mar-07

INCOME
Operating revenues 9 101,351 83,329
Other income 10 — 53
101,351 83,382
EXPENDITURE
Operating and Administrative expenses 11 97,177 78,697
Depreciation 642 762
97,819 79,459
PROFIT BEFORE TAX 3,532 3,923

Provision for tax - Current Income Tax 417 438
PROFIT AFTER TAX 3,115 3,485
PROFIT AND LOSS ACCOUNT, at the beginning of the year (4,792) (8,277)
PROFIT AND LOSS ACCOUNT, at the end of the year (1,677) (4,792)
Earnings Per Share (Par Value Rs.100)

-Basic 622.90 697.01
-Diluted (Refer Note 13 to the Financials Statements)

Partner Director
Place : Mumbai

Statement of Cash Flows for the year ended 31 March, 2008 Upasna Trading Ltd.

Mar-08 Mar-07
Net profit before tax 3,532 3,923
Adjustments for :
Depreciation 642 762
Interest income — (25)
Operating profit before working capital changes 4,174 4,660
Increase in Sundry debtors (2,880) (109)
Decrease in Loans and Advances 7,899 14,418
Increase in current liabilities and provisions 5,224 5,698
Cash generated from operations 14,417 24,667
Income taxes paid (2,680) (1,919)
Net cash from operating activities 11,737 22,748

Interest income — 25
Net cash from investing activities — 25

Repayment of unsecured loans (12,322) (23,596)
Net cash used for financing activities (12,322) (23,596)
Net decrease in cash and cash equivalents (585) (823)

Cash and cash equivalents as at the end of the year 747 1,332
(585) (823)

Partner Director
Place : Mumbai

Significant Accounting Policies and Notes to the
Financial Statements for the year ended 31 March, 2008 Upasna Trading Ltd.
1. BACKGROUND
a) About the Company
Upasna Trading Limited (“the Company”) was incorporated on 8 December, 1995. The Company is a wholly owned subsidiary
of Shopper's Stop Limited (SSL). The main activity of the Company is to supervise the distribution and logistics operations of
group companies, for which it earns service fees.
b) Operational outlook
As at 31 March, 2008 the Company had accumulated losses of Rs.1,677 thousands which exceeds the shareholders’ funds of
Rs.500 thousand as at that date. However the company has started making profits.
The Company’s operations are entirely dependent on its holding company SSL. SSL has committed to provide the necessary
level of financial support to the Company to enable it to operate. Accordingly, these financial statements have been prepared
assuming that the Company will continue as a going concern and do not therefore, include any adjustments relating to the
recoverability and classification of asset amounts or the amounts and classification of liabilities that might result, should the
Company be unable to continue as a going concern.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements have been prepared under the historical cost convention in accordance with Indian
Generally Accepted Accounting Principles and the provisions of the Companies Act, 1956.
b) Use of estimates
the results are known / materialize.

Fixed assets are stated at their original cost of acquisition, less accumulated depreciation. Cost comprises of all costs incurred
to bring the assets to their location and working condition. Depreciation is provided, pro rata to 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 Companies Act, 1956, whichever is higher, at the following annual rates:
Depreciation rate (%)
Air Conditioner 5.00

Furniture fixtures and Other equipment 10.00
Computers 20.00
Assets costing less than Rs. 5,000 are depreciated at 100%
d) Revenue Recognition
Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection.
Service Fees are recognized when the service is performed, in accordance with contractual obligations.
e) Income Taxes
Income taxes are accounted for in accordance with Accounting Standard on Accounting for Taxes on Income. Taxes comprise

Significant Accounting Policies and Notes to the
Financial Statements for the year ended 31 March, 2008 Upasna Trading Ltd.
Current tax is measured at the amount expected to be paid to/recovered from the taxation authorities, using applicable tax rates
and tax laws.
substantively enacted tax rates and tax regulations. 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 realised.
The Company has not recognised deferred tax assets in respect of unabsorbed depreciation and carried forward losses on
consideration of prudence in line with the Accounting Standard.
f) Operating Lease
Operating Lease payments are recognised as expenditure in the profit and loss account on a straight line basis, which is
representative of the time pattern of benefit received from the use of the assets taken on lease.
g) Earnings Per Share

The Company reports Earnings Per Share (EPS) in accordance with Accounting Standard on Earnings Per Share. Basic EPS is
computed by dividing net profit or loss for the year by the weighted average number of Equity Shares outstanding during the
year.
h) Cash Flow Statement

The Cash Flow Statement is prepared by the indirect method set out in Accounting Standard on Cash Flow Statements and
presents the cash flows by operating, investing and financing activities of the company. Cash and cash equivalents presented
in the Cash Flow Statement consist of cash on hand and demand deposits with bank.
i) Contingent Liabilities
disclosed by way of note to accounts. Provision is made if it becomes probable that an outflow of future economic benefits will
be required for an item previously dealt as contingent liability.

Mar-08 Mar-07
3. SHARE CAPITAL
Authorised:
5,000 equity shares of Rs.100/- each 500 500
5,000 equity shares of Rs. 100/- each fully paid-up 500 500
All the above shares are held by Shopper's Stop Limited (SSL) the holding company.
4. FIXED ASSETS
Description 1 April, 2007 Addition Deduction 31 March, 1 April, 2007 For the year 31 March, 31 March, 31 March,
2008 2008 2008 2007
Air Conditioners 177 — — 177 61 9 70 107 116
Furniture, fixtures and 6,329 — — 6,329 4,458 633 5,091 1,238 1,872
other equipments
Computers 2,010 — — 2,010 2,010 — 2,010 — —
Total 8,516 — — 8,516 6,528 642 7,171 1,345 1,988
31 March 2007 8,516 — — 8,516 5,766 762 6,528 1,988 —
5. SUNDRY DEBTORS Mar-08 Mar-07

(Unsecured, Considered good)
Debts outstanding for more than 6 months 3,457 577
3,457 577
Amounts due from company under the same management within

the meaning of Section 370 (1B) of the Companies Act, 1956
Crossword Bookstores Limited 577 577
Maximum amount outstanding during the year 577 577

Cash on hand 2 2
Balances with scheduled banks :
- In Current Accounts 745 1,330
747 1,332

Mar-08 Mar-07
(unsecured and considered good)
Advances recoverable in cash or in kind or for value to be received 1,183 934
Security Deposit 2,469 8,524
Service tax receivable 85 127
Sales tax (paid under protest/claims) 4,983 7,035
Direct Tax Paid (net of provision) 4,953 2,688
13,673 19,308
Sundry Creditors 20,189 15,083

Statutory Liabilities 210 92
20,399 15,175
9. OPERATING REVENUES
Service Fees 101,351 82,454

Rent Income — 875
101,351 83,329
10. OTHER INCOME
Interest
From Bank and others — 25
Miscellaneous Income/Credits — 28
— 53
Clearing and forwarding charges 96,551 77,624
Rates and taxes 161 8
Legal and professional charges 225 801
Payment to Auditors (excluding service Tax):
- Audit Fees 240 209
Bank Charges — 46
Miscellaneous Expenses — 9
97,177 78,697

Mar-08 Mar-07
12. Contingent Liabilities in respect of Sales tax disputed in appeal 919 4,347
13. EARNING PER SHARE:

• Profit attributable to Equity Shareholders (Rs. ’000) 3,115 3,485
• Number of Equity Shares outstanding during the year 5,000 5,000
• Nominal value per Share 100 100
• Earnings Per Share Basic (Rs.) 622.90 697.01
Note: There is no dilution to the Basic EPS as there were no outstanding dilutive
potential equity shares.
14. The company operates in a single business and geographical segment.
15. Prior Period Items

Prior Period Expenses - Clearing and Forwarding Charges — 4,543
Prior Period Income - Service Fees — 4,543
16. Operating Lease Rental charged to revenue :

31 March, 2008 31 March, 2007
Distribution Centre 16,550 29,773
The agreements are executed for a period ranging from 12 months to 36 months with a renewable clause and also provide for
termination at will by either party giving a prior notice period of 3 months.
17. Tax Charges :

31 March, 2008 31 March, 2007
Income Tax 417 439

Excess provision of tax for earlier years — (1)
417 438


Following are the transaction with related parties (All amounts in thousand of Indian Rupees)
Nature Holding Company under Total

the same
Management
Service Charges Paid
Shopper's Stop Services Ltd. — 120 120
(—) (120) (120)
Rent received
Crossword Bookstores Limited — — —
Shopper’s Stop Limited — — —
(656) (219) (875)
Expenses recovered
Shopper's Stop Limited 96,551 — 96,551
(76,554) (1,069) (77,623)
Service Charges Income
(4,800) (30) (4,830)
Loan Repaid
(23,596) (—) (23,596)
Balance outstanding at the year end
Payable
Shopper's Stop Services Limited 205
(88)
Receivables
Shopper's Stop Limited 2,880
(12,322)cr.
Crossword Bookstores Limited 577
(577)
Holding Company : Shopper's Stop Limited.
Company under the same management : Shopper's Stop Services Limited and
Crossword Bookstores Limited
19. The Company has not received any intimation from the “suppliers” under the Micro Small and Medium Enterprises Development
Act, 2006 and therefore disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as
required under the said Act have not been given.
20. COMPARATIVES
Comparative financial information (i.e. the amounts and other disclosures for the preceding year) presented above, is included as an
integral part of the current period’s financial statements, and is to be read in relation to the amounts and other disclosures relating
to the current year. Figures of the previous year have been regrouped / reclassified wherever necessary to correspond to figures of
the current year.

Company's General Business Profile Upasna Trading Ltd.
Registration No. 1 1 – 9 5 1 1 5 State Code 1 1

– – – – – –
– – – – – –
5 0 0 5 0 0
Sources of Funds
5 0 0 – – –
– – – – – –
1 3 4 5 – – –
(-) 2 5 2 2 – – –
Accumulated Losses
1 6 7 7
1 0 1 3 5 1 9 7 8 1 9
+ 3 5 3 2 + 3 1 1 5
6 2 2 . 9 0 – – %
Product Description

Product Description

Product Description
Govind Shrikhande C.B. Navalkar

Director Director
Place : Mumbai.
Dated : 24 April 2008

Directors' Report Shopper's Stop.Com (India) Ltd.
To The Members,
Your Directors hereby present the Seventh Annual Report on the business and operations of the Company together with the audited
statements of accounts for the year ended March 31, 2008.
Amount in Rupees

March 31, 2008 March 31, 2007
Other Income – –
Total Revenues – –
Loss before Depreciation & Tax (36,278) (9,921)
Less: Depreciation – –
Loss before Taxation (36,278) (9,921)
Less : Taxation – _
Loss after Taxation (36,278) (9,921)
Balance brought forward from previous year (49,223) (39,302)
Dividend
Your Directors do not recommend dividend on account of loss incurred by the Company.
Share Capital
During the year under review there has been no change in the authorised, issued and paid up share capital of the Company.
Fixed Deposits
Sheet date.
Directors

and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March, 2008 and of the loss of the

Directors' Report Shopper's Stop.Com (India) Ltd.
Auditors
Your Company’s Statutory Auditors, Dixit Dattatray & Associates, Chartered Accountants, Mumbai, retire at the conclusion of the ensuing
Annual General Meeting and have sought the re-appointment.
The Board of Directors recommends the re-appointment of Dixit Dattatray & Associates, Chartered Accountants, as the Statutory Auditors
of the Company.
Other Information
Acknowledgement
Mumbai B. S. Nagesh

Auditors' Report Shopper's Stop.Com (India) Ltd.
To,
The Shareholders of Shopper's Stop.Com (India) Limited
1. We have audited the attached Balance Sheet of Shopper’s Stop.Com (India) Limited as at 31st March, 2008 and also the Profit and
Loss Account & Cash Flow of the Company for the year ended on that date annexed thereto. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our
audit.
3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Company Law Board in terms of Section 227 (4A) of the
Companies Act, 1956, we annex hereto a Statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Though the Company has stopped its operations since February 2001, the accounts for the year have been prepared on going
concern basis for reason stated in Note (2) of Schedule 6.
5. Further to our comments in the Annexure referred to above, we report that :
b) In our opinion, proper books of account as required by law have been kept by the Company so far, as appears from our
examination of books.
c) In our opinion, the Balance Sheet and the Profit & Loss Account and 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, 1956 and are in agreement
with the books of account.
d) On the basis of the written representations received from the Directors as on 31st March, 2008 and the information and
explanations given to us, we report that none of the directors are disqualified as on 31st March, 2008 from being appointed as
directors in terms of Section 274(1)(g) of the Companies Act, 1956.
e) In our opinion and to the best of our information and according to the explanations given to us, the accounts give the information
required by the Companies Act, 1956, in the manner so required and give a true and fair view :
i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2008; and
ii) in the case of the Profit and Loss Account, of the Loss for the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.
For Dixit Dattatray & Associates

D. B. Dixit
Place : Mumbai Proprietor
Date : 4 April, 2008 Membership No. 40032

Annexure to the Auditors' Report Shopper's Stop.Com (India) Ltd.
(Referred to in Para 3 of our report of even date)

As required by the Companies (Auditor’s Report) Order, 2003, on the basis of such checks as we considered appropriate, we
report that:
1. The Company does not own any Fixed Assets as at 31st March, 2008. Hence, the question of maintaining proper fixed assets record
and physical verification of fixed assets does not arise.
2. The Company did not have any inventory as at 31st March, 2008.
3. The Company has neither granted nor taken any loans secured or unsecured to/from companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
4. There are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods.
5. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act,
1956 and the rules framed there under.
6. Clause 4 (vii) of the Companies (Auditor's Report) Order, 2003 regarding the adequacy of internal audit system is not applicable to
the Company.
7. Clause 4 (viii) pertaining to the maintenance of cost records under Section 209(1) (d) of the Companies Act, is not applicable to
the Company.
8. The Company did not have any employee during the year and hence depositing of the Employees' State Insurance and Provident Fund
does not arise.
9. According to the books and records examined by us and the information and explanations given to us, there were no undisputed
amounts payable in respect of Income tax, Wealth-tax, Sales tax, Customs duty and Excise duty which have remained outstanding
as at 31st March, 2008 for a period exceeding six months from the date they became payable.
10. The Company has not taken any loans from financial institution or bank or debenture holder.
11. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under
Section 301 of the Act.
12. According to the information and explanations given to us and the records of the Company examined by us, no fraud on or by the
Company has been noticed or reported during the period.

D. B. Dixit
Date : 4 April, 2008 Membership No. 40032

Balance Sheet as at 31 March, 2008 Shopper's Stop.Com (India) Ltd.
(All amounts in Indian Rupees)
Schedule Mar-08 Mar-07
SOURCES OF FUNDS
SHAREHOLDERS' FUNDS
Share capital 1 500,000 500,000
500,000 500,000
Cash and bank balances 2 8,404 8,998
Loans and advances 3 414,224 448,224
422,628 457,222
Less: CURRENT LIABILITIES AND PROVISIONS 4 8,129 6,445

Net current assets 414,499 450,777
PROFIT & LOSS ACCOUNT - DEBIT BALANCE 85,501 49,223

500,000 500,000
The accompanying Schedules 1 to 7 are an integral part of the financial statements.
As per our report of even date.
For Dixit Dattatray & Associates For Shopper's Stop.Com (India) Ltd.
Govind Shrikhande
Director
D. B. Dixit Chandrashekhar B. Navalkar

Proprietor Director
Place : Mumbai
Dated : 4 April, 2008

for the year ended 31 March, 2008 Shopper's Stop.Com (India) Ltd.
Schedule Year ended Year ended

Mar-08 Mar-07
INCOME
Sales and operating income
Other Income – –
– –
EXPENDITURE
Other Operating expenses
Administrative expenses 5 36,278 9,921
36,278 9,921
LOSS BEFORE TAX (36,278) (9,921)
PROVISION FOR TAX – –
LOSS FOR THE YEAR (36,278) (9,921)
Balance brought forward from previous year (49,223) (39,302)
BALANCE CARRIED TO BALANCE SHEET (85,501) (49,223)
The accompanying Schedules 1 to 7 are an integral part of the financial statements.
Govind Shrikhande
Director

Proprietor Director
Place : Mumbai

Statement of Cash Flows for the year ended 31 March, 2008 Shopper's Stop.Com (India) Ltd.
Mar-08 Mar-07

Net profit/(loss) before tax (36,278) (9,921)
Operating profit/(loss) before working capital changes (36,278) (9,921)
(Increase)/Decrease in Loans and Advances 34,000 4,091
Increase/(Decrease) in current liabilities and provisions 1,684 1,777
Cash generated from operations (594) (4,053)
Net cash from operating activities (594) (4,053)
Cash flows from investing activities – –
Cash flows from financing activities – –
Net decrease in cash and cash equivalents (594) (4,053)

(594) (4,053)
Govind Shrikhande
Director

Proprietor Director
Place : Mumbai

Schedule forming part of the Financial Statements Shopper's Stop.Com (India) Ltd.
Mar-08 Mar-07
1. SHARE CAPITAL
Authorised :
2,50,000 equity shares of Rs. 10/- each 2,500,000 2,500,000
Issued, Subscribed and paid up :
50,000 equity shares of Rs. 10/- each fully paid-up 500,000 500,000
(All the above shares are held by Holding
Company - Shopper's Stop Ltd. and its nominees)

Cash on hand 60 60
Balances with scheduled banks :
– Current accounts 8,344 8,938
8,404 8,998
3. LOANS AND ADVANCES (unsecured, considered good)

Advances recoverable in cash or kind or for value to be received 414,224 448,224
(Including Rs. 257,449 due from Holding Company)
414,224 448,224

Sundry creditors 5,115 3,431
Provision for tax 3,014 3,014
8,129 6,445
5. ADMINISTRATIVE EXPENSES
Auditors remuneration - Audit fees 10,104 6,736
Other administrative expenses 23,674 685
Profession tax 2,500 2,500
36,278 9,921

Schedule forming part of the Financial Statements Shopper's Stop.Com (India) Ltd.
6. NOTES FORMING PART OF ACCOUNTS FOR THE YEAR ENDED ON 31ST MARCH, 2008
SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Accounting :
The Company follows accrual system of accounts and the historical cost convention in accordance with the generally accepted
accounting practices. Revenue are recognised and expenses are accounted on accrual basis with necessary provision for all
known liabilities.
2. Operations of the Company have been closed in February 2001. However accounts have been prepared on going concern basis
as the Company proposes to restructure its operations.
3. Previous years figure have been regrouped/rearranged wherever necessary.

Following are the transaction with related parties during the Financial Year Ended 31st March, 2008
Nature Holding Associates Key Total
Management
Personnel
Loan Received Back

Shopper's Stop Limited 34,000.00 – – 34,000.00
(2,104.00) – – (2,104.00)
Balance outstanding at the year end 257,449.00 – – 257,449.00
(291,449.00) – – (291,449.00)
Names of related parties and description of relationship :
Holding Company : Shopper's Stop Limited
Associates : Upasna Trading Limited, Shopper's Stop Services (India) Limited, Crossword Bookstores
Ltd., Ivory Properties and Hotels Pvt. Ltd., K. Raheja Corp. Pvt. Ltd., Palm Shelter Estate
Development Pvt. Ltd., K.Raheja Pvt. Ltd., Inorbit Mall (India) Pvt. Ltd., Hypercity Retail
(India) Ltd., Gateway Multichannel Retail (India) Ltd., Nuance Group (India) Pvt. Ltd.,
Timezone Entertainment Pvt. Ltd.
Key Management Personnel : B.S. Nagesh, Yasin Virani, C.B. Navalkar, Govind Shrikhande

Company's General Business Profile Shopper's Stop.Com (India) Ltd.
I) Registration Details :
Registration No. 11-124178 State Code 11
Balance Sheet Date 31/03/2008
II) Capital Raised during the year (Rs. ‘000) :

Public Issue NIL Right Issue NIL
Bonus Issue NIL Private placement NIL
III) Position of mobilisation and development of funds (Rs. ‘000) :

Total Liabilities 500 Total Assets 500
Sources of Funds
Paid-up capital 500 Reserve & Surplus NIL
Secured Loans NIL Unsecured Loans NIL
Net Fixed Assets NIL Investments NIL
Net Current Assets 414 Misc. Expenditure NIL
Accumulated Losses 86
IV) Performance of Company :

Turnover (Including Other Income) — Total Expenditure 36
Profit/(Loss) Before Tax (36) Profit/(Loss) After Tax (36)
Earning Per Share in Rs. (0.73) Dividend NIL
V) Generic Names of Three Principal Products /Services of Company

(as per Monetary Terms)
Item Code No. : Not Applicable
Product Description : Not Applicable
As per our report of even date
For Shoppers’ Stop.Com (India) Ltd.
For Dixit Dattatray & Associates Govind Shrikhande

D.B. Dixit Chandrashekhar B. Navalkar

Proprietor Director
Mumbai

Directors' Report Shopper's Stop Services (India) Ltd.
To the members,
Your Directors hereby present the Seventh Annual Report on the business and operations of the Company together with the Audited
Statements of Accounts for the year ended March 31, 2008.
(Amount in Rupees)

31 March, 2008 31 March, 2007
Income (Service Charges) 660,000 660,000


Less: Depreciation — —
Profit before taxation 85,901 97,776

Less: Taxation (including short provision of earlier years) 29,206 43,225
Profit after Taxation 56,695 54,551
Add/(Less): Balance brought forward from previous year 185,953 131,402

Balance carried forward 242,648 185,953
Dividend
Your Directors do not recommend dividend for the year due to inadequacy of profits.
Share Capital
During the year under review there has been no change in the Authorised, issued and paid up share capital of the Company.
Fixed Deposits
Sheet date.
Directors


Directors' Report Shopper's Stop Services (India) Ltd.
Auditors
Your Company’s Statutory Auditors, Dixit Dattatray & Associates, Chartered Accountants, Mumbai, retire at the conclusion of the ensuing
Annual General Meeting and have sought the re-appointment.
The Board of Directors recommends the re-appointment of Dixit Dattatray & Associates, Chartered Accountants, as the Statutory Auditors
of the Company.
Other Information
Acknowledgement
Mumbai B. S. Nagesh

Auditors' Report Shopper's Stop Services (India) Ltd.
To,
The Members of Shopper's Stop Services (India) Ltd.
1. We have audited the attached Balance Sheet of Shoppers’ Stop Services (India) Ltd as at 31st March, 2008 and Profit and Loss Account
& Cash Flow of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of
3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Company Law Board in terms of Section 227 (4A) of the
Companies Act, 1956, we annex hereto a Statement on the matters specified in paragraphs 4 and 5 of the said Order.
b) In our opinion, proper books of account as required by law have been kept by the Company so far, as appears from our examination
of books.
c) In our opinion, the Balance Sheet and the Profit & Loss Account & 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, 1956 and are in agreement with the books
of account.
d) On the basis of the written representations received from the Directors as on 31st March, 2008 and the information and
explanations given to us, we report that none of the directors are disqualified as on 31st March, 2008 from being appointed as
directors in terms of Section 274(1)(g) of the Companies Act, 1956.
e) In our opinion and to the best of our information and according to the explanations given to us, the accounts give the information
required by the Companies Act, 1956, in the manner so required and give a true and fair view:
i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2008; and
ii) In the case of the Profit and Loss Account, of the Profit for the year ended on that date; and
iii) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

D.B. Dixit
Date : 4 April, 2008 Membership No. 40032.

Annexure to the Auditors' Report Shopper's Stop Services (India) Ltd.
(Referred to in paragraph 3 of the report of even date)
As required by the Companies (Auditor’s Report) Order, 2003, on the basis of such checks as we considered appropriate, we
report that:
1. The Company does not own any Fixed Assets as at 31st March, 2008. Hence, the question of maintaining proper fixed assets record
and physical verification of fixed assets does not arise.
2. The Company did not have any inventory as at 31st March, 2008.
3. The Company has neither granted nor taken any loans secured or unsecured to/from companies, firms or other parties covered in
the Register maintained under section 301 of the Companies Act, 1956.
4. There are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods.
5. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act,
1956 and the rules framed thereunder.
6. Clause 4 (vii) of the Companies (Auditors Report) Order, 2003 regarding the adequacy of internal audit system is not applicable to
the Company.
7. Clause 4 (viii) pertaining to the maintenance of cost records under Section 209(1) (d) of the Companies Act is not applicable to the
Company.
8. The Company did not have any employee during the year and hence depositing of the Employees State Insurance and Provident
Fund does not arise.
9. According to the books and records examined by us and the information and explanations given to us, there were no undisputed
amounts payable in respect of Income Tax, Wealth-tax, Sales Tax, Customs duty and Excise duty which have remained outstanding
as at 31st March, 2008 for a period exceeding six months from the date they became payable.
10. The Company has not taken any loans from financial institution or bank or debenture holder.
11. The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under
Section 301 of the Act.
12. According to the information and explanations given to us and the records of the Company examined by us, no fraud on or by the
company has been noticed or reported during the year.

D.B. Dixit
Date : 4 April, 2008. Membership No. 40032.

Balance Sheet as at 31 March, 2008 Shopper's Stop Services (India) Ltd.
(All amounts in Rupees unless otherwise stated)
Schedules Mar-08 Mar-07
SOURCES OF FUNDS
Share capital 1 500,000 500,000
Reserves & Surplus 242,648 185,953
742,648 685,953
Sundry debtors 2 215,931 98,999
Cash and Bank balances 3 35,025 15,814
Loans and Advances 4 643,814 734,656
894,770 849,469
Less: CURRENT LIABILITIES AND PROVISIONS 5 152,122 163,516
Net Current Assets 742,648 685,953
742,648 685,953
The accompaning schedules 1 to 9 are an integral part of the financial statements.
For Dixit Dattatray & Associates For Shopper's Stop Services (India) Ltd.
Govind Shrikhande
Director
Proprietor Director
Mumbai

for the year ended 31 March, 2008 Shopper's Stop Services (India) Ltd.
(All amounts in Rupees unless otherwise stated)
Schedules Mar-08 Mar-07
INCOME
Service Charges 660,000 660,000
660,000 660,000
EXPENDITURE
Operating Expenses 6 531,367 522,250
Administrative expenses 7 42,732 39,974
574,099 562,224
PROFIT BEFORE TAX 85,901 97,776
PROVISION FOR TAXATION 29,206 35,022
Short provision of tax for earlier years — 8,203
PROFIT AFTER TAX 56,695 54,551
Balance brought forward from previous year 185,953 131,402
BALANCE CARRIED TO BALANCE SHEET 242,648 185,953
The accompaning Schedules 1 to 9 are an integral part of the financial statements.
Govind Shrikhande
Director
Proprietor Director
Mumbai

Statement of Cash Flows for the year ended 31 March, 2008 Shopper's Stop Services (India) Ltd.
Mar-08 Mar-07
Net profit before tax 85,901 97,776
Operating profit before working capital changes 85,901 97,776
(Increase)/Decrease in Sundry debtors (116,932) 22,920

Increase/(Decrease) in Loans and Advances 61,637 (364,036)
Increase/(Decrease) in Current Liabilities and Provisions (11,395) 132,393
Cash generated from operations 19,211 (110,947)
Income taxes paid — —
Net cash from operating activities 19,211 (110,947)
Cash flow from investing activities — —
Cash flows from financing activities — —
Net decrease in cash and cash equivalents 19,211 (110,947)
19,211 (110,947)
Govind Shrikhande
Director
Proprietor Director
Mumbai

Schedules forming part of Financial Statements Shopper's Stop Services (India) Ltd.

Mar-08 Mar-07
1. SHARE CAPITAL
Authorised:
50,000 equity shares of Rs 10/- each 500,000 500,000
Issued:
50,000 equity shares of Rs 10/- each fully paid-up 500,000 500,000
Subscribed and paid up:

50,000 equity shares of Rs 10/- each fully paid-up 500,000 500,000
(All the above 50,000 shares are held by Holding
Company - Shopper’s Stop Ltd and its nominees)
2. SUNDRY DEBTORS
(Unsecured considered good)
Less than six months 215,931 98,999
215,931 98,999

Cash on hand 60 60
Current accounts 34,965 15,754
35,025 15,814

(Unsecured considered good)
Loans and Advances 569,258 695,084
(Including due from Holding Co. Rs. 413,311)
Advance tax (Including TDS Receivable) 74,556 39,572
643,814 734,656

Sundry creditors 64,556 105,156
Provision for tax 87,566 58,360
152,122 163,516
6. OPERATING CHARGES
Service charges paid 531,367 516,000
Interest on Income tax — 6,250
531,367 522,250
7. ADMINISTRATIVE EXPENSES
Other administrative expenses 22,978 184
Auditors remuneration - Audit fees 16,854 11,224
Miscellaneous Expenditure 400 26,066
Professional Tax 2,500 2,500
42,732 39,974

Schedules forming part of Financial Statements Shopper's Stop Services (India) Ltd.
8. NOTES FORMING PART OF ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2008
SIGNIFICANT ACCOUNTING POLICIES
1. Basis of Accounting
The Company follows accrual system of accounts and the historical cost convention in accordance with generally accepted
accounting practices. Revenues are recognised and expenses are accounted on accrual basis with necessary provision for all
known liabilities.
2. Previous years figure have been regrouped/rearranged wherever necessary.
9. RELATED PARTY TRANSACTIONS

Following are the transaction with related parties
Nature Holding Associates Key Total

Management
Personnel
Advances Given
Shopper's Stop Limited — — — —
Service Charges Income

Shopper's Stop Limited 540,000.00 — — 540,000.00
(540,000.00) — — (540,000.00)
Upasna Trading Ltd. — 120,000.00 — 120,000.00

— (120,000.00) — (120,000.00)
Balance outstanding at the year end 618,574.00 Dr

(719,914.00) Dr
Holding Company : Shopper's Stop Limited
Associates : Upasna Trading Limited, Shoppers Stop.Com (India) Limited, Crossword Bookstores Limited,
Ivory Properties and Hotels Pvt. Ltd. K. Raheja Corp. Pvt. Ltd., Palm Shelter Estate Development
Pvt. Ltd., K.Raheja Pvt. Ltd. Inorbit Mall (India) Private Limited, Hypercity Retail (India) Ltd.,
Gateway Multichannel Retail (India) Limited, Nuance Group (India) Private Limited, Timezone
Entertainment Private Limited
Key Management Personnel : B. S. Nagesh, Yasin Virani, C. B. Navalkar, Govind Shrikhande

Company's General Business Profile Shopper's Stop Services (India) Ltd.
I) Registration Details :
Registration No. 11-124945 State Code 11
Balance Sheet Date 31/03/2008
II) Capital Raised during the year (Rs. ‘000)
Public Issue NIL Right Issue NIL
Bonus Issue NIL Private placement NIL
III) Position of mobilisation and development of funds (Rs. ‘000) :

Total Liabilities 743 Total Assets 743
Sources of Funds
Paid-up capital 500 Reserve & Surplus 243
Secured Loans NIL Unsecured Loans NIL
Net Fixed Assets NIL Investments NIL
Net Current Assets 743 Misc. Expenditure NIL
Accumulated Losses NIL
IV) Performance of Company :

Turnover (Including Other Income) 660 Total Expenditure 574
Profit/(Loss) Before Tax 86 Profit/(Loss) After Tax 57
Earning Per Share in Rs. 1.13 Dividend NIL
V) Generic Names of Three Principal Products / Services of Company (as per Monetary Terms)
Item Code No. : Not Applicable
Product Description : Not Applicable
Govind Shrikhande
Director
Proprietor. Director
Mumbai

Directors' Report Gateway Multichannel Retail (India) Limited
Dear Shareholders,
Your Directors have pleasure in presenting the First Annual Report together with the Audited Accounts of your Company for the period
ended March 31, 2008.
Operations
The Company is first in India to start multi channel retail business. It has entered into franchise arrangement with Home Retail Group of
UK. As part of Multichannel strategy, your company has opened stores, introduced catalogue, Call center operation and website, so as
to provide customer various shopping channels. In first phase, the company has opened 6 stores, has in circulation more than 100,000
catalogues of 700 pages, Call center operation to enable shopping via phones and website offering more than 4000 products.
The Company proposes to make the transactional website by second quarter of the fiscal year 2008-09. The concept being new in the
country, the company has launched the communication concept on the multichannel options offered by us.
(Rs. '000)
Particulars Period ended

March 31, 2008
Retail Sales (Net of taxes) 20,982

Other Operating Income 5,621
Other Income 36
Total Revenues 26,639
Loss before Depreciation & Tax (64,662)
Less: Depreciation (2,895)
Loss before Tax (67,557)
Less: Provision for Tax (225)
Loss after Tax (67,782)
Transfer to General Reserve —
Balance carried forward (67,782)

Dividend:
Your Directors do not recommend dividend on account of loss incurred by the Company.
Fixed Deposits:
Sheet date.
Share Capital:
During the period under review the authorised share capital was increased form 50,000 Equity Shares of Rs. 10/- each to 10,00,000
Equity Shares of Rs. 10/- each. The issued and paid up share capital of the Company is 50,000 Equity Shares of Rs. 10/- each since its
incorporation.
Directors:
In accordance with the provisions of the Companies Act, 1956 and Articles of Association of the Company, Mr. B. S. Nagesh, Director
Director’s Responsibility Statement:

Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:
• In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation
relating to material departures;
• The Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and
loss of the Company for that period;
• The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the
provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and irregularities;
• The Directors have prepared the Annual Accounts on a going concern basis.
Auditors Report:
The Board has duly examined the statutory Auditors report to accounts and the clarifications, wherever necessary, have been included
in the Notes to Accounts, section of Annual Report.

Auditors:
Annual General Meeting and have sought the re-appointment and have confirmed that their re-appointment, if made, shall be within the
limits laid down under Section 224(1B) of the Companies Act, 1956.
The Board of Directors recommends the re-appointment of Deloitte Haskins & Sells, Chartered Accountants, as the Statutory Auditors.
Conservations of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:
The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure
of Particulars in the report of Directors) Rules, 1988 with regard to Conservation of Energy, Technology Absorption are not applicable
to the Company’s business. The Foreign Exchange Earnings was Rs. 588 thousands and the Foreign Exchange outgo was Rs. 6,378
thousands.
Employees:
None of the employees fall under the limits specified pursuant to the provisions of Section 217 (2A) of the Companies Act, 1956, read
with the Companies (Particulars of Employees) Rules, 1975, as amended.
Acknowledgement:
Your Directors express their gratitude to the Customers, Suppliers, employees and all stakeholders for their continuing support. We are
deeply grateful to Shopper’s Stop Ltd., the Holding Company, for the confidence and faith that they have reposed in us.
Mumbai B. S. Nagesh

Auditors' Report Gateway Multichannel Retail (India) Limited
To,
The Shareholders of Gateway Multichannel Retail (India) Limited
1. We have audited the attached Balance Sheet of Gateway Multichannel Retail (India) Limited as at 31 March 2008 and also the
Profit and Loss Account and the Cash Flow Statement for the period from 24 April 2007 to 31 March 2008, annexed thereto. These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and
5 of the said Order.
(b) In our opinion, proper books of account as required by law have been kept by the Company, so far as appears from our
examination of those books.
of account.
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.
(e) On the basis of written representations received from the Directors as on 31 March 2008 and taken on record by the Board of
Directors none of the directors are disqualified as on 31 March 2008 from being appointed as a director in terms of clause (g)
of sub-section (1) of Section 274 of the Companies Act, 1956.
(f) Attention is invited to note no. 25 regarding unutilised service tax input credit of Rs. 6,582 thousand as at 31 March 2008. These
financial statements have been prepared by the management assuming that the company will be able to utilise the credit in
future years and therefore do not include any adjustments in the financial statements that might arise should the company be
unable to utilise the credit.

Auditors' Report Gateway Multichannel Retail (India) Limited
(g) Subject to our observations in paragraph (f), above, the impact of which on the financial statements cannot be ascertained, in
our opinion and to the best of our information and according to the explanations given to us, the accounts read together with
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2008;
(ii) in the case of the Profit and Loss Account, of the loss of the Company for the period from 24 April 2007 to
31 March 2008; and
(iii) in the case of the Cash Flow statement, of the Cash Flows for the period from 24 April 2007 to 31 March 2008.

P. B. Pardiwalla
Partner
Place : Mumbai
Date : 24 April 2008

Annexure to the Auditors' Report Gateway Multichannel Retail (India) Limited
1. The nature of the Company’s business/activities for the period are such that the requirements of items (i-c), (vi), (vii), (viii), (x), (xi),
(xii), (xiii), (xiv), (xv), (xviii), (xix) and (xx) of paragraph 4 of the Order are not applicable to the Company.
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed
assets.
(b) As explained to us this being the first year of the company’s operations fixed assets have been verified on purchase.
3. In respect of its inventories:
(a) As explained to us, inventories were physically verified by the management at reasonable intervals during the period.
(b) In our opinion and according to the information and explanations given to us, 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.
(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical verification.
4. Company has not granted any loan to parties covered in the register maintained under section 301 of the Companies Act 1956. In
respect of loans, secured/unsecured, taken during the period from parties covered in the register maintained under section 301 of
the Companies Act 1956, according to the information and explanations given to us:
i. At the period-end, the outstanding balance of the loan was Rs. 306,924 thousand. The maximum amount of the loan outstanding
during the period was Rs. 306,924 thousand.
ii. In our opinion, the rate of interest and other terms and conditions of the loan is, prima facie, not prejudicial to the interests of
the Company.
5. In our opinion and according to the information and explanations given to us, there are adequate internal control systems
commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for
the sale of goods. The nature of the company’s activities is such that there was no sale of services during the period. We have not
observed any continuing failure to correct major weaknesses in such internal controls.
6. In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies Act, 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 into the register, maintained
under the said section have been so entered.
(b) Where each of such transactions (excluding loans reported under paragraph 4 above) is in excess of Rs. 5 lakhs in respect of
any party, we are informed that the nature of transaction is such that there are no comparative prevailing market prices.

Annexure to the Auditors' Report Gateway Multichannel Retail (India) Limited

i. According to the information and explanations given to us, the Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employee’s State Insurance, Income-tax, sales Tax, Service tax and any other material
statutory dues with the appropriate authorities during the period.
ii. According to the information and explanations given to us there are no disputed Income Tax, Customs duty, Service Tax and
Cess, which have not been deposited with the relevant authorities.
8. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loan
obtained was, prima facie, applied by the Company during the period for the purposes for which the loan was obtained.
9. According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, term
loans amounting to Rs. 121,904 thousand have, prima facie, been used during the period for long-term investment.
Company was noticed or reported during the period.

P. B. Pardiwalla
Partner
Place : Mumbai
Date : 24 April 2008

Balance Sheet as at 31 March, 2008 Gateway Multichannel Retail (India) Limited
(Rs: '000)
Notes Mar-08
SOURCES OF FUNDS
Share Capital 3 500
500
LOAN FUNDS
Unsecured Loans 4 306,924
306,924
307,424
FIXED ASSETS
Gross Block 5 72,062
Less: Accumulated depreciation 2,895
Net Block 69,168
Capital Work In Progress 12,997
82,164
Inventories 6 120,613
Sundry Debtors 7 2,598
Cash and Bank Balances 8 5,699
Loans and Advances 9 59,841
188,750
LESS: CURRENT LIABILITIES AND PROVISIONS 10
Current Liabilities 31,062
Provisions 211
31,272
Net Current Assets 157,478

PROFIT AND LOSS ACCOUNT 67,782
307,424
For Deloitte Haskins & Sells Andrew Levermore

P. B. Pardiwalla B. S. Nagesh
Partner Director
Place : Mumbai

Profit & Loss Account for the period
from 24 April, 2007 to 31 March, 2008 Gateway Multichannel Retail (India) Limited
(Rs. '000)
Notes Mar-08
INCOME
Sales 20,982
Other Income 11 5,657
26,639
EXPENDITURE
Cost of Goods Sold 12 22,471
Employee Costs 13 17,122
Operating and Administrative expenses 14 38,990
Interest and Finance Charges 15 12,719
Depreciation and Amortisation 5 2,895
94,196
LOSS BEFORE TAX (67,557)

Tax Charges-Fringe Benefit Tax 225
LOSS AFTER TAX CARRIED TO BALANCE SHEET (67,782)
Earnings Per Share (Equity shares, par value of Rs. 10/- per share)
Basic (Rs.) 21 (1,446.54)

Diluted (Rs.)

Partner Director
Place : Mumbai

Statement of Cash Flows for the period
from 24 April, 2007 to 31 March, 2008 Gateway Multichannel Retail (India) Limited
(Rs. '000)
Mar-08
Loss before Tax (67,557)
Adjustments for:
Interest and Finance Charges 12,719
Depreciation and Amortisation 2,895
Operating Profit before working capital changes
Increase in Inventories (120,613)
Increase in Debtors (2,598)
Increase in Lease Deposits (37,344)
Increase in Loans and Advances (other than lease deposits) (21,922)
Increase in Current Liabilities and Provisions 31,272
Cash generated from operations (203,148)
Income Taxes Paid (799)
Net Cash used for Operating Activities (203,947)
Purchase of Fixed Assets (including capital work in progress) (85,059)
Net cash used for investing activities (85,059)
Proceeds from Issuance of Share Capital 500
Proceeds from Unsecured Loans (Net) 306,924
Payment of Interest and Finance Charges (12,719)
Net cash from financing activities 294,705
Net Increase in cash and cash equivalents 5,699

Cash and cash equivalents at the beginning of the Period –
Cash and cash equivalents at the end of the period 5,699
5,699

Partner Director
Place : Mumbai

Notes to Financial Statements Gateway Multichannel Retail (India) Limited
Gateway Multichannel Retail (India) Limited (the Company) was incorporated on 24 April 2007. The company is engaged in the
business of retailing of products through retail outlets, internet retail websites and telephone orders.
The accompanying financial statements have been prepared under the historical cost convention, in accordance with Indian
Generally Accepted Accounting Principles and the provisions of the Companies Act, 1956, (the Act).
b) Use of estimates
could differ from those estimates and difference between actual results and estimates are recognised in the period in which the
results are known/materialize.
Tangible Assets
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 stores.
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 Companies Act, 1956 whichever is higher
at the following annual rates.
Particulars Effective Depreciation Rate
Furniture, Fixtures and Other fittings 10 %
Computers 20 %
Office Equipment 10%
Vehicle 20%
Leasehold improvements are depreciated over the primary period of lease i.e. 9 years.
Intangible Assets
Intangible assets are stated at their cost of acquisition, less accumulated amortization and impairment losses. An intangible
The Company capitalizes software and related implementation costs where it is reasonably estimated that the software has an
enduring useful life. Software is amortized uniformly over a period of 5 years.

Impairment of Assets
loss account.
(d) Borrowing Cost
Borrowing Costs attributable to the acquisition or construction of qualifying assets, as defined in Accounting Standard 16 on
Borrowing Costs, are capitalized as part of the cost of acquisition. Other borrowing costs are expensed as incurred.
(e) Revenue recognition
Revenue is recognized when it is earned and no significant uncertainly exists as to its realization or collection.
Sales are recognised 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 is stated at net
of returns and Value Added Tax recovered.
(f) Inventories
Inventories are valued at the lower of cost and net realizable 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.
(g) Foreign Currency Transactions
(h) Employee Benefits
recognized as expenses when employees have rendered service entitling them to the contributions.
Gratuity and leave encashment benefit obligations recognized in the Balance Sheet represents the present value of the obligation
as adjusted for past service cost and as reduced by the fair value of plan assets. Actuarial gains and losses are recognized

(i) Income Tax
Fringe Benefits Tax (FBT) payable under the provision of Section 115WC of the Income Tax Act, 1961 is in accordance with the
determination of profits for the period.
(j) Earnings Per Share
Share. Basic EPS is computed by dividing the net profit or loss for the period by the weighted average number of Equity shares
outstanding during the period.
(k) Operating Lease
Operating Lease payments are recognised as an expense in the profit and loss account on a straight line basis, which is
representative of the time pattern of the user’s benefit.
(l) Cash Flow Statement
presents the cash flows by operating, investing and financing activities of the company.
(m) Contingent Liabilities
Contingent liabilities as defined in Accounting Standard 29 on Provisions, Contingent Liabilities and Contingent Assets are disclosed
by way of notes to the accounts. Provision is made if it becomes probable that an outflow of future economic benefits will be
required for an item previously dealt with as a contingent liability.

(Rs. '000)
Mar-08
3. SHARE CAPITAL
Authorised:
1,000,000 equity shares of Rs. 10/- each 10,000

50,000 equity shares of Rs. 10/- each fully paid up
(of the above, 25,500 share are held by 500
Shopper's Stop Limited, the holding company)
4. UNSECURED LOANS
Demand Loans From:
Shopper’s Stop Limited 156,531
Hypercity Retail (India) Limited 150,393
306,924
5. FIXED ASSETS (Rs. ‘000)

Additions
As at Depreciation As at As at
Description during
31 March 2008 for the period 31 March 2008 31 March 2008
the period
TANGIBLE ASSETS
Leasehold Improvements 16,786 16,786 447 447 16,339
Computers 15,685 15,685 922 922 14,763
Office Equipment 705 705 19 19 685
Furniture and fixtures and other fittings 25,487 25,487 659 659 24,828
Vehicles 201 201 13 13 188
Total 58,864 58,864 2,060 2,060 56,804
INTANGIBLE ASSETS
Software 13,198 13,198 835 835 12,363
Total 13,198 13,198 835 835 12,363
Grand Total 72,062 72,062 2,895 2,895 69,168

(Rs, '000)
Mar-08
6. INVENTORIES
Retail Merchandise 120,613
120,613
7. SUNDRY DEBTORS
(unsecured considered good)
Outstanding for a period less than six months 2,598
2,598
Cash on Hand 285
Balances With Banks:
In Current Accounts 5,414
5,699
(Unsecured)
Due from suppliers 5,182
Premises and Other Deposits 37,344
Tax set off and Input Credit available 18,493
Prepayments 623
Income Taxes Paid 574
62,217
Less: Provision 2,376
59,841
Current Liabilities
Sundry Creditors for Expense 23,749
Deposit Received 3,929
Other Liabilities 3,383
31,062
Provisions
For Gratuity 13
For Leave Encashment 198
211
31,272
There is no amount due to Small Scale Industrial Undertakings.

(Rs, '000)
Mar-08
11. OTHER INCOME
Sale of Catalogue Pages for advertisement 3,394
Rent Received 2,227
Miscellaneous Income 36
5,657
Purchases 143,083
Less: Closing Stock 120,613
22,471
13. EMPLOYEE COSTS
Salaries, Allowance and Bonus 16,039
Contribution to Provident Fund 547
Gratuity and Leave Encashment 211
Staff Welfare Expenses 325
17,122
Insurance Charges 203
Lease Rent 13,644
Rates and Taxes 2,487
Electricity Charges 1,107
Legal and Professional Fees 1,399
Audit Fees (Excluding service tax)
– Statutory audit fees 300
– Certification work 50
Conveyance and Traveling Expenses 555
Printing and Stationery 709
Telephone and Telex Charges 659
Repairs and Maintenance 232
Security Charges Paid 957
Housekeeping Charges 534
Home Delivery Charges 1,334
Clearing and Forwarding Charges 1,517
Packing Materials 96
Advertisement and Marketing cost 11,571
Miscellaneous Expenses 1,636
38,990
Interest on Unsecured Loans 12,571
Finance Charges 148
12,719

(Rs. '000)
Mar-08
16. CAPITAL COMMITMENT [NET OF ADVANCES]
Fixed Assets 162

The company operates in a single business and geographical segment.
a) Operating lease rentals charged to revenue for lease agreements entered during the period:
Particulars
Office Premises and Stores 13,644
b) Future minimum lease rental payments in respect of non-cancellable lease:
Particulars
Not later than one year 48,842

Later than one year and not later than five years 75,376
Later than five years —
The agreements are executed for periods of 11 to 108 months with a non cancellable period at the beginning of the agreement
ranging from 0 to 36 months and having a renewable clause.
19. No provision for current income tax has been made in the accounts, since the Company estimates that there will be no taxable
profit for the year. Deferred Tax assets have not been recognized in respect of unabsorbed depreciation and carried forward losses
in consideration of prudence as set out in Accounting Standard 22 on Accounting for Taxes on Income.
Names of Related Parties and Description of Relationship:
Relationship Related Party
Holding Company Shopper's Stop Limited
Company having substantial interest in voting power Hypercity Retail (India) Limited

Particulars Hypercity Retail (India) Limited Shopper's Stop Limited

(Rs. ‘000) (Rs. ‘000)
Issue of Shares 245 255

Loan taken 150,393 156,531
Deposits Paid 3,002 231
Deposit Received 3,929 Nil
Rent Paid 1,713 211
Rent Received 2,227 Nil
Purchase of Merchandise 133,066 Nil
Interest paid on Loan 6,903 6,704
Reimbursement of Employee Costs 12,683 969
Reimbursement of Clearing and Forwarding charges 9,403 Nil
Reimbursement of other expenses 3,860 4,503
Balance Payable at period end 2,837 2,677
Loan outstanding at the period end 150,393 156,531
21. EARNINGS PER SHARE
Particulars For the period

24 April 2007 to
31 March 2008
Loss attributable to Equity Shareholders - (Rs. ‘000) (67,782)
Weighted average number of Equity Shares outstanding during the period 46,858
Nominal value Per share Rs. 10/-
Basic Earnings Per Share (1,446.54)
Note: There is no dilution to basic EPS as there were no outstanding dilutive potential equity shares.

22. EMPLOYMENT AND RETIREMENT BENEFITS Current Period

(Rs. ‘000)
1. Leave Encashment cost 198

2. Post-employment benefits
(i) Defined contribution plans Company’s contribution to Provident Fund 547
(ii) Defined benefit schemes-Gratuity
Service cost 13
Interest cost Nil
Actuarial Loss on obligations Nil
Benefits paid Nil
Employers’ Contribution Nil
Benefits paid Nil
Actuarial gain on Plan Assets Nil
Total 13
Liability recognized as at 31 March 2008
b. Expense during the period
Service Cost 13
Interest Cost Nil
Actual Return on Plan assets Nil
Expected Return on Plan assets Nil
Actuarial Loss on obligations Nil
Rate of Disounting 8% p.a.
Attrition rate 15%
23. The company has not received any intimation from “suppliers” regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at year end together with interest paid / payable
as required under the said Act have not been given.

24. SUPPLEMENTARY STATUTORY DATA
a) Value of Imports on CIF basis (Rs. ‘000)
Software 6,378
b) Earnings in Foreign Currency [on Receipts basis]
Foreign credit card collection on sale of merchandise 313
Sales of catalogue Pages 275
c) Quantitative details (in Nos.) - General Merchandise [Home Appliances, Furniture etc.]
Opening Stock Purchases Sales Closing Stock#

Quantity Amount Quantity (Rs. ‘000) Quantity (Rs. ‘000) Quantity (Rs. '000)
NIL NIL 186,763 143,083 13,290 20,982 166,970 120,613
# Closing stock figure is net of shrinkages and damages.
25. As at 31 March, 2008, the Company has unutilised service tax input credit of Rs. 6,582 thousand. The Company is working on various
options to utilise the credit, which is available for an indefinite period under the Cenvat Credit rules. These financial statements have
been prepared assuming that the company will be able to utilise this credit in future years and therefore do not include any adjustments
in the financial information that might result should the company be unable to utilise the credit.
26. The period from 24 April, 2007 (date of incorporation) to 31 March, 2008 is the first accounting period of the Company; hence there
is no comparative financial information.

Company's General Business Profile Gateway Multichannel Retail (India) Limited
Registration No. U 5 2 1 0 0 M H 2 0 0 7 State Code 1 1

– – – – – –
– – – 5 0 0
2 7 0 9 1 4 2 7 0 9 1 4
Sources of Funds
5 0 0 – – –
– – – 3 0 6 9 2 4
8 2 1 6 4 – – –
1 5 7 4 7 8 – – –
Accumulated Losses
6 7 7 8 2
2 6 6 3 9 9 4 1 9 6
+ – Loss Before Tax + – Loss After Tax
– 6 7 5 5 7 – 6 7 7 8 2
– 1 4 4 6 . 5 4 – – %
Product Description

Product Description

Product Description
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
P. B. Pardiwalla Andrew Levermore B. S. Nagesh
Partner Director Director
Place : Mumbai

Statement pursuant to Section 212 (1)(e) of the Companies Act, 1956 Shopper's Stop Ltd.
Statement pursuant to Section 212(1)(e) of the Companies Act, 1956 relating to subsidiary Companies
(Rs. in million)
Name of the Subsidiary Crossword Upasna Shopper's Stop.Com Shopper's Stop Gateway
Companies Bookstores Trading Ltd. (India) Ltd. Services (India) Multichannel Retail
Ltd. Ltd. (India) Ltd.
Holding Company’s 95,62,500 5,000 Equity 50,000 Equity Shares 50,000 Equity 25,500 Equity
interest: Equity Shares Shares of of Rs. 10/- each fully Shares of Shares of Rs. 10/-
No. of Equity Shares Held of Rs.10/- each Rs. 100/- each paid up. Rs. 10/- each each fully paid up.
fully paid up. fully paid up. fully paid up.
Extent of Holding 100% 100% 100% 100% 51%
The “Financial Year” of 31st March, 31st March, 31st March, 31st March, 31st March,
the Subsidiary Company 2008 2008 2008 2008 2008
ended on
Net aggregate amount of the Subsidiary Company’s profits/(losses) dealt with in the Holding Company’s accounts
For the Subsidiary’s 15.90 3.11 (0.04) 0.06 (34.57)

aforesaid financial year
For the previous (92.87) (4.79) (0.05) 0.19 —

financial years
Net aggregate amount of the Subsidiary Company’s profits/(losses) not dealt with in the Holding Company’s accounts
For the Subsidiary’s — — — — (33.21)

aforesaid financial year
For the previous financial — — — — —

years

To,
The Board of Directors of Shopper's Stop Limited
1. We have audited the attached Consolidated Balance Sheet of Shopper’s Stop Limited (the Company) and its components (subsidiary,
joint venture companies and associate companies), collectively the “Group” as at 31 March 2008 and also the Consolidated Profit
and Loss Account and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. 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 regarding components. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with generally accepted auditing standards in India. These Standards require that we plan
and perform the audit to obtain reasonable assurance whether the financial statements are prepared, in all material respects, in
accordance with an identified financial reporting framework and are free of material misstatement. An audit includes, examining
on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements.
We believe that our audit provides a reasonable basis for our opinion.
3. 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 is based solely on the reports of the other auditors:
a) Subsidiary companies whose financial statements reflect the Group’s share of total assets of Rs. 1.16 million as at 31 March
2008, total revenues of Rs. 0.66 million and total cash flows of Rs. 0.02 million for the year ended 31 March 2008.
b) Joint venture companies whose financial statements reflect the Group’s share of total assets of Rs. 76.66 million as at 31 March
2008, total revenues of Rs. 45.67 million and total cash flows of Rs. 6.34 million for the year ended 31 March 2008.
c) An associate company in respect of which the Group’s share of loss is restricted to the value of investment.
4. The consolidated financial statements have been prepared by the Company in accordance with the requirements of Accounting
Standard -21, “Consolidated Financial Statements”, Accounting Standard 23, “Accounting for Investments in Associates in Consolidated
Financial Statements” and Accounting Standard 27, “Financial Reporting of Interests in Joint Ventures”.
5. Attention is invited to Note no. 30 of the financial statement regarding unutilised service tax input credit of Rs. 181.62 million as at
31 March 2008. These financial statements have been prepared by the management assuming that the company will be able to
utilise the credit in future years and therefore do not include any adjustments in the financial statements that might arise should the
company be unable to utilise the credit.

6. Subject to our observation in paragraph 5, above, the impact of which on the financial statements cannot be ascertained, to the
best of our information and according to the explanations given to us, and on consideration of reports of other auditors on separate
financial statements of the subsidiary companies, joint venture company and associate company, we are of the opinion that the
attached consolidated financial statements give a true and fair view in conformity with the Generally Accepted Accounting Principles
in India.
i) in the case of the Consolidated Balance Sheet, of the consolidated state of affairs of the group as at 31 March 2008;
ii) in the case of the Consolidated Profit and Loss Account, of the profit for the year ended on that date; and
iii) In the case of the Consolidated Cash Flow Statement of the cash flows for the year ended on that date.

P. B. Pardiwalla
Partner
Place : Mumbai

Consolidated Balance Sheet as at 31 March, 2008 Shopper's Stop Ltd.

Notes Mar-08 Mar-07
SOURCES OF FUNDS
Share capital 3 348.62 348.27
Reserves and surplus 4 2,484.18 2,512.41
2,832.80 2,860.68
LOAN FUNDS
Secured loans 5 1,240.81 1,303.94
Unsecured loans 6 830.62 0.38
2,071.43 1,304.32
DEFERRED TAX LIABILITY 24 (b) 16.85 41.17
4,921.08 4,206.17
FIXED ASSETS 7
Gross Block 3,683.75 2,338.88
Less: Accumulated depreciation 1,272.02 842.76
Net Block 2,411.73 1,496.12
Capital work in progress (including Capital advances) 240.63 214.29
Share in Joint Venture 114.65 28.02
2,767.01 1,738.43
GOODWILL ON CONSOLIDATION OF SUBSIDIARIES 96.29 96.29

GOODWILL ON CONSOLIDATION OF JOINT VENTURE 35.38 12.88
MINORITY INTEREST 32.97 —
INVESTMENTS 8 190.11 0.11
Inventories 9 1,822.09 1,153.93
Sundry debtors 10 88.06 127.89
Cash and bank balances 11 136.29 1,021.30
Loans and advances 12 1,942.75 1,468.66
3,989.19 3,771.78
Less: CURRENT LIABILITIES AND PROVISIONS 13
Current Liabilities 2,128.70 1,352.20
Provisions 61.17 61.12
2,189.87 1,413.32
Net current assets 1,799.32 2,358.46
4,921.08 4,206.17
The accompanying notes 1 to 31 are an integral part of this financial statements.

Managing Director
P. B. Pardiwalla C. B. Navalkar Prashant Mehta
Membership No. 40005 Group Chief Financial Officer Company Secretary &
Mumbai Dated : 25 April, 2008 Vice President - Legal

Consolidated Profit & Loss Account for the year ended 31 March, 2008 Shopper's Stop Ltd.

Notes Mar-08 Mar-07
INCOME
Retail Turnover
Own merchandise (including concession sales) 2(e) 11,111.47 8,256.31
Consignment merchandise 857.00 870.46
Revenue from Gaming Business 45.39 10.70
Other Retail operating income 14 192.13 145.62
20 12,205.99 9,283.09
Less : Value Added Tax / Sales Tax 555.08 390.92
Less : Cost of consignment merchandise 613.89 612.10
11,037.02 8,280.07
Other income 15 88.29 127.16
11,125.31 8,407.23
EXPENDITURE
Cost of goods sold 16 6,888.98 5,229.57
Employee costs 17 808.56 600.35
Operating and administrative expenses 18 2,789.40 1,768.73
Interest and finance charges 19 130.88 50.04
435.38 289.27
11,053.20 7,937.96
PROFIT BEFORE TAX 72.11 469.27
Tax Charges 24(a) 78.84 225.89
(LOSS)/PROFIT AFTER TAX (6.73) 243.38
Minority Interest 33.21 —
NET PROFIT FOR THE YEAR 26.48 243.38
Share of Loss in associate Company (restricted to the value of investment) — 2.05
BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR 393.59 226.48
AMOUNT AVAILABLE FOR APPROPRIATION 420.07 467.81
APPROPRIATIONS
Proposed Dividend 52.29 52.24
Corporate Dividend Tax 8.88 8.88
BALANCE CARRIED TO BALANCE SHEET 355.42 393.59
Earning per share (Equity shares, par value of Rs. 10/- per share) 29
Basic (Rs.) 0.76 7.00
Diluted (Rs.) 0.76 6.98

Managing Director

Consolidated Statement of Cash Flows for the year ended 31 March, 2008 Shopper's Stop Ltd.

Mar-08 Mar-07
Net profit before tax 72.11 469.27
Adjustments for:
Interest and finance charges 130.88 50.04
Deferred revenue expenses — 0.56
Loss on sale of fixed assets 0.50 4.29
Amortisation of Stock Compensation 1.29 1.27
Provision for Doubtful Debts & Advances 0.66 0.17
Interest income (56.77) (91.15)
Operating profit before working capital changes 584.05 723.72
Increase in Inventories (670.28) (416.91)
Decrease (Increase) in Sundry debtors 39.17 (35.42)
Increase in Loans and Advances (except lease deposits) (196.16) (487.16)
Increase in Lease Deposits (252.92) (218.18)
Increase in Current Liabilities and Provisions 776.90 460.76
Cash generated from operations 280.76 26.81
Income taxes paid (137.36) (186.10)
Net cash generated/(used) from/for operating activities 143.40 (159.29)
Purchase of fixed assets (including capital work-in-progress) (1,469.83) (651.17)
Sale proceeds of fixed assets 4.31 6.93
Purchase of Investments (190.00) (2.06)
Goodwill on Investments (22.50) (12.88)
Receipt of interest income 56.77 91.15
Net cash used for investing activities (1,621.25) (568.03)
Issuance of share capital 0.35 4.44
Payment of Dividend & Dividend Tax (61.12) (58.82)
Share premium 6.08 45.73
(Payment)/Proceeds for/from secured loans (net) (63.13) 695.26
Proceeds/(Payments) from/for unsecured loans (net) 830.24 (25.62)
Payment of interest and finance charges (130.88) (50.04)
Net cash generated from financing activities 581.54 610.95
Net decrease in cash and cash equivalents (896.31) (116.37)
Cash and cash equivalents as at beginning of the year 1,017.00 1,133.37
Cash and cash equivalents as at the end of the year 120.69 1,017.00
(896.31) (116.37)
Note:
Cash and Cash Equivalents as per Balance sheet (see Note 11) 136.29 1,021.30
Less: Deposit under lien 15.60 4.30
Cash and Cash Equivalent as reported above 120.69 1,017.00

Managing Director

Significant Accounting Policies and Notes forming part of
Consolidated Financial Statements for the year ended 31 March, 2008 Shopper's Stop Ltd.
(a) Shopper’s Stop Limited ('SSL' or '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 store facilities.
(b) The Company has the following subsidiaries incorporated in India:
Name of the Company % of shareholding Nature of business

as at 31 March 2008
Crossword Book Stores Limited 100% Engaged in the business of retailing books and
other items such as music, toys, stationery etc.
through departmental and concessionaire stores,
operated by franchisees.
Upasna Trading Limited 100% Supervises the distribution and Logistics operations
of group companies.
Shopper’s Stop Services (India) Limited 100% Provides accounting services to group companies.
Shopper’s Stop.Com (India) Limited 100% Operations suspended.
Gateway Multichannel Retail (India) Limited 51% Engaged in the business of retailing of products
through catalogue shopping at retail outlets,
internet and telephone orders.
(c) The Company has the following Interest in Joint Venture Companies incorporated in India:
Name of the Company Nature of Business Proportion of Proportion of

ownership Interest ownership interest
31 March 2008 31 March 2007
Nuance Group (India) Private Limited Airport retailing 50% # 50%
Timezone Entertainment Private Limited Entertainment 45% 45%
# as at 31 December 2007
(d) The Company has the following Investment in an Associate Company Incorporated in India:
Name of the Company Nature of Business Proportion of Proportion of

ownership Interest ownership interest
31 March 2008 31 March 2007
Hypercity Retail (India) Limited Retail Business 19% 19%

a) Principles of Consolidation
The subsidiaries are consolidated on a line-by-line basis in accordance with Accounting Standard 21 (AS–21) – “Consolidated
Financial Statements”. Interest of the minority shareholders in the subsidiaries’ profits or losses and net worth is displayed separately
in the consolidated Summary Statements. Inter-company transactions and balances are eliminated on consolidation.
The Company’s group interest in this Joint Ventures, has been accounted for using proportionate consolidation method in
accordance with Accounting Standard 27 (AS–27) – “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.

Investments in associates is accounted for under the Equity Method in accordance with Accounting Standard 23 (AS–23)
– “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, Associates and one Joint Venture company are
drawn upto 31 March, 2008 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 are prepared for the period from 12 December, 2006
(date of incorporation) to 31 December, 2007 for the purpose of consolidation.
b) Uniform Accounting Policies

SSL and its subsidiaries, Associate Company 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 Statement of Assets and Liabilities and Profits and Losses have been prepared
using the same accounting policies as adopted by the SSL.
c) Use of estimates
the results are known / materialize.
d) Fixed Assets and Depreciation

Tangible Assets
of all cost incurred to bring the assets to their location and working condition and includes all expenses incurred upto 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:
(%)
Air conditioning and other equipment 5.00
Furniture, fixtures and other fittings 10.00
Computers 33.00
Vehicles 20.00
Leasehold improvements are depreciated over the total period of the lease or 10 years, whichever is lower.
Intangible Assets
Intangible assets are stated at their cost of acquisition, less accumulated amortisation and impairment losses thereon. 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 estimate of it’s useful life (3 to 5 years).
Trademark and Patents, Copyrights and Goodwill are amortized uniformly over a period of 10 years.

carrying amount is reduced to the recoverable amount and the reduction is recognised as an impairment loss in the profit and
loss account.
e) Revenue recognition
Revenue is recognised where it is earned and no significant uncertainty exists as to its realisation or collection.
Retail sales and revenues are recognised 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. Sales Tax and Value Added 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 sponsor’s
advertisements are promoted / displayed. 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 realisable value. Cost of inventories comprise 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.
g) Investments
Long term investments other than in associates considered for consolidation are carried at cost less provision, if any, to recognise
a decline, other than temporary, in the value of investments. Investments in associates considered for consolidation are accounted
for using the equity method.
h) Employee benefits
recognised as expenses when employees have rendered service entitling them to the contributions.
Gratuity and leave encashment benefit obligations recognised in the Balance Sheet represents the present value of the obligation
as adjusted for past service cost and as reduced by the fair value of plan assets. Actuarial gains and losses are recognised
i) Foreign currency transactions


j) Income Tax
Income taxes are accounted for in accordance with Accounting Standard 22 on Accounting for Taxes on Income. Taxes comprise
Current tax is measured at the amount expected to be paid/recovered from the taxation authorities, using the applicable tax
rates and tax laws.
substantively enacted tax rates and tax regulations. 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 realised.
Fringe Benefits Tax (FBT) payable under the provisions of Section 115 WC of the Income Tax Act, 1961 is in accordance with the
determination of the profits for the year. Tax on distributed profits payable in accordance with the provisions of Section 115 O
of the Income Tax Act, 1961 is in accordance with the Guidance Note on Accounting for Corporate Dividend Tax regarded as a
tax on distribution of profits and is not considered in determination of the profits for the year.
k) Earnings Per Share

Share. 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. 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, except
where the results are anti-dilutive.
l) Borrowing costs
Borrowing costs attributable to the acquisition or construction of qualifying assets, as defined in Accounting Standard 16 on
Borrowing Costs, are capitalised as part of the cost of acquisition. Other borrowing costs are expensed as incurred.
m) Operating Lease
Operating Lease payments are recognised as an expense in the Profit & Loss Account on a straight-line basis, which is representative
of the time pattern of the user’s benefit.
n) Stock based compensation

The compensation cost of stock options granted to employees is calculated using the intrinsic value of the stock options.
The compensation expenses is amortised uniformly over the vesting period of the option.
o) Cash Flow Statement

The Consolidated Cash Flows have been prepared on the basis of the Consolidated Statement of Assets and Liabilities and
Profits and Losses. 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, investing and financing activities of the Company.
p) Contingent Liabilities

Notes to the Consolidated Financial Statements Shopper's Stop Ltd.

Mar-08 Mar-07
3. SHARE CAPITAL
Authorised:
100,000,000 (Previous year 40,000,000)
equity shares of Rs. 10/- each 1,000.00 400.00
34,862,330 (Previous year 34,827,234)
equity shares of Rs. 10/- each) 348.62 348.27
348.62 348.27

General Reserves
Balance, at beginning of the year 26.65 13.55
Transferred from Profit and Loss Account 3.48 13.10
30.13 26.65
Securities Premium Account
Balance, at beginning of the year 2,083.00 2,037.27
Add :- Received during the year 6.08 45.73
2,089.08 2,083.00
Employee Stock Options
Employee Stock Options 10.20 9.17
Less: Deferred Employee Compensation 0.65 —
9.55 9.17
Balance in Profit and Loss Account 355.42 393.59
2,484.18 2,512.41
5. SECURED LOANS
From banks
Cash credit facilities 668.31 781.62
Working Capital Demand Loans 400.00 349.82
1,068.31 1,131.44
1,240.81 1,303.94
6. UNSECURED LOANS
Short term Loan from banks 650.00 —
Others 150.40 —
800.40 —
830.62 0.38

7. FIXED ASSETS
Description GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK

1 April Additions Deductions 31 March 1 April For the Deductions 31 March 31 March 31 March
2007 2008 2007 year 2008 2008 2007

TANGIBLE ASSETS
Leasehold improvements 613.26 409.90 5.10 1,018.06 113.90 97.22 1.87 209.25 808.81 499.35
Air conditioning and other equipment 549.65 373.14 1.40 921.39 125.23 39.79 0.72 164.30 757.09 424.43
Furniture, fixtures and other fittings 616.26 328.76 3.96 941.06 267.53 161.96 2.60 426.89 514.17 348.73
Computers 262.66 141.39 0.94 403.11 163.43 81.43 0.94 243.92 159.19 99.23
Vehicles 3.72 0.20 - 3.92 2.23 0.61 - 2.84 1.08 1.49
Total 2,045.55 1,253.39 11.40 3,287.54 672.32 381.00 6.13 1,047.20 2,240.34 1,373.23
Notes to the Consolidated Financial Statements
INTANGIBLE ASSETS
Trademarks and patents 161.98 4.64 - 166.62 107.16 16.52 - 123.68 42.94 54.82
Software 91.65 74.61 - 166.26 56.81 29.02 - 85.83 80.43 34.84
Total 253.63 79.25 - 332.88 163.97 45.54 - 209.51 123.37 89.66
Share in Joint Venture 39.70 23.63 - 63.33 6.47 8.84 - 15.31 48.02 33.23
Total 2,338.88 1,356.25 11.40 3,683.75 842.76 435.38 6.13 1,272.02 2,411.73 1,496.12
31 March 2007 1,866.24 494.64 22.01 2,338.88 564.51 289.27 11.02 842.76 1,496.12 -
1) Some of the Trademarks and Patents are pending for registration with relevant authorities and formalities (including for removal of objections) are under progress.
2) Additions include the following pre-operative expenditure for new stores
31 March 2008 31 March 2007

Employee Costs 40.10 21.79
Travelling 15.29 6.66
Insurance 0.29 1.13
Interest 3.46 4.31
Consultation and Registration Fees 8.88 25.33
Other Expenses 2.36 3.52
Shopper's Stop Ltd.
Total 70.38 62.74


Mar-08 Mar-07
8. INVESTMENTS (Trade, Long term at cost, unquoted)
Stargaze Properties Private Limited 0.01 0.01
1,000 equity shares of Rs. 10/- each
Retailers Association of India 0.10 0.10
10,000 equity shares of Rs. 10/- each
Aesthetic Realtors Private Limited (*)
66 Equity Shares of Rs. 10/- each Fully Paid — —
In Associate Company:
Hypercity Retail (India) Limited (Including goodwill of Rs. 2.05 million) 2.05 2.05
180,500 Equity Shares of Rs. 10/- each Fully Paid
Less: Share of Loss of associate Company (restricted to the value of investment) (2.05) (2.05)
— —
19,000,000 (Previous year Nil) 7% redeemable cumulative Preference Shares 190.00 —
of Rs. 10/- each Fully Paid
190.11 0.11
* The Company has invested Rs.660 in Aesthetic Realtors Private Limited
9. INVENTORIES
Retail merchandise 1,819.37 1,152.40
1,822.09 1,153.93
10. SUNDRY DEBTORS
(Unsecured)
Debts outstanding for more than 6 months
– Considered good 6.15 1.71
– Considered doubtful 1.39 0.73
Other Debts 81.91 126.18
89.45 128.62
Less : Provision 1.39 0.73
88.06 127.89
Cash on hand (including cheques on hand) 15.03 21.82
– In Current accounts 79.08 5.18
– In Deposit accounts 0.20 970.51
– In Margin money accounts 3.10 4.30
97.41 1,001.81
136.29 1,021.30


Mar-08 Mar-07
(Unsecured, considered good unless otherwise stated)
Loans (including accrued interest) to Group companies 174.23 90.05
Due from suppliers 157.02 106.31
Advances recoverable in cash or in kind or for value
to be received:
Premises and other deposits 1,027.80 774.88
Interest Receivable on Fixed Deposit — 25.75
Tax Set off and Input Credits available 198.15 81.37
Prepayments 64.54 20.65
Balance with custom and sales tax authorities 9.16 15.04
Income taxes paid (net of provision for tax) 68.76 38.30
Others 58.75 87.92
1,758.41 1,240.27
Less : Provision 46.08 1.64
1,712.33 1238.63
1,942.75 1,468.66

Current Liabilities
Sundry creditors 1,927.42 1,254.29
Security deposits 26.96 14.27
Other Liabilities 137.20 54.22
2,091.58 1,322.78
2,128.70 1,352.20
Provisions
For Proposed Dividend 52.29 52.24
For Corporate Dividend Tax 8.88 8.88
61.17 61.12
2,189.87 1,413.32
14. OTHER RETAIL OPERATING INCOME
Facility management fees 26.21 30.73
Income from store displays and Sponsorship Income 84.66 73.21
Direct Marketing Income 60.82 41.68
Income from franchisee 20.44 —
192.13 145.62
15. MISCELLANEOUS INCOME
Interest income from Banks and others 56.77 91.15
Scrap sales 4.88 3.45
Miscellaneous income and credits 24.63 32.56
Share in Joint Venture 2.01 —
88.29 127.16


Mar-08 Mar-07
(Including concession purchases)
Opening stock 1,152.40 737.01
Less : VAT Credit available on Opening Stock 2.12 0.29
Add : Purchases 7,558.07 5,645.25
Less : Closing stock 1,819.37 1,152.40
6,888.98 5,229.57
17. EMPLOYEE COSTS
Salaries allowance and bonus 725.80 530.99
Stock compensation expense 1.29 1.27
Contribution to provident funds 37.45 30.15
Gratuity and leave encashment 11.09 18.68
Staff welfare expenses 26.69 18.53
802.32 599.62
808.56 600.35
Insurance 12.19 8.64
Lease rent and Hire Charges 1,020.19 621.97
Business conducting fees 107.84 96.12
Rates and taxes 56.80 13.38
Repairs and maintenance
– Buildings 150.05 101.47
– Plant and machinery 18.30 13.36
– Others 23.60 12.55
Legal and professional fees 30.63 20.16
Housekeeping charges 53.97 28.58
Security charges 65.61 43.08
Computer expenses 68.53 39.17
Conveyance and travelling expenses 57.53 49.79
Clearing & Forwarding charges 96.55 77.62
Electricity charges 278.52 185.54
Advertisement and publicity 254.53 181.21
Sales promotion 185.13 110.70
Charges on credit card transactions 75.64 53.21
Packing materials 47.23 32.38
Loss on Sale of Fixed Assets 0.50 4.29
Miscellaneous Expenses 146.40 59.85
2,749.74 1,753.07
2,789.40 1,768.73
On fixed loans from banks — 1.25
On Cash Credit/Working capital demand loans 54.69 21.21
Other borrowing costs 58.43 20.03
Finance charges 5.90 4.47
119.02 46.96
130.88 50.04


20. Retail Turnover in the Profit and Loss Account indicates the gross volumes of business and operations.
21. CONTINGENT LIABILITIES IN RESPECT OF Mar-08 Mar-07

a) Guarantee given for loan taken by Joint Venture from a bank 361.50 172.50
b) Contingent contractual claims which are dependent on the outcome
of certain group company/commercial tax assessments. 0.92 4.35
c) Disputed sales tax matters in appeal 0.07 4.87
d) Disputed Custom Duty 2.40 —
e) Unpaid Service Tax 28.20 —
22. CAPITAL COMMITMENT (NET OF ADVANCES)
Fixed assets 238.38 602.51
a) Operating lease rental charged to revenue for lease agreements entered on or after 1 April 2001 are:
Office premises and Stores 1,034.18 648.68
Residential flat for Accommodation of employee 1.98 1.98
b) The future minimum rental payments in respect of non cancellable lease for
premises are as follows:
Not later than one year 620.29 263.23
Later than one year and not later than five years 1,424.25 363.60
Later than five years 448.15 NIL
The agreements are executed for the period of 60 to 288 months with a non cancellable period from 0 to 108 months and
having a renewable clause.
24. (a) TAX CHARGE
The tax expense for the year comprises of: Mar-08 Mar-07
Income tax
– Current tax 77.59 179.99
– Deferred tax (credit)/Charge (24.32) 37.58
– Short Provision of Tax earlier year 12.70 —
Wealth tax — 0.01
Fringe benefits Tax 12.87 8.31
78.84 225.89
(b) DEFERRED TAX LIABILITY
Major components of Deferred Tax Assets/(Liability) are as follows:
Depreciation (20.97) (44.91)
Expenditure allowable on payment basis 4.12 3.74
Deferred Tax Liability (Net) (16.85) (41.17)

25. EMPLOYMENT AND RETIREMENT BENEFITS Current Year

Staff Costs include the following:
Provision for Leave Encashment 12.36
Company’s contribution to Provident Fund 26.05
Defined benefit schemes
Gratuity
Change in Benefit Obligation
As at 1 April 2007 15.35
Service cost 6.07
Interest cost 1.21
Actuarial Loss on obligations (0.78)
As at 31 March 2008 19.36

As at 1 April 2007 15.45
Expected Return on Plan assets less loss on investments 1.06
Employers’ Contribution 5.77
Acturial gain on Plan Assets (0.43)
As at 31 March 2008 19.36
b. Expense during the year
Service Cost 6.08
Interest Cost 1.21
Expected Return on Plan assets (1.06)
Actuarial (Gain)/Loss on obligations (0.40)
5.83
Rate of Discounting 8% p.a.
Rate of Return on Plan Assets 8% p.a.
This being the first year in which the Company has adopted the Revised Accounting Standard 15 on Employee Benefits, comparative
figures are not presented.


Following are the transaction with related parties (All amounts in Rs. million)
Nature Associates Joint Ventures Key Management Personnel Total
Sharing of Income
Hypercity Retail (India) Limited — — — —
(2.42) (2.42)
Payment of conducting fees / Lease Rent
Ivory Properties and Hotels Private Limited 149.75 — — 149.75
Inorbit Malls (India) Private Limited 133.01 — — 133.01
K. Raheja Private Limited 0.12 — — 0.12
Avacado Properties and Trading India Private Limited 4.76 — — 4.76
(138.02) — — (138.02)
Purchase of Merchandise
Hypercity Retail(India) Limited 0.03 — — 0.03
— — — —
Sale of Merchandise
Timezone Entertainment Private Limited — 0.01 — 0.01
— — — —
Interest Received
Hypercity Retail (India) Limited 21.73 — — 21.73
Nuance Group (India) Private Limited — 0.38 — 0.38
Deposits Given
Inorbit Malls (India) Private Limited 6.25 — — 6.25
(5.84) — — (5.84)
Expenses Recovered
(12.87) — — (12.87)
Lease Rent Received
Timezone Entertainment Private Limited — 0.42 — 0.42
Reimbursement of Expenses
The Nuance Group AG Limited 1.35 1.35
Nask Realtors Private Limited 0.24 — — 0.24
— — — —
Loan Given
Nuance Group (India) Private Limited — 40.50 40.50
(90.05) (5.48) — (95.53)
Investments made
Service Charges Income — — — —
Hypercity Retail (India) Limited — — — —
(6.96) — — (6.96)
Royalty Received
Hypercity Retail (India) Limited — — —
(0.58) — — (0.58)
Recovery of Loan
— — — —
Remuneration — — 11.84 11.84
— — (28.18) (28.18)
Balance outstanding at the year end Receivables
Hypercity Retail (India) Limited 38.97
(92.55)
Ivory Properties and Hotels Private Limited 58.87
(95.09)
Inorbit Malls (India) Private Limited 25.70
(22.34)
Others 0.53
(2.81)
Key Management Personnel 30.42
—
The figure in bracket pertain to previous year


Associates : Ivory Properties and Hotels Private Limited, K. Raheja Corp. Private Limited, Palm Shelter Estate Development
Private Limited, K. Raheja Private Limited, Inorbit Malls (India) Private Limited, Hypercity Retail (India) Limited
The Nuance Group AG Limited, Avacado Properties and Trading India Private Limited
Key Management Personnel : B. S. Nagesh and Govind Shrikhande

I) Information about primary business segments:
Mar-08 Mar-07
Particulars Retail Others Total Retail Others Total
Operations Operations
REVENUE
External Sales 10,991.63 45.39 11,037.02 8,269.37 10.70 8,280.07
Total Revenue 10,991.63 45.39 11,037.02 8,269.37 10.70 8,280.07
RESULTS
Segment Operating Results 244.67 (8.47) 236.20 521.22 (3.96) 517.26
Interest Expenses (130.21) (0.67) (130.88) (49.44) (0.60) (50.04)
Provision for Taxation (78.74) (0.10) (78.84) (225.86) (0.03) (225.89)
Net Profit (26.48) 241.33
OTHER INFORMATION
Segment Assets 7,016.88 94.07 7,110.95 5,562.34 57.15 5,619.49
Total Assets 7,110.95 5,619.49
Segment Liabilities 4,213.69 47.61 4,261.30 2,707.16 10.48 2,717.64

Total Liabilities 4,261.30 2,717.64
Segment Depreciation 426.54 8.84 435.38 286.66 2.61 289.27

Total Depreciation 435.38 289.27
Total Cost incurred during the year to

acquire Segment assets 1,332.62 23.63 1,356.25 469.21 25.43 494.64
(Tangible and Intangible fixed assets)
II) The company operates in a single geographical environment.

28. ESOP SCHEMES

Number of Employee Number of Weighted average Number of Weighted average
Stock Option Outstanding: Options exercise price (Rs.) Options exercise price (Rs.)
Mar-08 Mar-07
Outstanding at the beginning of the year 532,045 456.51 676,854 183.47
Granted during the year 420,000 482.05 390,437 541.88
Forfeited during the year 26,394 – 90,942 –
Exercised during the year 35,096 182.87 444,304 112.92
Outstanding at the end of the year 890,555 481.42 532,045 456.51
29. EARNING PER SHARE (EPS) IS CALCULATED AS FOLLOWS:

Mar-08 Mar-07
(a) Profit attributable to equity share holders (Rs. in million) 26.48 241.33
(b) Weighted Number of equity shares outstanding during the year 34,849,836 34,536,371
(c) Weighted Number of equity shares outstanding during the year
after adjustment for dilution 34,861,017 34,552,677
(d) Nominal value per share 10 10
(e) EPS:
– Basic (Rs.) 0.76 7.00
– Diluted (Rs.) 0.76 6.98
30. As at 31 March 2008, the company has unutilised service tax input credit of Rs.181.62 million. The Company is working on various
options to utilise the credit, which is available for an indefinite period under the Cenvat Credit Rules. These financial statements
have been prepared assuming that the company will be able to utilise this credit in future years and therefore do not include any
adjustments in the financial information that might result, should the company be unable to utilise the credit.
31. Comparative financial information (i.e. the amounts and other disclosures of the preceding year) presented above is included as an
integral part of the current years financial statements, and is to be read in relation to the amounts and the disclosures relating to the
current year. The figures of the previous year are regrouped and reclassified wherever necessary to correspond to the figures of the
current year.

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Annual Report 2007-08

Annual Report 2007-08 | 1

Pioneer of modern retail in India, Shopper’s Stop Ltd.

Shoppers Stop has evolved its positioning to ‘Bridge to

At Shoppers Stop we believe in a world of limitless

We have also introduced a New symbol to the brand

Annual Report 2007-08 | 3

The Crossword Book Rewards loyalty programme had

Shoppers Stop First Citizen members contributed 65%

Annual Report 2007-08 | 5

Consumers are on a continuous journey of personal

Annual Report 2007-08 | 6

Annual Report 2007-08 | 7

It houses a host of international and domestic brands across

HomeStop is the first-of-its-kind premium home concept

It is a one-stop-shop for all home needs ranging from

Annual Report 2007-08 | 8

Its unique product mix of books, magazines, CD-ROMs,

Mothercare PLC of UK, the largest specialist retailer

Annual Report 2007-08 | 9

HyperCITY has redefined the experience of the Indian

Shopper’s Stop Ltd. has ventured into catalogue

Annual Report 2007-08 | 10

Desi café is the Indian fast food concept by Shopper’s

Annual Report 2007-08 | 11

M.A.C (Makeup-Art Cosmetics) the professional brand

Arcelia is a new retail concept aiming at the growing

Annual Report 2007-08 | 12

Shopper’s Stop Ltd. believes that the Indian consumers

Annual Report 2007-08 | 13

Annual Report 2007-08 | 14

We have introduced Shoppers Stop Radio, the first

Annual Report 2007-08 | 17

We believe that shopping today is not confined

Annual Report 2007-08 | 18

Shoppers Stop print advertising campaign, though

Annual Report 2007-08 | 19

Annual Report 2007-08 | 21

Our presence is not confined to our floor space.

In the year gone by we have opened new stores of

Annual Report 2007-08 | 22

Graphical Representation not to scale

Annual Report 2007-08 | 23

CHANDRU L. RAHEJA RAVI C. RAHEJA NEEL C. RAHEJA

GULU MIRCHANDANI SHAHZAAD DALAL NITIN SANGHAVI

DEEPAK GHAISAS NIRVIK SINGH B. S. NAGESH GOVIND SHRIKHANDE

Annual Report 2007-08 | 24

Balance Sheet Abstract and Company’s

Annual Report 2007-08 | 25

Annual Report 2007-08 | 26

endeavoured to be relevant to his/her “Think Green” initiative that involves the

Annual Report 2007-08 | 27

Chandru L. Raheja – Chairman Statutory Auditors

Finance Committee Solicitors

Shareholders Investor Grievance

Vice President – Legal &

Registered Office & Service Office

Annual Report 2007-08 | 28

Annual Report 2007-08 | 29

Profit before Depreciation & Tax 537.91 743.40

Profit before Tax 145.17 487.13

Profit after Tax 69.67 261.95

Proposed Dividend (incl. Dividend Distribution Tax) 61.17 61.12