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Notes to Accounts of Shoppers Stop Ltd.

Mar 31, 2016

1. SERVICE TAX

Pursuant to levy of service tax on renting of immovable properties given for commercial use, retrospectively with effect from 1 June, 2007, the Company has based on a legal advice, challenged the said levy and, inter-alia, its retrospective application. Pending the final disposal of the matter, which is presently before the Supreme Court, the Company continues not to provide for the retrospective levy aggregating to Rs.1,659.56 lacs for the period 1 June, 2007 to 31 March, 2010, (fully paid under protest).

2. Segment reporting

The Company is primarily engaged in the business of retail trade through retail and departmental store facilities, which in the terms of Accounting Standard 17 on ''Segment Reporting'', constitutes a single reporting segment.

3. DERIVATIVES

a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading and speculative purposes.

The Company expects to contribute Rs.390.13 lacs to its gratuity plan for the next year.

In assessing the Company''s post retirement liabilities, the Company monitors mortality assumptions and uses up-to-date mortality tables. The base being the LIC 1994-96 ultimate tables.

Expected return on plan assets is based on expectation of the average long-term rate of return expected on investments of the fund during the estimated term of the obligations.

The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The gratuity benefit scheme of the Company is managed by Life Insurance Corporation of India (LIC). The Company is currently awaiting the details of the composition of the plan assets, by category, from the LIC for the current and the previous years and hence the disclosures as required by Accounting Standard (AS) 15 on Employee Benefits have not been given.

4. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.


Mar 31, 2014

1. COMPANY BACKGROUND

Shoppers 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 through departmental stores. As at 31 March 2014, the Company operated through 67 such departmental stores located in different cities of India.

2. Other disclosures:

The Company has one class of equity shares having a par value of Rs. 5 per share. Each equity shareholder is eligible for one vote per share held. Each equity shareholder is entitled to dividends as and when the Company declares and pays dividend after obtaining shareholders'' approval. Dividends are paid in Indian Rupees.

During the year ended 31st March 2014, the amount of per share final dividend recognised as distribution to equity shareholders was Rs. 0.75 per share (2013: Rs. 0.75 per share).

3. 2014: Term Loans are secured by a first pari passu charge on stock, book debts, hypothecation charge on credit card/debit card receivables (Escrow account) and all the movable fixed assets of the Company, both present & future except ICICI Bank Term loans which is secured by first Pari Passu charge on the current assets and all the movable fixed assets of the Company both Present & Future excluding leasehold rights, lease deposits & Shoppers Stop Brands.

2013: Term Loans are secured by a first pari passu charge on stock, book debts, hypothecation charge on credit card/debit card receivables (Escrow account) and all the movable fixed assets of the Company, both present & future except ICICI Bank Term loans which is secured by first Pari Passu charge on the current assets and all the movable fixed assets of the Company both Present & Future excluding leasehold rights, lease deposits & Shoppers Stop Brands.

4. 2014: Term Loans are secured by a first pari passu charge on stock, book debts, hypothecation charge on credit card/debit card receivables (Escrow account) and all the movable fixed assets of the Company, both present & future except ICICI Bank Term loans which is secured by first Pari Passu charge on the current assets and all the movable fixed assets of the Company both Present & Future excluding leasehold rights, lease deposits & Shoppers Stop Brands.

2013: Term Loans are secured by a first pari passu charge on stock, book debts, hypothecation charge on credit card/debit card receivables (Escrow account) and all the movable fixed assets of the Company, both present & future except ICICI Bank Term loans which is secured by first Pari Passu charge on the current assets and all the movable fixed assets of the Company both Present & Future excluding leasehold rights, lease deposits & Shoppers Stop Brands.

5. There are no Micro and Small Enterprises, to whom the Company owes dues which are outstanding for more than 45 days during the year. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

6. CONTINGENT LIABILITIES AND COMMITMENTS:

(All amounts in lacs)

Mar-14 Mar-13

a) Claims against the Company not acknowledged as debts, comprising of:

(i) Income-tax claims disputed by the Company relating to disallowances aggregating 968.71 702.10

(ii) Service tax, Sales tax and other Indirect tax claims disputed by the Company relating to issues of applicability and classification aggregating 1,512.98 1,496.75

(iii) Third party claims arising from disputes relating to contracts aggregating 493.52 236.19

b) Other matters 227.25 52.25

c) Estimated amount of contracts remaining to be executed on capital account and not provided for 3,935.24 3,927.78

d) Corporate guarantee given jointly and severally with joint venture partners to banks for loans taken by Joint venture entities 825 00 1 338 57

e) Corporate guarantee given jointly and severally with the promoter group company for loans taken by Hypercity Retail (India) Ltd. 19,500.00 9,500.00

f) Bank Guarantees 371.36 379.62

Note: Future cash outflows in respect of (a) above are determinable only on receipt of judgements/decisions pending with various forums/authorities.

7. SERVICE TAX

Pursuant to levy of service tax on renting of immovable properties given for commercial use, retrospectively with effect from 1 June 2007 by the Finance Act, 2010, the Company has, based on a legal advice, challenged the said levy and, inter-alia, its retrospective application. The Hon''ble Supreme Court has passed an interim order dated 14th October, 2011, with regard to the levy of service tax on immovable properties rented out for commercial use including its retrospective applicability from 1st June, 2007 in compliance of which, the Company made an aggregate deposit of Rs. 1824.88 lakhs in respect of the liability for such service tax upto 30th September, 2011. From October, 2011, the Company is accounting and paying for such service tax regularly as per directives of Supreme Court.

Pending the final disposal of the matter, the Company continues not to provide for the retrospective levy aggregating Rs. 1,659.56 Lacs for the period 1st June, 2007 to 31st March, 2010.

Hypercity continues to make losses and the accumulated losses of Rs. 53,757.28 Lacs as at 31st March, 2014 have substantially eroded its Net worth as at the year end. Hypercity has business plans with strategic growth projections, which it is confident of achieving given the business opportunities in domestic retail and a continued financial support from the Company. Based on these plans, opportunities and business valuation by an independent valuer, the Company considers that there is no loss for which a provision is currently necessary in these financial statements.

8. Exceptional items comprise of (i) net loss of Rs. 29.56 Lacs relating to the Company''s inventory destroyed / damaged in a fire, in May 2013, at its store in Inorbit Mall, Pune. (ii) net loss of Rs. 37.84 Lacs (2013: Rs. 74.06 Lacs) relating to the Company''s assets destroyed / damaged in a fire, in June 2012, at its store at Koregaon Park, Pune. In respect of the above, the Company received insurance claims agrregating Rs. 1,100.20 Lacs (2013 : Rs. 500 Lacs) during the year.

9. SEGMENT REPORTING

The Company is primarily engaged in the business of retail trade through retail and departmental store facilities, which in the terms of Accounting Standard 17 on ''Segment Reporting'', constitutes a single reporting segment.

10. DERIVATIVES

a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading and speculative purposes.

The Company expects to contribute Rs. 203.04 lacs to its Gratuity plan for the next year.

In assessing the Company''s Post Retirement Liabilities, the Company monitors mortality assumptions and uses up-to-date mortality tables. The base being the LIC 1994-96 ultimate tables.

Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The gratuity benefit scheme of the Company is managed by Life Insurance Corporation of India (LIC). The Company is currently awaiting the details of the composition of the plan assets, by category, from the LIC for the current and the previous years and hence the disclosures as required by Accounting Standard (AS) 15 on Employee Benefits have not been given.

Note: The Company''s share in the assets, liabilities, income and expenses in Nuance Group (India) Private Limited is based on the audited financials for the year ended 31 December 2013.

11. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/ disclosure.


Mar 31, 2013

1. COMPANY BACKGROUND

Shoppers 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 through departmental stores. As at 31 March 2013, the Company operated through 55 such departmental stores located in different cities of India.

2. SERVICE TAX

Pursuant to levy of service tax on renting of immovable properties given for commercial use, retrospectively with effect from 1 June 2007 by the Finance Act, 2010, the Company has, based on a legal advice, challenged the said levy and, inter-alia, its retrospective application. The Hon''ble Supreme Court passed an interim order dated 14th October, 2011, with regard to the levy of service tax on immovable property rented out for commercial use including its retrospective applicability from 1st June, 2007 in compliance of which, the Company made an aggregate deposit of Rs. 1824.88 lacs in respect of the liability for such service tax upto 30th September, 2011. From October, 2011 the Company has been accounting and paying for such service tax regularly as per directives of the Supreme Court.

Pending the final disposal of the matter, the Company continues not to provide for the retrospective levy aggregating Rs. 1,659.56 Lacs for the period 1st June, 2007 to 31st March, 2010.

3. SEGMENT REPORTING

The Company is primarily engaged in the business of retail trade through retail and departmental store facilities, which in the terms of Accounting Standard 17 on ''Segment Reporting'', constitutes a single reporting segment.

4. DERIVATIVES

a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading and speculative purposes.

5. The Company''s assets (including inventory) were destroyed/damaged in a fire, on 21 June, 2012, at its store in Koregaon Park, Pune. The Company has filed claim with the insurance company and, the survey by the insurance company is under process. The Company is adequately insured (including for materials damage and for loss of profits) and has set up a receivable of Rs. 790.45 lacs (net of on account receipt of Rs. 500 lacs) from the insurance company in respect of the value of the asset destroyed/ damaged based on the company''s current best estimates and reasonable certainty considering the reports of the relevant authorities and the Company''s past experience. The net loss of Rs. 74.06 lacs on this account, primary on policy exclusions, has been disclosed as an exceptional item. The operations of the store remain suspended.

6. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.


Mar 31, 2012

1. COMPANY BACKGROUND

Shoppers 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. As at 31 March 2012, the Company operated through 51 such departmental stores located in different cities of India.

1.1 The Company simultaneously allotted 20,00,000 equity shares to Qualified Institutional Buyers (QIBs) and 40,00,000 equity shares to Promoters pursuant to the conversion of optionally convertible warrants for an aggregate issue price of Rs 12,980 lacs and Rs 12,287.20 lacs (Rs 3,071.80 lacs received in 2010 being 25% of total price) respectively. The premium received aggregated Rs 24,667.20 lacs.

1.2 The Board of Directors and shareholders of the Company at their meetings held on October 29, 2010 and December 23, 2010 respectively approved sub division of equity share of Rs10/- each into two equity shares of Rs 5/- each. The Company fixed January 13, 2011 as the Record Date, for the said sub division and as on date, the equity shares of the company were sub divided.

1.3 Other disclosures:

The Company has one class of equity shares having a par value of Rs 5 per share. Each equity shareholder is eligible for one vote per share held. Each equity shareholder is entitled to dividends as and when the Company declares and pays dividend after obtaining shareholders' approval. Dividends are paid in Indian Rupees.

During the year ended 31st March 2012, the amount of per share final dividend recognized as distribution to equity shareholders was Rs 0.75 per share (2011: Rs 0.75 per share)

2.1 Term Loans are secured by a first pari passu charge on stock, book debts, hypothecation charge on credit card/debit card receivables (Escrow account) and all the movable fixed assets of the Company, both present & future.

2.2 Term Loan of Rs 5,000 Lacs availed from HDFC Bank Ltd. @ 11.80% is repayable in 5 equal monthly installment from 9th December 2012 and term loan of Rs 2,500 lacs availed from Bank of India @11.75% is repayable on 7th June 2014.

3.1 There are no Micro, Small and Medium Enterprises, to whom the Company owes dues which are outstanding for more than 45 days during the year. This information as required to be disclosed under the Micro, Small and Medium Enterprise Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

(All amounts in Rs lacs) Mar-12 Mar-11

4. CONTINGENT LIABILITIES AND COMMITMENTS:

a) Claims against the Company not acknowledged as debts, comprising of:

(i) Income-tax claims disputed by the Company relating to disallowances 1,068.85 535.91

aggregating

(ii) Service tax, Sales tax and other Indirect tax claims disputed by the Company relating to issues of applicability and classification aggregating 1,419.05 33.55

(iii) Third party claims arising from disputes relating to contracts aggregating 236.19 236.19

b) Other matters 52.25 52.25

c) Estimated amount of contracts remaining to be executed on capital account and 2,427.87 3,194.26

not provided for

d) Corporate guarantee given jointly and severally with joint venture partners to banks 1,338.57 1,338.57 for loans taken by Joint venture entities

e) Corporate guarantee given jointly and severally with the promoter group company 5 000 00 - for loans taken by Hyper city Retail (India) Ltd.

f) Bank Guarantees 324.74 -

Note: Future cash outflows in respect of (a) above are determinable only on receipt of judgments/decisions pending with various forums/authorities.

5. SERVICE TAX

Pursuant to levy of service tax on renting of immovable properties given for commercial use, retrospectively with effect from 1 June 2007 by the Finance Act, 2010, the Company has, based on a legal advice, challenged the said levy and, inter-alia, its retrospective application. The Hon'ble Supreme Court has passed an interim order dated 14th October, 2011, with regard to the levy of service tax on immovable properties rented out for commercial use including its retrospective applicability from 1st June, 2007 in compliance of which, the Company has made an aggregate deposit of Rs 1,824.88 lacs in respect of the liability for such service tax upto 30th September, 2011. From October 2011, the Company is accounting and paying for such service tax regularly as per directives of the Supreme Court.

Pending the final disposal of the matter, the Company continues not to provide for the retrospective levy aggregating Rs 1,659.56 lacs for the period 1st June, 2007 to 31st March, 2010.

Hyper city continues to make losses and the accumulated losses of Rs 36,402.66 lacs as at 31st March, 2012 have substantially eroded its Net worth as at the year end. Hyper city has business plans with strategic growth projections, which it is confident of achieving given the business opportunities in domestic retail and a continued financial support from the Company. Based on these plans, opportunities and business valuation by an independent valuer, the Company considers that there is no loss for which a provision is currently necessary in these financial statements.

The Net worth of these companies have substantially been eroded as at 31st March, 2012. Based on the business plans of these companies and the business valuation by an independent valuer, no provision for any loss is currently considered necessary in these financial statements.

6. SEGMENT REPORTING

The Company is primarily engaged in the business of retail trade through retail and departmental store facilities, which in the terms of Accounting Standard 17 on 'Segment Reporting', constitutes a single reporting segment.

7. DERIVATIVES

a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency exposures relating to the underlying transactions and firm commitments. The company does not enter into any derivative instruments for trading and speculative purposes.

The following are the outstanding Forward Exchange Contracts entered into by the Company as at 31 March 2012.

The company expects to contribute Rs 133.75 lacs to its Gratuity plan for the next year.

In assessing the Company's Post Retirement Liabilities, the Company monitors mortality assumptions and uses up-to-date mortality tables. The base being the LIC 1994-96 ultimate tables.

Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The gratuity benefit scheme of the Company is managed by Life Insurance Corporation of India (LIC). The Company is currently awaiting the details of the composition of the plan assets, by category, from the LIC for the current and the previous years and hence the disclosures as required by Accounting Standard (AS) 15 on Employee Benefits have not been given.

8. On account of termination of the franchisee agreement with Crossword Bookstores Ltd. (CBL), a wholly owned subsidiary of the Company, the operations of "Crossword" were handed over to Crossword Bookstores Limited with effect from October 1, 2010. Accordingly, figures for the previous year are not comparable with those of the current year.

9. The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification/disclosure.


Mar 31, 2011

1. COMPANY BACKGROUND

Shoppers 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. As at 31 March 2011, the Company operated through 42 such departmental stores located in different cities of India.

2. Retail Turnover in the Profit and Loss account indicates the gross volumes of business and operations.

(All amounts in Rs. lacs)

Mar-11 Mar-10

3. CONTINGENT LIABILITIES IN RESPECT OF:

a) Guarantee given for loan taken by Joint venture companies from banks 1,338.57 4,490.00

b) Claims against the Company not acknowledged as debts comprise of:

(i) Disputed Income tax matters in appeal 535.91 245.42

(ii) Disputed sales tax matters in appeal 16.46 428.63

(iii) Disputed Customs Duty 17.09 24.00

c) Contingent contractual claims 236.19 236.19

d) Others 52.25 -

Note: Future cash outflows in respect of (b) above are determinable only on receipt of judgements/decisions pending with various forums/authorities.

4. SERVICE TAX

Pursuant to levy of service tax on renting of immoveable properties given for commercial use, retrospectively with effect from 1 June 2007 by the Finance Act, 2010, the Company has, based on a legal advice.challenged the said levy and, inter-alia, its retrospective application in various High Courts. An interim stay has been granted by various High Courts from recovery of the said service tax and the matter is pending. Accordingly, the Company has not provided for service tax aggregating to Rs. 1,619 lacs for the retrospective period upto 31 March 2010, which will be appropriately recognised on final determination.

5. SEGMENT REPORTING

The Company is primarily engaged in the business of retail trade through retail and departmental store facilities in India, which in the terms of Accounting Standard 17 on Segment Reporting1, constitutes a single reporting segment.

6. RELATED PARTY DISCLOSURES

Names of related parties and description of relationship:

(a) Subsidiaries Upasna Trading Limited, Shoppers Stop.com (India) Limited,

Shoppers Stop Services (India) Limited, Crossword Bookstores Limited.

Gateway Multichannel Retail (India) Limited.

Hypercity Retail (India) Limited, (w.e.f. 30 June 2010)

(b) Promoter directors having control/significant C. L. Raheja, Ravi C. Raheja, Neel C. Raheja influence over companies stated in (c) below

(c) Companies in which the persons stated in (b) above Ivory Properties and Hotels Private Limited, K. Raheja Corp. Private Limited have control/ significant influence K. Raheja Private Limited, Inorbit Malls (India) Private Limited

Avacado Properties and Trading India Private Limited, K. Raheja IT Park (Hyderabad) Private Limited

Trion Properties Private Limited

(d) Joint Ventures Nuance Group (India) Private Limited

Timezone Entertainment Private Limited

(e) Key Management Personnel Executive Director : Govind Shrikhande

Non Executive Directors: Chandru L. Raheja

Ravi Raheja Neel Raheja

B. S. Nagesh

Gulu L. Mirchandani

Shahzaad Dalal

Nitin Sanghavi

Deepak Ghaisas

Nirvik Singh

7. DERIVATIVES

a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency exposures relating to the underlying transactions and firm commitments. The company does not enter into any derivative instruments for trading and speculative purposes.

8. ESOP SCHEMES

b) New Schemes Launched

No new employees share based payment plans were formulated during the year. The compensation cost of stock options granted to employees is calculated using the intrinsic value of the stock options.

c) The weighted average contractual life of the options outstanding is 4.42 years

9. INTEREST IN JOINT VENTURES: March-11 March-10

V. CONTINGENT LIABILITIES 439.90 161.82

Note: The companys share in the assets, liabilities, income and expenses in Nuance Group (India) Private Limited is based on the audited financials for the year ended 31 December 2010.

10. EMPLOYEE BENEFITS

The company expects to contribute Rs. 101.05 lacs to its Gratuity plan for the next year.

In assessing the Companys Post Retirement Liabilities, the Company monitors mortality assumptions and uses up-to-date mortality tables. The base being the LIC 1994-96 ultimate tables.

Expected return on plan assets is based on expectation of the average long-term rate of return expected on investments of the fund during the estimated term of the obligations.

The estimates of future salary increases considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

11. EXCEPTIONAL ITEM

The Board of Directors of Gateway Multichannel Retail (India) Limited (Gateway) had in January 2009 decided to discontinue operations and the company had therefore made a provision for its investments and loans and advances aggregating to Rs. 2,486.40 lacs in the previous year. The impairment charge was disclosed as an "Exceptional item" in the Profit and Loss Account. During the year the Company has recovered Rs. 5.10 lacs from Gateway and has accordingly disclosed the credit as an "Exceptional item".

12. The Board of Directors and shareholders of the Company at their meetings held on October 29, 2010 and December 23, 2010 respectively approved sub-division of equity share of Rs. 10/- each into two equity shares of Rs. 5/- each. The Company fixed January 13, 2011 as the Record Date, for the said sub-division and as on date, the equity shares of the company were sub-divided. Accordingly, the basic and diluted EPS for the current and prior year have been computed on the basis of the said sub-division.

13 (i) During the year, the Company has simultaneously allotted 20,00,000 equity shares to Qualified Institutional Buyers (QIBs) and 40,00,000 equity shares to Promoters pursuant to the conversion of optionally convertible warrants for an aggregate issue price of Rs. 12,980 lacs and Rs. 12,287.20 lacs (Rs. 3,071.80 lacs received in 2010 being 25% of total price) respectively. The premium received aggregated Rs. 24,667.20 lacs.

14. On account of termination of the franchisee agreement with Crossword Bookstores Ltd. (CBL), a wholly-owned subsidiary of the Company, the operations of "Crossword" have been handed over to Crossword Bookstores Limited with effect from October 1, 2010 at book values. Accordingly, figures for the previous year are not comparable with those of the current year.

15. The Networth of these companies have been substantially eroded and these companies continue to make losses. Based on the business plans of these companies and the valuation of businesses by an independent valuer, no provision for any loss is currently considered necessary in these financial statements.

16a. During the year, the name of the Company was changed from Shoppers Stop Limited to Shoppers Stop Limited.

16b. Figures of the previous year are regrouped, where necessary, to conform to those of the current year.

 
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