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Directors Report of Shoppers Stop Ltd.

Mar 31, 2023

Your Board of Directors present the 26th Annual Report of Shoppers Stop Limited on the business and operations of the Company together with the Audited Financial Statements, for the financial year ended March 31, 2023 ("the year under review" or "the year" or "FY 2023").

This report is in accordance with the applicable provisions of the Companies Act, 2013 ("the Act") and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations").

FINANCIAL PERFORMANCE - AN OVERVIEW

(Rs. in Crores)
Particulars	For the year ended March 31, 2023	For the year ended March 31, 2022
Revenue from Operations	3,998.36	2,493.81
Other Income	56.07	166.05
Total Income	4,054.43	2,659.86
Profit / (Loss) before Interest, Depreciation, Tax & Exceptional Items	754.86	433.57
Less: Depreciation	381.60	351.97
Less: Finance costs	209.15	205.39
Profit / (Loss) before Tax & Exceptional Items	164.11	(123.79)
Exceptional Items	2.00	15.00
Profit / (Loss) before Tax	162.11	(138.79)
Less: Provision for Tax	42.86	(52.11)
Profit / (Loss) for the year (A)	119.25	(86.68)
Other comprehensive loss / (income) (B)	(0.27)	(0.82)
Total comprehensive income/(loss) for the year (A)-(B)	118.98	(87.50)

1. REVIEW OF OPERATIONS

Shoppers Stop Limited is part of the Retail Industry which continues to be one of the biggest and longterm sustainable business opportunities that our country offers. Indian Retail Industry has emerged as one of the most dynamic and fast-paced industries due to the opportunities it creates. It accounts for over 10% (Ten percent) of the country''s gross domestic product (GDP) and around 8% (Eight percent) of the employment. India is the world''s fifth- largest global destination in the retail space.

After two consecutive years of facing a challenging operating environment due to COVID-19 pandemic, the year under review came as a respite with improved market sentiment, which with efforts from your Company, enabled your Company to deliver robust growth over last year.

Your Company posted revenue from operations of C3,998 crores (as per GAAP financials), an increase of 60% over the previous year. The EBITDA stood at C755

crores (as per GAAP financials) an increase of 74% over the previous year.

As at the end of the year under review, your Company has 98 Departmental stores, 7 HomeStop stores, 142 Beauty stores and 23 Airport stores in India, under its operations.

Key Financial Highlights for FY 2022-23

(i) Your Company continued to deliver robust sales growth during the year, which was broad based with a healthy balance of price, volume and mix. All the Strategic Pillars of your Company have delivered. Your Company continues its sharp focus on robust growth on each one of them and reported highest ever revenue and profitability:

a) Revenue increased by 60% year-on-year to C3,998 crores in FY23.

b) EBITDA increased by 74% year-on-year to C755 crores in FY23.

c) Gross Margins was up by 210 bps year-on-year.

d) Private Brands revenue grew by 70% year-on- year.

e) Beauty Segment revenue was up by 54% year-on- year.

f) E-commerce sales grew by 8% year-on-year.

g) First Citizen member base at 9 million adding 0.24 million members during the year.

(ii) Overall Customer visits increased by 7% year-on-year in FY23. The Average Selling Price (ASP) gained 10% year-on-year and the Average Transaction Value (ATV) improved by 8% year-on-year. The ATV of your Company has consistently grown over the last 12 quarters.

(iii) Your Company reported a Profit Before Tax (PBT) of C162 crores against a loss of C139 crores in the previous year, while Profit After Tax (PAT) was C119 crores against a loss of C88 crores in the previous year

Operating Highlights for FY 2022-23:

(i) Your Company''s Store expansion is on track with continued investments in opening new stores and renovation of existing ones. Your Company spent a total of C206 crores in FY23 on capital expenditure, including C82 crores on New stores and H55 crores on Renovation stores. The highlights were as follows:

a) 23 stores opened during the year (11 Department and 12 Beauty)

b) Response from stores opened in Tier I/II was very encouraging on productivity as well as profitability front. We have opened 8 stores in Tier I/II out of the 11 department stores opened during this year.

c) 11 Department stores and 5 Beauty stores were renovated during the year. Your Company intends to renovate another 8-10 Department stores in FY24.

d) At the end of FY23, including the new stores opened and renovations done in last four years, 60% of your Company''s Department Stores are with new identity. Your Company intends to take this number to 70% for FY24.

(ii) Your Company''s wholly owned subsidiary, Global SS Beauty Brands Limited ("GSSBL") entered into Beauty distribution business and acquired exclusive distribution rights of 15 International brands from L''Oreal International Division (LID), Clarins, Earthi and NARS cosmetics. During the year, GSSBL onboarded

10 key retailers for distribution business and is in the process of onboarding a few more.

(iii) Your Company had launched co-branded credit card in partnership with HDFC Bank at the end of FY22 which gained good traction in the current financial year with 80K members enrolling during the year, thereby increasing business revenue.

(iv) With your Company''s continued focus on First Citizen Members, your Company targeted inactive members during the year leading to incremental sales. Your Company also created Exclusive Customer Engagement experiences such as Mixology, Golfing and Sailing, Farm experience, Grape Stomping and Makeover sessions for its Black card members.

(v) The physical and emotional wellbeing of employees continues to be a top priority for your Company. Your Company initiated various employee engagement activities and introduced employee friendly measures and policies during the year. Your Company has been recognised as one of the Top 10 retailers by "Great Place to Work".

2. DIVIDEND

In accordance with Regulation 43A of the Listing Regulations, your Company has adopted the ''Dividend Distribution Policy'', which sets out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its Members and / or retaining profits earned by your Company, from time to time. This Policy is annexed as Annexure I to this report and is also available on the Company''s corporate website at https://corporate. shoppersstop.com/wp-content/uploads/sp-client-document-manager/1/191b878-8de71.pdf.

I n view of the carried forward losses, and in order to conserve cash the Board of Directors of your Company are unable to recommend dividend on equity shares (previous year dividend - Nil).

3. RESERVES

There is no amount proposed to be transferred to the Reserves, for the year under review.

4. SUBSIDIARIES, ASSOCIATES, AND JOINT VENTURE

As on March 31, 2023, your Company has four wholly owned subsidiaries and one associate company (in terms of the Act) upto October 12, 2022, details whereof are as under:

Shoppers'' Stop.Com (India) Limited (SSCL):

SSCL was incorporated in year 2000 with an objective of advancing the online presence. SSCL posted net loss of C0.37 crores for the year under review, against a net profit of C0.85 crores in the previous year. During the year the SSCL''s turnover was C20.53 crores (previous year H16.81 crores).

Global SS Beauty Brands Limited (GSSBL) (Formerly known as Upasna Trading Limited)

GSSBL was incorporated in year 1995 as Upasna Trading Limited. During the year under review, (i) name of the company was changed from Upasna Trading Limited to Global SS Beauty Brands Limited with effect from June 20, 2022, with the certificate for name change being received from the Ministry of Corporate Affairs, Office of the Registrar of Companies, (ii) the object clause of the company was altered to widen its range of business activities to include beauty distribution, (iii) the Authorised Capital of the company was increased to C30 crores (equity share capital of C5 crores and preference share capital of C25 crores), (iv) the company did a right issue of 495,000 Equity Shares of C100 each and 2,000 - 0.01% Non-Cumulative Optionally Convertible Preference Shares (''NOCPS'') of C100,000 each (v) the company entered into Beauty distribution business and acquired exclusive distribution rights of 15 International brands from L''Oreal International Division (LID), Clarins, Earthi and NARS cosmetics. It also onboarded 10 key retailers for distribution business and is in the process of onboarding a few more.

During the year under review, GSSBL reported net profit of C0.90 crores for the year under review, against a net loss of C0.00 crores in the previous year. During the year its turnover was C14.02 crores (previous year Nil).

The other 2 (two) wholly owned subsidiaries of your Company viz. Shoppers Stop Brands (India) Limited (SSBIL) (Formerly known as Shopper''s Stop Services (India) Limited) and Gateway Multichannel Retail (India) Limited; had no operations during the year under review.

During the year under review, the name of Shopper''s Stop Services (India) Limited was changed to Shoppers Stop Brands (India) Limited with effect from June 23, 2022, with the certificate for name change being received from the Ministry of Corporate Affairs, Office of the Registrar of Companies.

available under the ESOP - 2020. Further 1,08,863 Options granted under ESOP - 2020 earlier, lapsed during the year under review.

(iii) granted (a) 9,51,327 ESOPs and 4,79,898 RSUs (Restricted Stock Units) on June 28, 2022,

(b) 15,091 ESOPs and 7,546 RSUs on July 25, 2022,

(c) 11,694 ESOPs and 5,847 RSUs on October 19, 2022, and (d) 27,519 ESOPs and 13,760 RSUs on January 23, 2023; under ESOP - 2022, to the eligible employees of the Company during the year under review, out of the pool of Options available under the ESOP - 2022. Further 1,70,621 ESOPs and 85,311 RSUs granted under ESOP -2022, lapsed during the year under review.

Statutory Information on ESOP: The disclosures requirements under the SEBI Regulations, for the aforesaid ESOP Scheme, in respect of the year ended March 31, 2023 are disclosed on the Company''s website and can be accessed using the link https:// corporate.shoppersstop.com/investors/annual-report/. Further, a certificate from KP Capital Advisors Private Limited-ESOP Direct, with respect to implementation of Employee Stock Option Plan in compliance with the Act, the SEBI Regulations and the Members'' approval, is obtained and shall be available for inspection by the Members. The Members desiring inspection may write at company.secretary@ shoppersstop.com to the Company Secretary.

A certificate from the secretarial auditors, M/s. Kaushal Dalal & Associates, Practicing Company Secretaries (FCS -7141, CP- 7512) is being obtained confirming that the ESOP Scheme has been implemented in accordance with the SEBI Regulations and in accordance with the resolution of the company, and shall be available for inspection by the Members. The Members desiring inspection may write at [email protected] to the Company Secretary.

7. PEOPLE

In your Company, our key priority is Health and Safety of our People. In the last two years, your Company has reinforced the importance of being a safe, inclusive and supportive place to work for all its employees. Health and safety of its employees, their families and the people in its extended value chain remained its #1 priority. Your Company continued to nurture a culture in which its people can thrive, become future-fit and bring their best selves to work.

Crossword Bookstores Private Limited (Crossword):

In terms of the Share Purchase Agreement (SPA) executed by your Company with M/s. Dinesh Gupta, Aakash Gupta & Family (Owners of Agarwal Business House) (ABH), your Company had agreed to sell the complete stake in Crossword, over a period of three years. Accordingly, your Company has further disposed of 1,56,24,376 equity shares of C10/-each constituting 39% of the share capital of the Crossword to ABH on April 8, 2022 and October 12, 2022 respectively, as per terms of SPA. Your Company now holds 10% of equity shares in Crossword. Accordingly, Crossword ceased to be an associate company in terms of the Act, with effect from October 12, 2022.

Your Company has no joint venture.

A separate statement containing the salient features of the Financial Statement of all above subsidiaries and associates in prescribed format of AOC -1, forms part of this Annual Report.

In accordance with the provisions of Section 136(1) of the Act, the Financial Statements of each of the aforesaid subsidiaries along with related information are available on your Company''s corporate website at https://corporate.shoppersstop.com/investors/ annual-report/ and the same are also available for inspection by the Members. The Members desiring inspection / interested in obtaining a copy of the Financial Statements may write at [email protected] to the Company Secretary.

Your Company has adopted a policy for determining material subsidiaries, which is part of the Company''s Policy on Related Party Transactions. The same is available on the Company''s corporate website at https://corporate.shoppersstop.com/investors/ policies/. As per this Policy, as on March 31, 2023 (for purpose of determining material subsidiary for the year under review), your Company did not have any material subsidiary. Pursuant to the capitalisation of GSSBL during the year under review, GSBBL shall be a material subsidiary w.e.f. April 1, 2023. As per applicable requirements, your Company is in the process of appointing one of the Independent Director on its Board, as an Independent Director of GSSBL.

5. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of Section 129(3) of the Act and Regulation 34 of the Listing Regulations, the Consolidated Financial Statements forms part

of this Annual Report. The Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) and Section 133 of the Act.

6. EMPLOYEES STOCK OPTION SCHEME / PLAN AND STATUTORY INFORMATION THEREON

Shoppers Stop Employee Stock Option Scheme 2008 (ESOP - 2008): The Members at 11th AGM held on July 29, 2008, had approved ESOP-2008 for issuance of the employee stock options (''''Options'''') to the eligible employees of the Company.

Shoppers Stop Employee Stock Option Scheme 2020 (ESOP 2020): The Members had by a special resolution passed by the way of postal ballot (remote e-voting) on December 03, 2020, approved ESOP-2020 for issuance of Options, in one or more tranches, not exceeding 10,00,000 (Ten Lakhs) to the eligible employees of your Company. Your Company has received in-principle approval for the same from the two stock exchanges where the Company is listed.

Shoppers Stop Employee Stock Option Scheme 2022 (ESOP 2022): The Members had by a special resolution passed by the way of postal ballot (remote e-voting) on June 04, 2022, approved ESOP-2022 for issuance of Options, in one or more tranches, not exceeding 20,00,000 (Twenty Lakhs) to the eligible employees of your Company. Your Company has received inprinciple approval for the same from the two stock exchanges where the Company is listed.

The ESOP 2008, ESOP 2020 and ESOP 2022 (collectively "ESOP") have been issued with the objective to promote desired behavior among employees for meeting the Company''s long-term objectives and enable retention of employees for desired objectives and duration, through a customised approach.

During the year under review your Company has:

(i) not granted Options under ESOP -2008.

(ii) granted 1,23,983 Options under ESOP - 2020, to the eligible employees of the Company during the year under review, out of the pool of Options

8. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company remains committed as a good Corporate Citizen to integrate social, environmental and economic concerns in its values and operations, to improve the welfare of the stakeholders and the Society as a whole.

Your Company has in place the CSR Committee ("the Committee"), which performs the functions as mandated under the Act and the Rules framed thereunder. The composition of the Committee is detailed in the Corporate Governance Report.

Further, your Board has adopted a Policy on CSR, in terms of the Act and the Rules framed thereunder and in accordance thereof, your Company undertakes activities / projects / initiatives and makes contributions, from time to time. The salient features of the said Policy are outlined in the Corporate Governance Report and the said Policy is made available on the Company''s corporate website at https://corporate.shoppersstop.com/investors/ policies/.

Pursuant to the provisions of Section 135 of the Act and Schedule VII thereto read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the prescribed CSR expenditure for the Financial Year 2022-23 is Nil.

9. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

i. Non-Independent Directors - Director Retiring by Rotation.

During the year under review, the Members at 25th AGM held on July 26, 2022, approved the reappointment of Mr. B.S. Nagesh (DIN: 00027595) as a Director of the Company, who was due to retire by rotation at the said AGM and being eligible, had offered himself for appointment.

In accordance with the Act and the Articles of Association of the Company, Mr. Ravi C. Raheja, (DIN: 00028044) is liable to retire by rotation at the ensuing AGM and being eligible, has offered himself for re- appointment as a Director liable to retire by rotation. Accordingly, the reappointment of Mr. Ravi C. Raheja, Non-Executive Director is being placed for the approval of the Members at the ensuing AGM. A brief profile of Mr. Ravi C. Raheja along with other related information forms part of the Notice convening the ensuing AGM.

ii. Independent Directors

During the year under review, Mr. Robert Bready (DIN: 06842835) resigned as an Non Executive Independent Director and Member of the Corporate Social Responsibility Committee of the Company with effect from January 23, 2023 and Mr. Deepak Ghaisas (DIN: 00001811) retired as a Non-Executive Independent Director on completion of his second tenure with effect from March 31, 2023 and ceased to be Chairman of the Audit Committee, Risk Management Committee and Member of Stakeholders Relationship Committee with effect from January 23, 2023. The Board places on record its appreciation for contribution made by them during their tenure as Independent Directors of your Company.

During the year under review, Mr. Mahesh Chhabria (DIN: 00166049) was appointed as an Additional and Non- Executive Independent Director of the Company, by the Board of Directors on January 23, 2023 for a term of 5 (five) consecutive years effective from January 23, 2023; and the appointment approved by Members through postal ballot on April 04, 2023. Also Ms. Smita Jatia (DIN: 03165703) was appointed as an Additional and Non- Executive Women Independent Director of the Company, by the Board of Directors on February 20, 2023 through a circular resolution for a term of 5 (five) consecutive years effective from February 20, 2023; and the appointment approved by Members through postal ballot on April 04, 2023.

Further, Mr. Mahesh Chhabria was appointed as Chairman of the Audit Committee, Risk Management Committee and Member of Stakeholder Relationship Committee and Corporate Social Responsibility Committee of the Company with effect from January 23, 2023. Ms. Smita Jatia was appointed as member of the Nomination, Remuneration & Corporate Governance Committee of the Company with effect from April 26, 2023.

iii. Declaration by Independent Directors

Your Company has received necessary confirmations/ declarations from each Independent Director of your Company confirming that they meet the criteria of independence as prescribed under the Act and the Listing Regulations. Based on such confirmations/ declaration, in the opinion of the Board, the Independent Directors of your Company fulfil the conditions specified

u nd er the Act, th e Ru les mad e th ereun d er an d Listing Regulations and are independent of the Management of your Company.

Further, your Company has received declaration from all Independent Directors confirming that they have ensured inclusion of their names in the Independent Directors'' data bank created and maintained by Indian Institute of Corporate Affairs within stipulated timeframe, as mandated by the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended.

The Independent Directors of your Company, who do not have this exemption, shall ensure clearance of online proficiency self- assessment test within the stipulated timeframe.

iv. Executive Directors

Mr. Venu Nair was appointed as Managing Director & CEO of the Company for a period of 3 years w.e.f. November 6, 2020, by the Board of the Company and his appointment was approved by the Shareholders of the Company at the 24th AGM held on July 29, 2021.

Further, Mr. Venu Nair has been re-appointed as the MD & CEO of the Company w.e.f. November 06, 2023 for period of 3 years subject to the approval of the members of the Company, which special business is included in the notice of the 26th AGM along with other necessary disclosures required under the Act and the Regulations. A brief profile of Mr. Venu Nair along with other related information forms part of the Notice convening the ensuing AGM.

v. Key Managerial Personnel

During the year under review, there were no changes in the Key Managerial Personnel of the Company.

10. PERFORMANCE EVALUATION

In compliance with the relevant provisions of the Act read with the Rules made thereunder and the Listing Regulations, the performance evaluation of the Board as a whole, its specified Statutory Committees, the Chairman of the Board and the Individual Directors was carried out for the year under review.

The evaluation process consisted of structured questionnaires covering various aspects of the functioning of the Board and its committees, such as composition, experience and competencies,

performance of specific duties and obligations, governance issues etc. The Board also carried out the evaluation of the performance of Individual Directors based on criteria such as contribution of the director at the meetings, strategic perspective or inputs regarding the growth and performance of the Company etc.

Further, the manner in which the annual evaluation was carried out and the outcome of the evaluation are explained in the Corporate Governance Report.

11. NOMINATION, REMUNERATION & CORPORATE GOVERNANCE COMMITTEE AND COMPANY''S POLICY ON NOMINATION, REMUNERATION, BOARD DIVERSITY, EVALUATION AND SUCCESSION.

Your Company has in place the Nomination, Remuneration & Corporate Governance Committee, which performs the functions as mandated under the Act and the Listing Regulations.

As on date the Committee comprises of four Independent Non- Executive Directors i.e. Mr. Nirvik Singh (Chairman), Mr. Arun Sirdeshmukh, Ms. Christine Kasoulis and Ms. Smita Jatia (appointed w.e.f. April 26, 2023); and one Promoter and NonExecutive Director Mr. Neel C. Raheja.

In terms of the Act and the Listing Regulations, the Board of Directors of your Company has framed and adopted a policy on appointment and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel (SMP) of the Company, which, inter-alia, includes Board Diversity, process of Evaluation of Directors, KMPs and SMPs of the Company, criteria for determining qualifications, positive attributes, independence of a Director and other related matters. The remuneration paid to Directors, KMP and SMP of the Company are as per the terms laid down in this Policy. The Managing Director & CEO of your Company does not receive remuneration or commission from any of the wholly owned subsidiaries of your Company. The salient features of the said Policy are outlined in the Corporate Governance Report and the said Policy is made available on the Company''s corporate website at https://corporate.shoppersstop.com/investors/ policies/.

12. DISCLOSURES UNDER THE ACT

Annual Return: The Annual Return filed for the year 2021- 22 in prescribed form MGT - 7, pursuant to Section 92 of the Act read with the Rules framed thereunder, is available on your Company''s corporate

website at https://corporate.shoppersstop.com/ investors/annual-report/ The draft of the Annual Return for the year 2022-23 in prescribed form MGT - 7, is also available on your Company''s corporate website at https://corporate.shoppersstop.com/investors/ annual-report/. The Company shall immediately after the filing of the Annual Return for the year 2022-23, make the same available on the website of your Company.

Meetings of the Board of Directors: A calendar of Meetings is prepared and circulated in advance to the Directors. The Board of Directors of your Company met 5 (five) times during the year under review. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Regulations. The details of the board meetings, the attendance of the Directors thereof and other particulars are provided in the Corporate Governance Report.

Change in the share capital: During the year under review, pursuant to the exercise of options under the Employee Stock Options Plan 2008 and Employee Stock Option Plan 2020, your Company issued and allotted 1,47,614 equity shares of the face value of C5 each and as a result, the share capital of the Company has increased from C54,75,01,125 (consisting of 10,95,00,225 equity share of C5 per share) to C54,82,39,195 (consisting of 10,96,47,839 equity share of C5 per share).

Audit Committee: During the year under review, Mr. Deepak Ghaisas ceased to be Chairman and Member of the Audit Committee with effect from January 23, 2023 and ceased to be a Non-Executive Independent Director on completion of second tenure with effect from March 31, 2023. Mr. Mahesh Chhabria is appointed as Chairman and Member of the Audit Committee with effect from January 23, 2023. The powers and role of the Committee are included in the Corporate Governance Report. During the year under review, all the recommendation made by the Committee were accepted by the Board.

As on date the Committee comprises of three Independent Non- Executive Directors i.e. Mr. Mahesh Chhabria (Chairman), Mr. Arun Sirdeshmukh, Ms. Christine Kasoulis; and one Promoter and NonExecutive Director Mr. Ravi C. Raheja.

Risk Management Committee: During the year under review, Mr. Deepak Ghaisas ceased to be Chairman and Member of the Risk Management Committee with effect from January 23, 2023 and ceased to be a Non-Executive Independent Director on completion

of second tenure with effect from March 31, 2023. Mr. Mahesh Chhabria is appointed as Chairman and Member of the Risk Management Committee with effect from January 23, 2023. The powers and role of the Committee are included in the Corporate Governance Report.

Related Party Transactions: All transactions with related parties are placed before the Audit Committee ("the Committee") for its approval. An omnibus approval from the Independent Directors of the Committee is obtained for the related party transactions which are repetitive in nature, based on the criteria specified and approved by the Board, based on recommendation of the Committee and transactions which are unforeseen for each financial year. The Committee and the Board reviews on a quarterly basis, all transactions entered into by your Company pursuant to the omnibus approvals so granted.

During the year under review, the policy on Related Party Transactions, amended as per changes in Listing Regulations and Act during the year and adopted by your Company is available on the Company''s corporate website at https://corporate.shoppersstop. com/investors/policies/

All transactions with Related Parties entered into during FY 2023, were in ordinary course of business and at arm''s length basis and in accordance with the provisions of the Act and the Rules made thereunder, the Listing Regulations and your Company''s Policy on Related Party Transactions.

During the year under review, there were no transactions which were material, considering the aforesaid Policy. Accordingly, no disclosure is made in respect of related party transaction in Form AOC - 2 in terms of Section 134 of the Act and Rules framed thereunder. There are no related party transactions that may have potential conflict with the interest of your Company at large or which warrants the approval of shareholders. The attention of the Members is drawn to the notes to the Standalone Financial Statement setting out the related party transactions disclosures for FY 2023.

Particulars of loans, guarantees or investments:

The details of the loans, guarantees or investments

covered under Section 186 of the Act, forms part of the Notes to the Standalone Financial Statements provided in this Annual Report.

Other Disclosures: The Board hereby states that no disclosure and / or reporting and / or details is required, in respect of the following matters, as there were no transactions on these matters and / or instances / requirement / applicability, during the year under review:

â¢ Deposits covered under Sections 73 and 74 of the Act read with Companies (Acceptance of Deposits) Rules, 2014.

â¢ I ssue of equity shares with differential rights as to dividend, voting or otherwise.

â¢ No significant or material orders were passed by the Regulators or Courts or Tribunals, impacting the going concern status of your Company and its operations in future.

â¢ There was no revision in the financial statements.

â¢ Maintenance of cost records in terms of Section 148 of the Act is not applicable to your Company.

â¢ No material changes and commitments affecting the financial position of your Company have occurred between the end of the financial year to which the financial statements relate and the date of this report, unless otherwise stated in the report.

â¢ No reporting in respect of the matters listed under Rule 8(5) (xi) and (xii) of the Companies (Accounts) Rules, 2014.

13. PREVENTION OF SEXUAL HARASSMENT (POSH)

Your Company continues to follow all the statutory requirements and guidelines in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act") and the Rules framed thereunder. The POSH Committee established as per the statutory requirements, continues to operate in every unit and the registered office. In case of any instances, employees are advised to approach the local POSH Committee and appropriate action in this regard is initiated post- detailed review of the matter. Your Company stands strong against any kind of sexual harassment and has zero tolerance for sexual harassment at workplace.

Every associate at the time of joining undergoes an extensive training on POSH through an e-learning module that covers the definition, guidelines and detailed coverage of policy on POSH. It also covers the rights and responsibilities of the employees under the POSH guidelines and Company''s policy. POSH Policy is uploaded on the internal intranet site. POSH helpline details are placed on the notice boards at all locations, for employees and other staff, to be aware about the provisions of the POSH Policy.

Your Company maintains a repository of all inquiries and documents as per the statutory guidelines and Company''s POSH Policy. The Internal Complaints Committee members of the POSH Committee have been trained to update them with the best practices in this area, including for circumstances of POSH arising in a virtual environment. There were 20 POSH cases received during the financial year and they were resolved as per the guidelines of POSH Act and Rules made thereunder.

14. RISK MANAGEMENT

Your Company reviewed the major risks including risks on account of business continuity, supply chain management, third party risks, legal compliance and other risks which may affect or has affected its operations, employees, customers, vendors and all other stakeholders from both the external and the internal environment perspective. Basis this review, appropriate actions have been initiated to mitigate, partially mitigate, transfer or accept the risk (if need be) and monitor such risks on a regular basis.

Details of various risks faced by your Company are provided in the Management Discussion & Analysis Report.

Your Company has its Risk Management Committee, which assists the Board in monitoring and reviewing the risk management plan, implementation of the risk management framework of your Company and such other functions as the Board may deem fit. The detailed terms of reference of the Risk Management

Committee and composition thereof, forms part of the Corporate Governance Report.

15. INTERNAL FINANCIAL CONTROL

Internal financial controls are an integral part of the risk management process, addressing financial and its financial reporting risks. The internal financial controls have been documented and embedded in the business processes. Your Company has laid down internal financial controls, through a combination of entity level controls, process level controls and IT general controls inter-alia, to ensure orderly and efficient conduct of business, including adherence to your Company''s policies and procedures, accuracy and completeness of accounting records and timely preparation and reporting of reliable financial statements/information, safeguarding of assets, prevention and detection of frauds and errors.

The evaluation of these internal financial controls is done through the internal audit process, established within your Company and also through appointing professional firm as the internal auditors to carry out such tests by way of systematic internal audit program. Based on the review of the reported evaluations, we believe that these systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended and for the preparation of financial statement for the year under review, that the applicable Accounting Standards have been followed and the internal financial controls related to financial statement are generally found to be adequate and were operating effectively and that no material weaknesses were noticed.

16. WHISTLE BLOWER / VIGIL MECHANISM

Your Company has established a Vigil Mechanism/ Whistle Blower policy in line with the Regulations 18 and 22 of the Listing Regulations and Section 177 of the Act. Your Company has engaged a third party for managing the "Ethics Hotline", which can be used by employees including brand staff, vendors and third-party vendor personnel. The Whistle Blower Policy is available on the website of the Company and can be accessed at https://corporate.shoppersstop.com/ wp-content/uploads/sp-client-document-manager/1/ bbb842f-9582.pdf.

further for placing complaints against sexual harassment, Insider Trading & other specific HR related matters. The mechanism adopted by your Company encourages to report genuine concerns or grievances and provides for adequate safeguards against victimisation of the Whistle Blower, who avail of such mechanism and also provide for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. We affirm that no employee of your Company was denied access to the Audit Committee. The guidelines are designed to ensure that stakeholders may raise any concern on integrity, value adherence without fear of being punished for raising that concern. This third party managed ''Ethics Hotline'' provide independence and comfort to the designated personnel to blow the whistle in case they have any issues worth reporting.

17. CORPORATE GOVERNANCE REPORT

Pursuant to the Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with a certificate from S R B C & CO LLP, the Statutory Auditors of the Company, confirming its compliance, forms part of this Annual Report.

18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, on the business operations / performance review, as stipulated under the Listing Regulations, forms part of this Annual Report.

19. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

20. AUDITORS & AUDITORS'' REPORT

Statutory Auditors

M/s. S R B C & CO LLP (Registration No. 324982E/ E300003), Chartered Accountants, were re-appointed as Statutory Auditors of the Company by the Members for a second term of five (5) years i.e. from conclusion of the 25th AGM till the conclusion of 30th AGM.

The Auditors Report given by S R B C & CO LLP, Statutory Auditors, on the financial statements of the Company for the year ended March 31, 2023 forms

part of the Annual Report. The Auditor''s Report does not contain any qualification, reservation or adverse remark. However, the statutory auditor has drawn attention i.e. an Emphasis of Matter with regard to Note No. 30(ii) of the Standalone Ind AS Financial Statements [Note No. 29(ii) of the Consolidated Ind AS Financial Statements] in their report, details of which are as follows:

Litigation

We draw attention to Note 30(ii) to the standalone and Note 29(ii) to the consolidated Ind AS financial statements which, describes the uncertainty related to the outcome of the appeal filed before the Supreme Court regarding nonprovision of retrospective levy of service tax for the period from June 1, 2007 to March 31, 2010 on renting of immovable properties given for commercial use, aggregating to C16.60 crores Standalone and C20.11 crores Consolidated.

Detailed explanation in respect of the matter has been provided under Note 30(ii) of standalone Ind AS financial statements Note No. 29 (ii) of the Consolidated Ind AS Financial Statements.

During the year under review, the Auditor has not reported any fraud and therefore no detail are required to be disclosed under Section 134(3) (ca) of the Act.

Secretarial Auditors

The Secretarial Audit Report for FY2023 issued by M/s. Kaushal Dalal & Associates, Practicing Company Secretaries (FCS- 7141, CP-7512) the Secretarial Auditor for the year under review, is annexed as Annexure III to this report. The said report does not contain any qualification, reservation, adverse remark or disclaimer.

During the year under review, the above Auditors have not reported any fraud and therefore no details are required to be disclosed under Section 134(3) (ca) of the Act.

21. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy and technology absorption, as stipulated under the Act read with the Rules made thereunder, is annexed as Annexure IV to this Report. The foreign exchange earnings were C115.71 crores (Previous Year C33.69 crores) and outgo was C27.43 crores (Previous Year C8.41 crores), for the year under review.

22. PARTICULARS OF EMPLOYEES ANDRELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended ("Rules"), disclosures pertaining to ratio of remuneration and other details as required therein are annexed as Annexure V to this Report.

Having regard to the provisions of the second proviso to Section 136(1) of the Act, the Annual Report excluding the information showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Section 197(12) of the Act read with rules 5(2) and 5(3) of the Rules, is being sent to the Members of the Company and others entitled thereto. The said information is available for inspection by the Members. The Members desiring inspection/ interested in obtaining copy thereof, may write at [email protected] to the Company Secretary. The Annual Report including the aforesaid information is made available on the Company''s corporate website.

23. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Act, the Directors of your Company, to the best of their knowledge and based on the information and explanations received from your Company, hereby confirm that:

a. In the preparation of the annual accounts for the year under review, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

b. The Directors have selected appropriate accounting policies and have applied them consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2023, and of the profit of the Company, for the year under review.

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. The annual accounts have been prepared on a going concern basis.

e. Proper internal financial controls to be followed by the Company were laid down and such internal financial controls were adequate and operating effectively.

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

24. SECRETARIAL STANDARDS

During the year under review, your Company has complied with the Secretarial Standards, issued by the Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs, in terms of Section 118(10) of the Act.

25. AWARDS AND ACCOLADES

During the year under review, your Company received many awards and felicitations conferred by reputable organisations, some of them are:

â¢ ''India''s Best Workplaces for Women 2022''

â¢ ''India''s Top 10 Best Workplaces for Retail 2023''

â¢ ''India''s Best Workplace Top 10 in Health & Wellness 2022'' across industries

26. ACKNOWLEDGEMENT

We thank our customers, business partners, suppliers, bankers and shareholders for their continued support during the year. We thank the Government of India, the State Governments where we have business operations and other government agencies for their support and look forward to their continued support in the future.

We place on record our sincere appreciation towards the contribution made by all Customer Care Associates at all levels.

For Shoppers Stop Limited

Place: Mumbai B. S. Nagesh

Date: April 26, 2023 Chairman

Mar 31, 2022

Your Board of Directors present the 25th Annual Report of Shoppers Stop Limited on the business and operations of the Company together with the Audited Financial Statements, for the financial year ended March 31, 2022 ("the year under reviewâ or "the yearâ or "FY 2022â).

This report is in accordance with the applicable provisions of the Companies Act, 2013 ("the Actâ) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulationsâ).

FINANCIAL PERFORMANCE - AN OVERVIEW

(Rupees in Crores)
Particulars	For the year ended 31 March 2022	For the year ended 31 March 2021
Retail Turnover
Own merchandise - Gross of tax	2,651.95	1,834.07
Less: Goods and Service Tax	309.51	208.20
	2,342.44	1,625.87
Other Retail Operating Revenue	151.37	99.22
Revenue from Operations	2,493.81	1,725.09
Other Income	166.05	218.77
Total Income	2,659.86	1,943.86
Profit before Interest, Depreciation, Tax & Exceptional Items	433.57	272.13
Less: Depreciation	351.97	384.69
Less: Finance costs	205.39	219.97
Profit before Tax & Exceptional Items	(123.79)	(332.53)
Exceptional Items	15.00	22.40
Profit before Tax	(138.79)	(354.93)
Less: Provision for Tax	(52.11)	(79.71)
Profit for the year (A)	(86.68)	(275.22)
Other comprehensive loss / (income) (B)	(0.82)	(22.84)
Total comprehensive income/(loss) for the year (A)-(B)	(87.50)	(252.38)

1. REVIEW OF OPERATIONS

Shoppers Stop Limited is part of the Retail Industry which continues to be one of the biggest and long-term sustainable business opportunities that our country offers. Indian Retail Industry has emerged as one of the most dynamic and fast-paced industries due to the opportunities it creates. It accounts for over 10% (ten percent) of the country''s gross domestic product (GDP) and around 8% (eight percent) of the employment. India is the world''s fifth-largest global destination in the retail space.

The operating environment continued to be challenging for the second consecutive year. COVID-19 pandemic continued to effect the operations of your Company with the impact being maximum in the first quarter. The second half of the year witnessed a moderated recovery, but Omicron partially dampened such recovery in Q4.

Your Company posted revenue from operations of '' 2,493.81 crores (as per GAAP financials), an increase of 44.56% over the previous year. The EBITDA stood at '' 433.57 crores (as per GAAP financials) an increase of 59.32% over the previous year.

As at the end of the year under review, your Company has 88 Departmental stores, 11 HomeStop stores, 136 Beauty stores and 24 Airport stores in India, under its operations.

Key financial highlights for FY 2021-22

(i) Given your Company''s vast network of physical stores, the Company witnessed a strong recovery due to easing off restrictions, the return-to-office trend and the higher customer footfalls.

a) Revenue increases by 45% year-on-year to '' 2,493.81 Crores in FY22

b) Gross Margins up by 70bps year-on-year

c) Private Brands revenue grows by 45% year-on-year

d) Beauty Segment revenue up by 55% year-on-year

e) E-commerce sales grow by 59% year-on-year

(ii) Overall customer footfall increased by 56% year-on-year in FY22. The Average Selling Price (ASP) also

gained 18% year-on-year and the Average Transaction Value (ATV) improved by 15% year-on-year.

(iii) Improved margins on back of higher volumes, better operating leverage, cost rationalization, store optimization, prudent inventory management and net debt of '' 16 crores are potential triggers that would sustain your Company''s performance.

(iv) Losses were significantly reduced by 65% to '' (87.50) crores on GAAP Financials.

Operating Highlights for FY 2021-22 are as follows:

(i) Back on track with the store expansion strategy with continued investments in opening new stores and renovating existing ones at a capex of '' 46 crores in Q4 (For FY22''101 Crores)

a) 24 stores opened during the year (8 Departmental and 16 Beauty/Airport).

b) 4 stores, (2 Departmental and 2 Beauty) currently under fit-out, are expected to open in the Q1 of FY23.

c) 9 stores were renovated during the year. Your Company intends to renovate another 8 Department stores in FY23.

d) As on FY22, including the new stores opened and renovations done in last three years, 40% of your Company''s Department Stores are with new identity. Your Company intends to take the number to 54% for FY23.

(ii) Your Company launched co-branded credit card in partnership with HDFC Bank that is expected to bring unmatched benefits HDFC and Shoppers Stop customers, while improving customer retention and business revenue.

(iii) The physical and emotional wellbeing of employees continues to be a top priority for your Company, with several initiatives to support employees and their families during the pandemic and vaccination drives for employees were arranged for all the stores and service office. Your Company has initiated various employee engagement activities online and introduced employee friendly measures and policies.

(iv) Your Company continues to evaluate the operations and has firm plans to bounce back from the contemporary crises. Our key investments in Digitalisation, and further strengthening our strategic pillars of First Citizen Members, Personal Shoppers, Exclusive Brands and Beauty, will help us put forth a resilient and sustainable business model.

Significant change during the year in Accounting as follows:

(i) As per Indian Accounting Standard (Ind AS) 116, which has come into effect from April 01, 2019, and is a significant deviation from the earlier Ind AS 17, which recognised the lease expense as an expense on accrual basis, under Ind AS 116 the expense is split into interest & depreciation. Consequently, the EBIDTA as per GAAP accounts is significantly higher by '' 381.54 crores. Further, Ministry of Corporate Affairs vide notification dated July 24, 2020 and June 18, 2021 issued an amendment to Ind AS 116- Leases, by inserting a practical expedient w.r.t. "COVID-19 Related Rent Concessionsâ effective from the period beginning on or after April 01, 2020. Pursuant to the above amendment, your Company has applied the practical expedient by accounting the unconditional rent concessions in "Other incomeâ amount to ''107.63 crores in the Statement of Profit and Loss.

Further, analysis of operating performance is carried under Management Discussion and Analysis, which forms part of this Annual report.

2. DIVIDEND

In view of the financial position of your Company, and losses during the year under review, and in order to conserve cash the Board of Directors of your Company are unable to recommend dividend on equity shares (previous year dividend - Nil).

3. RESERVES

There is no amount proposed to be transferred to the Reserves, for the year under review.

4. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE

During the year under review, Crossword Bookstores Private Limited (previously known as Crossword Bookstores Limited) ceased to be the wholly owned subsidiary of your Company. As on March 31, 2022, your Company has four wholly owned subsidiaries and one associate, details whereof are as under:

Crossword Bookstores Private Limited (Crossword):

In terms of the Share Purchase Agreement (SPA) executed by your Company with Messrs Dinesh Gupta, Aakash Gupta & Family (Owners of Agarwal Business House) (ABH), your Company agreed to sell the majority stake in Crossword, over a period of three years. Accordi ngly, in the first tranche the Company disposed of 2,04,31,875 equity shares of '' 10/-each constituting 51% of the share capital of Crossword to ABH on October 11, 2021. Crossword accordingly ceased to be a wholly owned subsidiary of your Company. The articles of association of Crossword have been altered to reflect the understanding under the SPA. The representatives of your Company except Mr. Karunakaran Mohansundaram have ceased to be directors of Crossword.

Further, before the aforesaid sale, Crossword increased its authorised share capital from '' Twenty crores ('' 20 crores) to '' Forty crores and fifty lacs ('' 40.50 crores). Further, your Company fully subscribed to the right issue of Crossword of '' Twenty six crores and fifty lacs ('' 26.50 crores) consisting of 2,65,00,000 (two crore sixty five lacs) equity shares of '' Ten each ('' 10/- each)

On March 28, 2022, the status of Crossword changed from Public Limited to Private Limited.

Further, your Company has disposed of 78,12,188 equity shares of '' 10/- each constituting 19.50 % of the share capital of the Crossword to ABH on April 08, 2022 as per terms of SPA . Your Company now holds 29.50% of equity shares in Crossword. Accordingly, Crossword continues to be an Associate Company.

Shoppers'' Stop.Com (India) Limited (SSCL):

SSCL was incorporated in year 2000 with an objective of advancing the online presence, which after taking a slow start became operationalised to a large extent, during the year under review, with the high focus on online business activities. SSCL posted net profit of '' 0.85 crores for the year under review, against a net loss of ''1.37 crores in the previous year. During the year the SSCL''s turnover was '' 16.81 crores (previous year '' 2.32 crores).

The other 3 (three) wholly owned subsidiaries of your Company viz.: Upasna Trading Limited; Shopper''s Stop Services (India) Limited and Gateway Multichannel Retail (India) Limited; had no operations during the year under review.

During the year under review, Shopper''s Stop Services (India) Limited altered its Object Clause to widen its range of business activities.

Your Company has no joint venture.

A separate statement containing the salient features of the Financial Statement of all above subsidiaries and associates in prescribed format of AOC -1 forms part of this Annual Report.

In accordance with the provisions of Section 136(1) of the Act, the Financial Statements of each of the aforesaid subsidiaries along with related information are available on your Company''s corporate website at https://corporate. shoppersstop.com/investors/annual-report/and the same are also available for inspection by the Members. The Members desiring inspection / interested in obtaining a copy of the Financial Statements may write at company. secretary@ shoppersstop.com to the Company Secretary.

5. CONSOLIDATED FINANCIAL STATEMENTS

I n accordance with the provisions of Section 129(3) of the Act and Regulation 34 of the Listing Regulations, the Consolidated Financial Statements forms part of this Annual Report. The Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) and Section 133 of the Act.

6. EMPLOYEES STOCK OPTION SCHEME / PLAN AND STATUTORY INFORMATION THEREON

Shoppers Stop Employee Stock Option Scheme 2008 (ESOP - 2008): The Members at 11th AGM held on July 29, 2008, had approved ESOP -2008 for issuance of the employee stock options (''''Options'''') to the eligible employees of the Company.

Shoppers Stop Employee Stock Option Scheme 2020 (ESOP

- 2020): The Members had by a special resolution passed by the way of postal ballot (remote e-voting) on December 3, 2020, approved ESOP-2020 for issuance of Options, in one or more tranches, not exceeding 10,00,000 (Ten Lacs) to the eligible employees of your Company. Your Company has received in-principle approval for the same from the two stock exchanges where the Company is listed.

Shoppers Stop Employee Stock Option Scheme 2022 (ESOP

- 2022): Based on the recommendation of the Nomination, Remuneration & Corporate Governance Committee, the Board of Directors of your Company have subject to the receipt of approval of Members through postal ballot along with in-principle approvals from the stock exchanges, approved ESOP-2022 for issuance of the employee stock options ("options") to the eligible employees of your Company at their meeting held on April 28, 2022. Your Company shall be approaching Members for there approval to ESOP- 2022 through postal ballot.

The ESOP 2008 and ESOP 2020 (collectively "ESOP") have been issued with the objective to promote desired behavior among employees for meeting the Company''s long-term objectives and enable retention of employees for desired objectives and duration, through a customized approach.

The Nomination, Remuneration & Corporate Governance Committee of your Company, inter-alia, administers and monitors ESOP, implemented by your Company in accordance with the Act and the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended ("the SEBI Regulations"). During the year under review, your Company has not granted Options under ESOP - 2008, out of the pool of Options available under ESOP-2008 (including 14,995 Options which lapsed during the year under review). Further, 28,671 were granted on July 29, 2021 and 34,147 Options were granted on March 29, 2022 under ESOP - 2020 to the eligible employees of the Company during the year under review, out of the pool of Options available under the ESOP - 2020 (including 94,196 Options which lapsed during the period under review).

Statutory Information on ESOP: The disclosures requirements under the SEBI Regulations, for the aforesaid ESOP Scheme, in respect of the year ended March 31, 2022 are disclosed on the Company''s website and can be accessed using the link https://corporate.shoppersstop. com/investors/annual-report/. Further, a certificate from KP Capital Advisors Private Limited-ESOP Direct, with respect to implementation of Employee Stock Option Plan in compliance with the Act, the SEBI Regulations and the Members'' approval, is obtained and shall be available for inspection by the Members. The Members desiring inspection may write at company.secretary@ shoppersstop.com or to the Company Secretary.

A certificate from the secretarial auditors, M/s. Kaushal Dalal & Associates, Practicing Company Secretaries (FCS -7141, CP- 7512) is obtained confirming that the ESOP Scheme has been implemented in accordance with the SEBI Regulations and in accordance with the resolution of the company, and shall be available for inspection by the Members. The Members desiring inspection may write at [email protected] or to the Company Secretary.

7. PEOPLE

I n Your Company our key priority is Health and Safety of our People. In the last two years, your Company has

reinforced the importance of being a safe, inclusive and supportive place to work for all its employees. Health and safety of its employees, their families and the people in its extended value chain remained its #1 priority. Your Company continued to nurture a culture in which its people can thrive, become future-fit and bring their best selves to work.

Your Company was conferred as 2nd Best Large Retail Company by Ambition Box and 14th Best Large Company by Ambition Box and your Company also won Indian Retail Champions Best Departmental Store Award- RAI.

8. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company had approved a CSR Budget of ''1.05 crores to be spent on a focused program for Women Empowerment through generating Livelihood and Menstrual Health Awareness & Access, to be run by an NGO, Goonj in partnership with your Company. However, due to the then ongoing COVID-19 pandemic, the start of the work on the CSR project was delayed and the Company could only release ''0.30 crores to Goonj in Financial year 2020-21, being the amount spent during the said Financial year.

Your Company in terms of its obligation under Section 135(6) of the Companies Act, 2013, transferred on April 12, 2021, ''0.75 crores being the amount remaining unspent under the ongoing CSR Project for the Financial Year 20202021, out of the budgeted amount of ''1.05 crores, to a special bank account.

Your Company has during the year under review, received certificate from Goonj confirming expenditure of the aforesaid balance unspent CSR amount of ''0.75 crores. A brief outline of the CSR Philosophy and the report on CSR activities containing therein, for the period under review is enclosed as Annexure II to this report.

9. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

i. Non-Independent Directors - Director Retiring by Rotation.

During the year under review, the Members at 24th AGM held on July 29, 2021, approved re- appointment of Mr. Neel C. Raheja (DIN: 00029010) as the Director of the Company, who was due to retire by rotation at the said AGM and being eligible, had offered himself for appointment.

In accordance with the Act and the Articles of Association of the Company, Mr. B.S. Nagesh, (DIN: 00027595) is liable to retire by rotation at the ensuing AGM and being eligible, has offered himself for reappointment as a Director liable to retire by rotation. Accordingly, the re-appointment of Mr. B.S. Nagesh, Chairman and Non-Executive Director is being placed for the approval of the Members at the ensuing AGM. A brief profile of Mr. B.S. Nagesh along with other related information forms part of the Notice convening the ensuing AGM.

ii. Independent Directors

During the year under review, Mr. William Kim (DIN: 08750326) and Ms. Ameera Shah (DIN: 00208095) resigned as an Non-Executive Independent Director and Member of the Audit Committee, Risk Management Committee and Nomination Remuneration & Corporate Governance Committee of the Company with effect from January 20, 2022. The Board places on record its appreciation for contribution made by them during their tenure as Independent Directors of your Company.

During the year under review, Mr. Arun Sirdeshmukh (DIN: 01757260) and Ms. Christine Kasoulis (DIN: 09365330) were appointed as Additional and NonExecutive Independent Directors of the Company by the Board of Directors on October 20, 2021 for a term of 5 (five) consecutive years effective from October 20, 2021, subject to approval of the Members at 25th AGM of the Company. Further, Mr. Arun Sirdeshmukh and Ms. Christine Kasoulis were appointed as Members of the Audit Committee, Risk Management Committee and Nomination Remuneration & Corporate Governance Committee of the Company through circular resolution passed on January 03, 2022.

The necessary resolution(s) seeking your approval for their appointment as Independent Directors of your Company are included in the notice of the 25th AGM along with other necessary disclosures required under the Act and the Regulations.

iii. Declaration by Independent Directors

Further, your Company has received declaration from all Independent Directors (excluding Mr. Arun Sirdeshmukh and Ms. Christine Kasoulis) confirming that they have ensured inclusion of their names in the Independent Directors'' data bank created and maintained by Indian Institute of Corporate Affairs within stipulated timeframe, as mandated by the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended.

The Independent Directors of your Company, who do not have this exemption, shall ensure clearance of online proficiency self- assessment test within the stipulated timeframe.

iv. Key Managerial Personnel

Mr. Vijay Kumar Gupta, appointed as Interim Company Secretary & Compliance Officer of the Company on January 15, 2021, has been confirmed and appointed as Company Secretary & Compliance Officer of the Company i.e. July 29, 2021.

During the year under review, there were no changes in the Key Managerial Personnel of the Company.

10. PERFORMANCE EVALUATION

I n compliance with the relevant provisions of the Act read with the Rules made thereunder and the Listing Regulations, the performance evaluation of the Board as a whole, its specified Statutory Committees, the Chairman of the Board and the Individual Directors was carried out for the year under review.

The evaluation process consisted of structured questionnaires covering various aspects of the functioning of the Board and its committees, such as composition, experience and competencies, performance of specific

duties and obligations, governance issues etc. The Board also carried out the evaluation of the performance of Individual Directors based on criteria such as contribution of the director at the meetings, strategic perspective or inputs regarding the growth and performance of the Company etc.

Further, the manner in which the annual evaluation was carried out and the outcome of the evaluation are explained in the Corporate Governance Report.

11. NOMINATION, REMUNERATION & CORPORATE GOVERNANCE COMMITTEE AND COMPANY''S POLICY ON NOMINATION, REMUNERATION, BOARD DIVERSITY, EVALUATION AND SUCCESSION

Your Company has in place the Nomination, Remuneration & Corporate Governance Committee, which performs the functions as mandated under the Act and the Listing Regulations. The composition of the Committee is detailed in the Corporate Governance Report.

During the year under review, Mr. Arun Sirdeshmukh and Ms. Christine Kasoulis, Non-Executive Independent Directors were appointed as the Members of the Nomination, Remuneration & Corporate Governance Committee on January 03, 2022. Further, Mr. William Kim and Ms. Ameera Shah, Non-Executive Independent Directors ceased to be Members of the Committee with effect from January 20, 2022.

The necessary resolution(s) seeking your approval for appointment of Mr. Arun Sirdeshmukh and Ms. Christine Kasoulis, Non-Executive Additional Independent Directors as Independent Directors is included in the notice of the 25th AGM along with other necessary disclosures required under the Act and the Regulations.

I n terms of the Act and the Listing Regulations, the Board of Directors of your Company has framed and adopted a policy on appointment and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel (SMP) of the Company, which, inter-alia, includes Board Diversity, process of Evaluation of Directors, KMPs and SMPs of the Company, criteria for determining qualifications, positive attributes, independence of a Director and other related matters. The remuneration paid to Directors, KMP and SMP of the Company are as per the terms laid down in this Policy. The Managing Director & CEO of your Company does not receive remuneration or commission from any of the wholly owned subsidiaries of your Company. The salient features of the said Policy are outlined in the Corporate Governance Report and the said Policy is made available on the Company''s corporate website at https://corporate. shoppersstop.com/investors/policies/.

12. DISCLOSURES UNDER THE ACT

Annual Return: The Annual Return filed for the year 202021 in prescribed form MGT - 7, pursuant to Section 92 of the Act read with the Rules framed thereunder, is available on your Company''s corporate website at https://corporate. shoppersstop.com/investors/annual-report/ The Company shall immediately after the filing of the Annual Return for the year 2021-22, make the same available on the website of your Company.

Meetings of the Board of Directors: A calendar of Meetings is prepared and circulated in advance to the Directors. The Board of Directors of your Company met 7 (seven) times during the year under review. The intervening gap between the Meetings was within the period prescribed under the Act and the Listing Regulations. The details of the board meetings, the attendance of the Directors thereof and other particulars are provided in the Corporate Governance Report.

Change in the share capital: During the year under review, pursuant to the exercise of options under the Employee Stock Options Plan 2008, your Company issued and allotted 1,41,315 equity shares of the face value of '' 5 each and as a result, the share capital of the Company has increased from '' 54,67,94,550 (consisting of 10,93,58,910 equity share of '' 5 per share) to '' 54,75,01,125 (consisting of 10,95,00,225 equity share of '' 5 per share).

Audit Committee: During the year under review, the Company renamed its Audit and Risk Management Committee with effect from October 20, 2021 as Audit Committee.

As on date, the Committee comprises of three Independent Non- Executive Directors i.e. Mr. Deepak Ghaisas (Chairman), Mr. Arun Sirdeshmukh, Ms. Christine Kasoulis; and one Promoter and Non-Executive Director Mr. Ravi C. Raheja.

During the year under review, Mr. Arun Sirdeshmukh and Ms. Christine Kasoulis, Non-Executive Independent Directors were appointed as the Members of the Audit Committee on January 03, 2022. Further, Mr. William Kim and Ms. Ameera Shah, Non-Executive Independent Directors ceased to be Members of the Committee with effect from January 20, 2022. The powers and role of the Committee are included in the Corporate Governance Report. During the year under review, all the recommendation made by the Committee were accepted by the Board.

Risk Management Committee: During the year under review, the Company constituted the Risk Management

Committee along with its terms of reference with effect from October 20, 2021.

As on date, the Committee comprises of three Independent-Non- Executive Directors i.e. Mr. Deepak Ghaisas (Chairman), Mr. Arun Sirdeshmukh and Ms. Christine Kasoulis (Members) and one Promoter and Non-Executive Director, Mr. Ravi C. Raheja.

During the year under review, Mr. Arun Sirdeshmukh and Ms. Christine Kasoulis, Non-Executive Independent Directors were appointed as the Members of the Risk Management Committee on January 03, 2022. Further, Mr. William Kim and Ms. Ameera Shah, Non-Executive Independent Directors ceased to be Members of the Committee with effect from January 20, 2022.The powers and role of the Committee are included in the Corporate Governance Report.

Related Party Transactions: All transactions with related parties are placed before the Audit Committee ("the Committeeâ) for its approval. An omnibus approval from the Independent Directors of the Committee is obtained for the related party transactions which are repetitive in nature, based on the criteria specified and approved by the Board, based on recommendation of the Committee and transactions which are unforeseen for each financial year. The Committee and the Board reviews on a quarterly basis, all transactions entered into by your Company pursuant to the omnibus approvals so granted.

All transactions with Related Parties entered into during FY 2022, were in ordinary course of business and at arm''s length basis and in accordance with the provisions of the Act and the Rules made thereunder, the Listing Regulations and your Company''s Policy on Related Party Transactions.

Particulars of loans, guarantees or investments: The

details of the loans, guarantees or investments covered under Section 186 of the Act, forms part of the Notes to the Standalone Financial Statements provided in this Annual Report.

â¢ Deposits covered under Sections 73 and 74 of the Act read with Companies (Acceptance of Deposits) Rules, 2014.

â¢ Issue of equity shares with differential rights as to dividend, voting or otherwise.

â¢ No significant or material orders were passed by the Regulators or Courts or Tribunals, impacting the going concern status of your Company and its operations in future.

â¢ There was no revision in the financial statements.

â¢ Maintenance of cost records in terms of Section 148 of the Act is not applicable to your Company.

â¢ Material changes and commitments affecting the financial position of your Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report, unless otherwise stated in the report.

13. PREVENTION OF SEXUAL HARASSMENT (POSH)

Your Company continues to follow all the statutory requirements and guidelines in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder. The POSH Committee established as per the statutory requirements, continues to operate in every unit and the registered office. In case of any instances, employees are advised to approach the local POSH Committee and appropriate action in this regard is initiated post- detailed review of the matter. Your Company stands strong against any kind of sexual harassment and has zero tolerance for sexual harassment at workplace.

Every associate at the time ofjoining undergoes an extensive training on POSH through an e-learning module that covers the definition, guidelines and detailed coverage of policy on POSH. It also covers the rights and responsibilities of the employees under the POSH guidelines and Company''s policy. POSH policy is uploaded on the internal intranet site. POSH helpline details are placed on the notice boards at all locations, for employees & other staff, to be aware about the provisions of the POSH policy.

Your Company maintains a repository of all inquiries and documents as per the statutory guidelines and Company''s POSH policy. The Internal Complaints Committee members of the POSH Committee have been trained to update them with the best practices in this area, including for circumstances of POSH arising in a virtual environment. There were 13 POSH cases received during the financial year and they were resolved as per the guidelines of POSH Act and Rules made thereunder.

14. RISK MANAGEMENT

Your Company has established a robust risk management system to identify, assess the key risks and mitigate them appropriately. Further such system ensures smooth and efficient operations of the business. Your Company has adopted a Risk Management Policy, pursuant to Section 134 of the Act. The Policy is available on the company website at https://corporate.shoppersstop.com/wp-content/uploads/sp-client-document-manager/1/79a6c57-96cb.pdf. Your Company has in the light of the COVID-19 pandemic outbreak, reviewed the major risks including risks on account of business continuity, supply chain management, third party risks, legal compliance and other risks which may affect or has affected its operations, employees, customers, vendors and all other stakeholders from both the external and the internal environment perspective. Basis this review, appropriate actions have been initiated to mitigate, partially mitigate, transfer or accept the risk (if need be) and monitor such risks on a regular basis.

Details of various risks faced by your Company are provided in the Management Discussion & Analysis Report.

15. INTERNAL FINANCIAL CONTROL

completeness of accounting records and timely preparation and reporting of reliable financial statements/information, safeguarding of assets, prevention and detection of frauds and errors.

16. WHISTLE BLOWER / VIGIL MECHANISM

Your Company has established a Vigil Mechanism/ Whistle Blower policy in line with the Regulations 18 and 22 of the Listing Regulations and Section 177 of the Act. Your Company has engaged a third party for managing the "Ethics Hotlineâ, which can be used by employees including brand staff, vendors and third-party vendor personnel. The Whistle Blower Policy is available on the website of the Company and can we accessed at https:// corporate.shoppersstop.com/wp-content/uploads/sp-client-document-manager/1/bbb842f-9582.pdf.

Under this Policy, the Whistle Blower can raise concerns relating to reportable matters such as unethical behavior, actual or suspected fraud or violation of your Company''s code of conduct or ethics policy or any other malpractice, impropriety or wrongdoings, illegality, of regulatory requirements. The reach of this hotline facility is also expanded further for placing complaints against sexual harassment, Insider Trading & other specific HR related matters. The mechanism adopted by your Company encourages to report genuine concerns or grievances and provides for adequate safeguards against victimization of the Whistle Blower, who avail of such mechanism and also provide for direct access to the Chairman of the Audit Committee in appropriate or exceptional cases. We affirm that no employee of your Company was denied access to the Audit Committee. The guidelines are designed to ensure that stakeholders may raise any concern on integrity, value adherence without fear of being punished for raising that concern. This third party managed ''Ethics Hotline'' provide independence and comfort to the designated personnel to blow the whistle in case they have any issues worth reporting.

17. CORPORATE GOVERNANCE REPORT

18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, on the business operations / performance review, as stipulated under the Listing Regulations, forms part of this Annual Report.

19. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business Responsibility and Sustainability Report for the year under review, as stipulated under the Listing Regulations, describing the initiatives taken by your Company from social and governance perspective, forms an integral part of this Annual Report. Your Company has proactively voluntary initiated the Business Responsibility and Sustainability Report for the year under review.

20. AUDITORS & AUDITORS'' REPORT Statutory Auditors

M/s. S R B C & CO LLP were appointed as the statutory auditors at the Annual General Meeting held on July 28, 2017, for a term of 5 years, to hold office until the conclusion of the 25th Annual General Meeting (AGM).

The Audit Committee and the Board at their meeting held on April 28, 2022 approved the re-appointment of M/s. S R B C & CO LLP, (Registration No. 324982E/E300003), Chartered Accountants as the statutory auditors for a second term of five (5) years i.e. from conclusion of the 25th AGM till the conclusion of 30th AGM. The necessary resolution(s) seeking your approval for their appointment as statutory auditors is included in the notice of the 25th AGM along with other necessary disclosures required under the Act and the Regulations.

The Auditors Report given by S R B C & CO LLP, Statutory Auditors, on the financial statements of the Company for the year ended March 31, 2022 forms part of the Annual Report. The Auditor''s Report does not contain any qualification, reservation or adverse remark. However, the statutory auditor has drawn attention i.e. an Emphasis of Matter with regard to Note No. 30(ii) of the Standalone Ind AS Financial Statements [Note No. 29(ii) of the Consolidated Ind AS Financial Statements] in their report, details of which are as follows:

Litigation

We draw attention to Note 30(ii) to the standalone Ind AS financial statements which, describes the uncertainty related to the outcome of the appeal filed before the Supreme Court regarding non provision of retrospective levy of service tax for the period from June 1, 2007 to March 31, 2010 on renting of immovable properties given for commercial use, aggregating to '' 16.60 crores.

Detailed explanation in respect of the matter has been provided under Note 30(ii) of standalone Ind AS financial statements Note No. 29(ii) of the Consolidated Ind AS Financial Statements.

During the year under review, the Auditor has not reported any fraud and therefore no detail are required to be disclosed under Section 134(3) (ca) of the Act.

Secretarial Auditors

The Secretarial Audit Report for FY2022 issued by M/s. Kaushal Dalal & Associates, Practicing Company Secretaries (FCS- 7141, CP-7512) the Secretarial Auditor for the year under review, is annexed as Annexure III to this report. The said report does not contain any qualification, reservation, adverse remark or disclaimer.

During the year under review, the above Auditors have not reported any fraud and therefore no details are required to be disclosed under Section 134(3) (ca) of the Act.

21. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The i nformation on conservation of energy and technology absorption, as stipulated under the Act read with the Rules made thereunder, is annexed as Annexure IV to this Report. The foreign exchange earnings were '' 33.69 crores (Previous Year '' 12.99 crores) and outgo was '' 8.41 crores (Previous Year '' 1.83 crores), for the year under review.

22. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules and the disclosures pertaining to ratio of remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the said Rules are annexed to this report.

Having regard to the provisions of the second proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company and others entitled thereto. The said information is available for inspection by the Members. The Members desiring inspection/ interested in obtaining copy thereof, may write at [email protected] to the Company Secretary. The Annual Report including the aforesaid information is made available on the Company''s corporate website.

23. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Act, the Directors of your Company, to the best of their knowledge and based on the information and explanations received from your Company, hereby confirm that:

a. In the preparation of the annual accounts for the year under review, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

b. The Directors have selected appropriate accounting policies and have applied them consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2022, and of the loss of the Company, for the year under review.

d. The annual accounts have been prepared on a going concern basis.

e. Proper internal financial controls to be followed by the Company were laid down and such internal financial controls were adequate and operating effectively.

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

24. SECRETARIAL STANDARDS

25. AWARDS AND ACCOLADES

During the year under review, your Company received many awards and felicitations conferred by reputable organizations, some of them are:

â¢ 2^nd Best Large Retail Company by Ambition Box

â¢ 14^th Best Large Company by Ambition Box

â¢ Indian Retail Champions Best Departmental Store Award- RAI.

26. ACKNOWLEDGEMENT

We place on record our sincere appreciation towards the contribution made by all Customer Care Associates at all levels.

For Shoppers Stop Limited

Place: Mumbai B S Nagesh

Date: April 28, 2022 Chairman

Mar 31, 2018

Dear Members,

The Directors present herewith 21st Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended March 31, 2018.

1. FINANCIAL PERFORMANCE

(Rs. in lacs)

Particulars	Year ended	Year ended
Particulars	March 31, 2018	March 31, 2017
RETAIL TURNOVER
Own merchandise - Gross of tax	387,316.73	367,500.86
Concessionaire/consignment merchandise - Gross of tax	26,259.14	32,595.04
Other Retail operating income	5,055.59	5,619.72
	418,631.46	405,715.62
Less: Value Added Tax	41,985.29	19,073.24
Less: Cost of concessionaire/consignment merchandise	17,497.26	21,838.13
	359,148.91	364,804.25
Other Income	1,602.03	2,956.98
Total Income	360,750.94	367,761.23
Profit before Depreciation & Tax	19,149.51	16,364.13
Less: Depreciation	11,192.54	11,552.61
Profit before Tax	7,956.97	4,811.52
Exceptional Items	5,040.96	4,780.00
Profit before Tax	2,916.01	31.52
Less: Provision for Tax	1,755.63	2,025.37
(Loss)/Profit for the year (A)	1,160.38	(1,993.85)
Other comprehensive (income)/loss (B)	(706.08)	26.24
Total comprehensive income/(loss) for the year (A) (B)	1,866.46	(1,967.61)

2. OVERVIEW OF COMPANYâS PERFORMANCE

During the year under review, your Company has opened 4 department stores i.e. one store each at New Delhi, Mumbai - Thane, Hyderabad and Chennai taking its chain of stores to 83 stores (including 6 airport stores) with 13 HomeStop stores under its operations. Under âBeauty formatâ, the Company added 4 Clinique, 4 Bobbi Brown and 2 Smash Box stores.

The Gross Retail Turnover of the Company is Rs. 418,631.46 lacs (previous year Rs. 405,715.62 lacs), registering a growth of 3.18% y-o-y basis. The retail turnover net of taxes and cost of concessionaire/ consignment merchandise stood at Rs. 359,148.91 lacs with a like-to-like growth at 2.10% p.a. EBITDA stood at Rs. 22,765.63 lacs, a growth of 2.50% with a Profit before exceptional items at Rs. 7,956.97 lacs a growth of 65.37% over the previous year.

The year under review, has been a hallmark year for the Company. With the aim to sharpen focus on core department store business and omni-channel strategy, the Company exited non-core businesses i.e. Hypercity, Timezone and Duty-free airport retail. The details of these disinvestment are provided in âSubsidiaries, Associates and Joint Ventureâ, section of this report. The Company raised Rs. 17,925.70 lacs by offering 5% of its share capital to Amazon.com NV Investment Holdings LLC, Foreign Portfolio Investor, on a private placement basis.

These measures have significantly changed the balance sheet of your Company and will deliver greater shareholder value. At the beginning of the year, the Company had a debt of Rs. 57,590.17 lacs at standalone level and Rs. 88,510.57 lacs at consolidated level which is reduced to Rs. 8737.89 lacs at standalone level and Rs. 12,534.88 lacs at consolidated level. In fact, net debt at standalone level is Rs. 6,734.34 lacs, as Rs. 2,003.55 lacs continues to be invested in Debt mutual funds -Liquid Growth Schemes. The Company has been successful to reduce the debt-equity ratio from 0.76 to 0.09 and expects to be debt free within a couple of quarters to come.

Further, analysis of operating performance is carried under Management Discussion and Analysis, which forms part of this Annual report.

Loyalty Programme continues to grow strong with more than 53 lacs members contributing to 75% of its sales.

Our intent to bring the romance back to retail through stronger assortment, experiences and customer service coupled with re-engineered strategy on Private Brands, will continue in the years to come.

3. DIVIDEND

In terms of Dividend Distribution policy, your Directors have recommended a Dividend of Rs. 0.75 (15%) per equity share of Rs. 5 each (previous year Rs. 0.75 (15%) per equity share of Rs. 5 each), subject to approval of the members at the ensuing Annual General Meeting. Together with the Dividend Distribution Tax, the total outflow on account of dividend will be appx. Rs. 795.34 lacs.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, specified companies are required to formulate a Dividend Distribution Policy. The Board has approved and adopted a Dividend Distribution Policy which is annexed as Annexure I and the same is available on the Companyâs website at the link https://corporate.shoppersstop.com/uploaded_ filesAI91b878-8de7.pdf.

4. RESERVES

There is no amount proposed to be transferred to General Reserves during the year under review.

5. CREDIT RATING

During the year under review, the following credit ratings were assigned to the Company:

1. India Ratings & Research Pvt. Ltd.:

- IND A1 for Commercial Paper Programme of Rs. 5,000 lacs.

- IND A1 for Short-Term Debt Programme/ Commercial Paper of Rs. 10,000 lacs.

2. Credit Analysis & Research Ltd.:

- CARE AA-; (Double A Minus; Outlook: Stable) for the long-term bank facilities amounting to Rs. 74,267 lacs and CARE A1 (A One plus) for the short-term bank facilities amounting to Rs. 2,150 lacs.

- CARE A1 ; (A One plus) for Commercial Paper Issue amounting to Rs. 10,000 lacs.

- CARE AA-; (Double A Minus; Outlook: Stable) for Non-Convertible Debenture issue amounting to Rs. 10,000 lacs.

3. CRISIL Limited:

- CRISIL A1 rating for Commercial Paper of Rs. 10,000 lacs.

6. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE

As on March 31, 2018, your Company has five subsidiary companies, details whereof are as under:

Crossword Bookstores Ltd. (Crossword):

Crossword, the wholly owned subsidiary, with its wide portfolio of books, toys, stationery and gifting. Crossword has chain strength of 87 stores across the country with a revenue of Rs. 10,666 lacs vis-a-vis (previous year Rs. 11,181 lacs).

Crossword posted a net loss of Rs. 503 lacs for the year under review, against a net loss of Rs. 422 lacs in the previous year.

The other four wholly owned subsidiaries of the Company viz. Upasna Trading Ltd.; Shopperâs Stop Services (India) Ltd.; Shoppersâ Stop.com (India) Ltd.; and Gateway Multichannel Retail (India) Ltd.; have no operations during the year under review.

During the year under review, the following companies ceased to be subsidiary, joint venture entity -associate Company:

Hypercity Retail (India) Ltd. (Hypercity): In terms of the Share Purchase Agreement executed with Future Retail Limited and approval accorded by the members through postal ballot on November 13, 2017, the Company disposed of 77,158,778 equity shares of Rs. 10/- each constituting 51.09% of the share capital of Hypercity; its material subsidiary to Future Retail Limited on November 30, 2017. Accordingly, Hypercity ceases to be subsidiary of the Company.

In turn, the Company was allotted 4,756,823 equity shares of Rs. 2/- each at an issue price of Rs. 537/- per equity share by Future Retail Limited and received cash consideration in terms of the aforesaid Share Purchase Agreement. These equity shares are locked in upto December 28, 2018.

An amount of Rs. 4,886.75 lacs is provided towards loss on sale of investment during the year under review.

Nuance Group (India) Pvt. Ltd. (NGIPL): The Nuance Group AG, Switzerland and the Company, had formed a Joint Venture called NGIPL, to operate the duty free stores at international airports in India. During the year under review, the Company has disposed off its 40% shareholding in NGIPL to The Nuance Group AG, Switzerland, at a consideration of Rs. 600 lacs on October 6, 2017. With the disposal of this shareholding, the Shareholders Agreement executed with them, stands terminated and accordingly, NGIPL ceases to be an associate company. The Company has accounted an impairment of Rs. 3,561 lacs in preceding years and impairment reversal of Rs. 20 lacs for year under review.

Further, the Company also disposed of 500 equity shares of Rs. 10 each of Nuance Group Fashion & Luxury Duty Free Pvt. Ltd.; at its face value.

Timezone Entertainment Pvt. Ltd. (TEPL): TEPL is engaged in the business of operating Family Entertainment Centres (FEC) under the âTimezoneâ brand. During the year under review, the Company has disposed of its 48.42% shareholding in TEPL to Timezone West Asia Pte. Ltd., at a consideration of Rs. 2,270 lacs on February 15, 2018. With the disposal of this shareholding, the joint venture agreement executed in this regard, stands terminated and accordingly, TEPL ceases to be an associate company of the Company. An amount of Rs. 174.21 lacs is recognised as impairment loss during the year under review.

Except for the above, no Company has become or ceased to be subsidiary, joint venture entity or associate company.

In accordance with the provisions contained in Section 136 of the Companies Act, 2013, the Annual Report of the Company, containing therein its Standalone and the Consolidated Financial Statements are available on the Companyâs website www.shoppersstop.com. Further, the Financial Statements of each of the aforesaid subsidiary companies are available on the Companyâs website and shall also be available for inspection during business hours at the Registered Office of the Company. Any member who is interested in obtaining a copy of the Financial Statements may write to the Company Secretary at the Registered Office of the Company.

7. CONSOLIDATED FINANCIAL STATEMENTS

I n accordance with the provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (Listing Regulations) the Consolidated Financial Statements forms part of this Annual Report and shall also be laid before the ensuing Annual General Meeting of the Company. The Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards (IND AS) under Section 133 of the Companies Act, 2013.

A Report on the performance and financial position of these subsidiaries included in the Consolidated Financial Statement and their contribution to the overall performance of the Company, is provided in Form AOC-1 and forms part of this Annual Report.

8. EMPLOYEES STOCK OPTION SCHEME

The Nomination, Remuneration & Corporate Governance Committee of the Company, inter-alia, administers and monitors the Employee Stock Option Scheme. During the year under review, the Company has allotted 60,020 equity shares of Rs. 5/- each on exercise of vested options by certain employees of the Company and its subsidiaries.

During the year under review, the Company has not granted any Employee Stock Options.

I n terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, the details of the Stock Options granted under the ESOP Scheme is annexed herewith as Annexure II. Further, certificate from S R B C & CO LLP, Statutory Auditors of the Company, with respect to implementation of Employee Stock Option Scheme, would be placed at the ensuing Annual General Meeting for inspection by the Members and a copy will also be available for inspection at the Registered Office of the Company.

9. PREFERENTIAL ALLOTMENT OF EQUITY SHARES

The Company has allotted 43,95,925 equity shares of Rs. 5/- each at a price of Rs. 407.78/- per equity share, aggregating to Rs. 17,925.70 lacs to Amazon.com NV Investment Holdings LLC, Foreign Portfolio Investor, on private placement basis on January 12, 2018. Pursuant to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended, these equity shares are locked-in upto January 19, 2019.

10. HUMAN RESOURCES

The Company continues to build organisational capability by empowering its employees across all levels. High Potentials Associates were identified through a very transparent assessment mechanism and they underwent a robust Programme with various bespoke initiatives and live projects to make them future ready. To build a service oriented workforce, highly customised training sessions like hosting skills, cashiering excellence, Personal Shopper@ home, are being conducted thus giving the customers a delightful experience and help customer transformation through fashion, in line with the Companyâs vision statement. The Company strongly stands against sexual harassment cases and thrusts a lot on various training initiatives pertaining to Prevention of Sexual Harassment (PoSH). Maximising reach and minimising efforts and time is now being made possible through infusion of technology in training initiatives because of which number of training hours have seen a positive traction. The Company has also managed to establish its image as a Retail tech organisation by participating in National level Coding contest. It also focusses on the overall development of the Customer Care Associates (CCAs) and accordingly human resource initiatives are being implemented. As on date of the Balance Sheet, the Company had a total of 7,480 CCAs.

11. CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company as part of CSR initiatives has undertaken projects/ Programmes in accordance with CSR Policy. The CSR Policy may be accessed on the Companyâs website at the link: https://corporate.shoppersstop. com/uploaded_files/6a821c5-ec98.pdf. The report on CSR is annexed herewith as Annexure III.

The Corporate Social Responsibility Committee comprises of three Directors i.e. Ms. Ameera Shah, as the Chairperson, Mr. Ravi Raheja and Mr. Rajiv Suri as the members.

12. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

Non-Independent Directors

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Neel C. Raheja (DIN: 00029010) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Board of Directors recommends his re-appointment and the matter is being placed for the approval of members at the ensuing Annual General Meeting of the Company.

Mr. Chandru L. Raheja (DIN: 00027979), Non-Executive Promoter Chairman of the Company resigned as a Director and Chairman of the Company with effect from June 8, 2018, on account of his age, seniority and increasing personal engagements, after having served as Chairman for more than two decades. Your directors would like to place on record their sincere gratitude for the enormous contribution made by Mr. Raheja as the Chairman of the Company since its inception. The Company and the Board benefitted immensely from Mr. Rahejaâs vast experience, knowledge and insights.

The Board of Directors in appreciation of Mr. B. S. Nageshâs (DIN: 00027595) farsighted vision, wisdom and guidance, which have been invaluable to the Companyâs growth, has elevated him from his present position of Vice Chairman to the Chairman of the Board of Directors and the Company with effect from June 8, 2018. As the members are aware, prior to his role as Non-Executive Vice Chairman of the Company effective August 18, 2009, Mr. Nagesh was a Managing Director of the Company. During his then administrative & managerial position with a successful association of more than 12 years, he had played a key role in the phenomenal growth and success of the Company. Your directors would like to place on record their sincere appreciation towards the contribution made by Mr. B. S. Nagesh and welcomes him as the Chairman of the Company.

Mr. Govind Shrikhande, Managing Director of the Company, resigned as Managing Director effective from close of business hours of June 30, 2018. He has stepped down to pursue other interest, his personal commitments and other engagements. The Board of Directors place on record their deep appreciation for the contributions made by Mr. Shrikhande during his association of more than 17 years, during which, the Company has grown from 7 stores in the year 2001 to 97 stores (including 13 HomeStop stores) till date.

During the year under review, Mr. Rajiv Suri (DIN: 08124971) was appointed as Chief Executive Officer, one of the Key Managerial Personnel of the Company, under Section 203 of the Companies Act, 201 3 & Rules thereunder, effective January 9, 2018. Further, the Board of Directors at its meeting held on June 8, 2018, on the recommendation of the Nomination, Remuneration & Corporate Governance Committee, appointed Mr. Rajiv Suri as an Additional Director and Managing Director, designated as âManaging Director & Chief Executive Officerâ of the Company for a period of 3 (three) years commencing from June 8, 2018, subject to the approval of the members of the Company and other regulatory approvals, as may be applicable. The Board of Directors recommends his appointment and the matter is being placed for the approval of members at the ensuing Annual General Meeting of the Company.

Independent Directors

Mr. Gareth Thomas (DIN: 07010320) Independent Director of the Company stepped down from the said position with effect from October 26, 2017, on account of his personal engagements and new commitments. Ms. Abanti Sankaranarayanan (DIN: 01788443), has tendered her resignation as Independent Director of the Company, with effect from June 8, 2018, due to commitments at her work place. The Board places on record its appreciation for contribution made by both of them during their tenure as Independent Directors of the Company.

The Board of Directors at its meeting held on June 8, 2018, on the recommendation of the Nomination, Remuneration & Corporate Governance Committee, appointed Ms. Ameera Shah (DIN: 00208095) as an Additional Director to hold office as Independent Director of the Company for a term of 5 (five) years commencing from June 8, 2018 to June 7, 2023, subject to approval of members of the Company. The Company has received declaration from Ms. Ameera Shah confirming that she meets with the criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board of Directors recommends her appointment and the matter is being placed for the approval of members at the ensuing Annual General Meeting of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Key Managerial Personnel

During the year under review, Mr. Salil Nair, Chief Executive Officer of the Company and Mr. Sanjay Chakravarti, Chief Financial Officer of the Company had resigned from the services of the Company with effect from May 31, 2017 and December 22, 2017, respectively. The Board of Directors places on record the contribution made by both of them, during their long association with the Company.

The Board of Directors, effective June 8, 2018, has appointed Mr. Karunakaran Mohanasundaram as Chief Financial Officer (CFO), one of the Key Managerial Personnel of the Company, under Section 203 of the Companies Act, 2013 & Rules thereunder. Consequently, Mr. Vijay Jain stepped down from the position of âInterim Chief Financial Officerâ w.e.f. June 8, 2018 and accordingly ceased to be one of the Key Managerial Personnel of the Company. Mr. Vijay Jain, was appointed by the Board of Directors as Interim Chief Financial Officer, designated as Deputy Chief Financial Officer of the Company and one of the Key Managerial Personnel of the Company, effective April 27, 2018, till the time the Company identifies and appoints a suitable candidate for the post of CFO.

13. ANNUAL EVALUATION OF DIRECTORS, COMMITTEES AND BOARD

In compliance with the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation of the Board, its specified Committees and individual directors was carried out during the year under review. More details on the same are provided in Corporate Governance Report. The Directors expressed their satisfaction with the evaluation process.

14. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Familiarisation Programme for Independent Directors which also extends to other Non-Executive Directors, aims to familiarise them with the Company, nature of the retail industry, business model, processes & policies, etc., and also seeks to update them on the roles, responsibilities, rights and duties under the Companies Act, 2013 and other statutes. More details on the same are provided in Corporate Governance Report.

The details of the programme has been posted on the Companyâs website at web link: https://corporate. shoppersstop.com/Investors/Training.aspx

15. REMUNERATION POLICY

The Board of Directors on the recommendation of the Nomination, Remuneration & Corporate Governance Committee has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The said policy is annexed herewith as Annexure IV.

16. DISCLOSURES UNDER THE COMPANIES ACT, 2013

Extract of Annual Return: The details forming part of extract of the annual return in Form MGT 9 is annexed herewith as Annexure V.

Meetings of the Board of Directors: The Board of Directors met 7 (seven) times in the year under review. The details about the board meetings and the attendance of the directors are provided in Corporate Governance Report.

Change in Share Capital: During the year under review, the Company allotted 60,020 equity shares of Rs. 5/each on exercise of vested Employee Stock Options under the ESOP Scheme. Further, the Company on January 12, 2018, has allotted 4,395,925 equity shares of Rs. 5/- each to Amazon.com NV Investment Holdings LLC, Foreign Portfolio Investor, on private placement basis. These equity shares ranks pari passu in all respect. Consequent to the above allotments of equity shares, the paid-up share capital stands increased to Rs. 439,803,445 divided into 87,960,689 equity shares of Rs. 5/- each.

Audit Committee: The Audit Committee comprises of four Non-Executive Directors i.e. Mr. Deepak Ghaisas, as the Chairman, Mr. Ravi C. Raheja,

Prof. Nitin Sanghavi, and Mr. Manish Chokhani as the members. The Board of Directors has accepted all the recommendations made by Audit Committee from time to time.

Related Party Transactions: Your Company has formulated a policy on Related Party Transactions including policy for determining material subsidiaries and on materiality of related party transactions which are available on the Companyâs website and is accessible at the link: https://corporate.shoppersstop. com/uploaded_files/70ad1c1-7375.pdf. As on date, there is no material subsidiary of the Company.

All contracts, arrangements/transactions entered into during the year under review by the Company with Related Parties were in ordinary course of business and on an armâs length basis.

During the year under review, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 along with the justification for entering into such contract or arrangement in Form AOC-2 does not form part of the report. However, the Directors draw attention of the members to note no. 38 of the Standalone Financial Statement which sets out related party disclosures.

Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature with Related Parties. A statement of all such related party transactions is presented before the Audit Committee on a quarterly basis for its review, specifying the nature and value of these transactions.

Particulars of loans, guarantees or investments: The details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are provided in note nos. 4, 5 and 29 (II) b of the Standalone Financial Statement respectively.

Other Disclosures: The Board of Directors state that no disclosure and/or reporting and/or details is required in respect of the following items as there were no transactions on these items during the year under review:

- Deposits covered under Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

- Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOP referred to in this report.

- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- Managing Director of the Company has not received any remuneration or commission from any of the Companyâs subsidiaries.

- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations in future.

- There was no revision in the financial statements.

- There was no change in the nature of the business.

The Company has adopted a policy for prevention of sexual harassment at work place, which inter-alia, provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. During the year under review, there were 9 complaints received and the same have been disposed of. The Company has an Internal Complaints Committee (ICC) which is responsible for redressal of these complaints and follows the guidelines as stipulated in the policy. There are training being conducted for sensitising all the CCAs on PoSH.

17. RISK MANAGEMENT

Your Company has established a robust Risk Management system to identify & assess the key risks and ensure smooth and efficient operations of the business. The Company has reviewed the major risks which affects it, from both the external and the internal environment perspective and appropriate actions have been initiated to mitigate, partially mitigate, transfer or accept the risk (if need be) and monitor the risks on a regular basis.

18. INTERNAL FINANCIAL CONTROL

The Company has laid down internal financial controlâs, through a combination of entity level controls, process level controls and IT general controls, inter-alia, to ensure orderly and efficient conduct of business, including adherence to the Companyâs policies and procedures, accuracy and completeness of accounting records and timely preparation and reporting of reliable financial statements/information, safeguarding of assets, prevention and detection of frauds and errors.

The evaluation of these internal financial controls were done through the internal audit process, established within the Company and also through appointing professional firm to carry out such tests by way of systematic internal audit programme. Based on the review of the reported evaluations, the directors confirm that, for the preparation of financial Statement for the year ended March 31, 2018, the applicable Accounting Standards have been followed and the internal financial controls related to financial Statement are generally found to be adequate and were operating effectively and that no material weaknesses were noticed.

19. WHISTLE BLOWER / VIGIL MECHANISM

The Company has established a Vigil Mechanism and adopted a whistle blower policy for its directors and employees, to report concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs code of conduct or ethics policy. The mechanism provides adequate safeguards against victimisation of persons who use this mechanism. The brief details about this mechanism has also been posted on the website of the Company.

20. CORPORATE GOVERNANCE

The Company has complied with the requirements of corporate governance as stipulated under the Listing Regulations and accordingly, the Report on Corporate Governance forms part of this Annual Report. The requisite certificate from S R B C & CO LLP, the Statutory Auditors of the Company, regarding the compliance with the conditions of Corporate Governance as stipulated in Regulation 34 of Listing Regulations, is annexed to this Annual Report.

21. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis for the year under review, as stipulated in terms of Regulation 34 of the Listing Regulations, is presented in a separate section forming part of this Annual Report.

22. BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report for the year under review, as stipulated in terms of Regulation 34 of the Listing Regulations is presented in a separate section forming part of this Annual Report.

23. CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING

The Board of Directors has adopted the Code of Internal Procedures and Conduct for regulating, monitoring and reporting trading by designated persons in accordance with the SEBI (Prohibition of Insider Trading) Regulations, 2015. The said code lays down guidelines and procedures to be followed, and disclosures to be made while dealing with the securities of the Company. The Code of fair disclosure of unpublished price sensitive information is available on website and is accessible at the link http://corporate.shoppersstop.com/uploaded_ files/3cd8391-7d65.pdf

24. AUDITORS Statutory Auditors

S R B C & CO LLP, (Registration No. 324982E/E300003) Chartered Accountants were appointed as Statutory Auditors of the Company by the Members at the 20th Annual General Meeting (AGM) held on July 28, 2017, to hold office from the conclusion of the 20th AGM until the conclusion of the 25th AGM of the Company in accordance with provisions of the Companies Act, 2013 and will continue to be Statutory Auditors of the Company till their term expires.

The Auditorsâ Report to the members for the year under review does not contain any qualification, reservation, adverse remark or disclaimer. The Auditors has not reported any matter to the Company required to be disclosed under Section 143(12) of the Companies Act, 2013.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, the Company had appointed Kaushal Dalal & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company for the year under review. The Secretarial Audit Report issued by them, is annexed herewith as Annexure VI. The said report does not contain any qualification, reservation, adverse remark or disclaimer.

25. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated is annexed herewith as Annexure VII. The foreign exchange earnings was Rs. 7,978.85 lacs and outgo was Rs. 1,528.42 lacs.

26. TRANSFER OF EQUITY SHARES TO IEPF

During the year under review, 734 Equity shares of 11 Shareholders of the Company, have been transferred/ credited to the Demat account of Investor Education and Protection Fund Authority (IEPF Authority) in accordance with Section 124(6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, whose dividend has not been encashed on such shares, since last seven consecutive years. The details thereof are available under âInvestor Sectionâ on the Website of the Company viz. www.shoppersstop.com. Any person whose shares and/or unclaimed dividend has been transferred to the IEPF Authority may claim the shares and/or apply for refund in respect of unclaimed dividend, as the case may be, under the provisions of the Companies Act, 2013 and rules made thereunder.

27. DEMAT SUSPENSE ACCOUNT FOR UNCLAIMED SHARES

As on date, there are 13 shareholders, holding 700 equity shares of Rs. 5/- each (post sub-division) allotted in Initial Public Offering of 2005, lying in the escrow account due to non-availability of their correct particulars. Despite various reminders to them by Karvy Computershare Private Limited, Registrar and Share Transfer Agent of the Company, no response has been received. As a result, the said unclaimed shares have been credited to âShoppers Stop Ltd. -Unclaimed Shares Demat Suspense Accountâ. Such shareholders may approach the Company with their correct particulars and proof of their identity for crediting requisite shares from Demat Suspense Account to their individual Demat Account. During the year under review, no shares were transferred from the suspense account to any of the aforesaid shareholders.

28. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this report.

Further, the disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report.

Having regard to the provisions of the second proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during business hours on working days upto the date of ensuing Annual General Meeting. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The Annual Report including the aforesaid information is also available on the Companyâs website.

29. DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134 of the Companies Act, 2013, it is hereby confirmed that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) appropriate accounting policies have been selected and applied them consistently and judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2018 and of the profit of the Company for the year under review;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis;

e) the proper internal financial controls has been laid down and that the internal financial controls were adequate and were operating effectively; and

f) the systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating effectively.

30. SECRETARIAL STANDARDS

During the year under review, the Company has complied with Secretarial Standards on meetings of the Board of Directors and on General Meetings issued by the Institute of Company Secretaries of India in terms of Section 118(10) of the Companies Act, 2013.

31. AWARDS AND ACCOLADES

During the year under review, your Company received many awards and felicitations conferred by reputable organisations, some of them are:

a) Times Ascent - Dream Company to work for in Retail & were also ranked 17th amongst âTimes Ascent Dream Companies to work forâ across all industries and sectors in India.

b) âGreat Place to Workâ & also recognised as one of the Top 10 Best Workplaces in Retail by Great Place to WorkÂ® Institute - 2018.

c) Economic Times - Excellence in Supply Chain & Logistics Award.

d) ELSC Industry Excellence in Supply Chain - Retail.

e) BT-CSR Excellence award for Energy Conservation from Bureaucracy Today.

f) Winner in the following categories at âKamikaze Customer Loyalty Awards - 2018â

- Best Loyalty Programme in Retail Sector: Large/Multi - Brand Format

- Best Customer Experience in Retail Sector: Large/Multi - Brand Format

- Best Use of Innovation in Loyalty Marketing.

- Best Use of Customer and Data Analytics in Loyalty Programme

- Best Use of Direct Marketing in a Loyalty Programme

32. MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments which could affect the Companyâs financial position which have occurred between March 31, 2018 and the date of this Report.

33. ACKNOWLEDGEMENT

Your Directors would like to place on record its sincere appreciation for the support and contribution made by customers, business partners, suppliers, shareholders and all Customer Care Associates across the Country as well as various government departments, banks and financial institutions for the conduct of operations of the Company.

For and on behalf of the Board of Directors

B. S. Nagesh

June 8, 2018 Chairman

Mar 31, 2017

Dear Members,

The Directors present herewith 20th Annual Report on the business and operations of the Company together with the Audited Statements of Accounts for the year ended March 31, 2017.

1. FINANCIAL PERFORMANCE

(Rs, in lacs)

Particulars	Year ended March 31, 2017	Year ended March 31, 2016
Retail Turnover
Own merchandise - Gross of tax	367,500.86	335,179.31
Concessionaire/ consignment merchandise- Gross of tax	32,595.04	36,365.80
Other Retail operating income	5,619.72	6,356.67
	405,715.62	377,901.78
Less: Value Added Tax	19,073.24	17,968.53
Less: Cost of concessionaire/ consignment merchandise	21,838.13	24,453.12
	364,804.25	335,480.13
Other Income	2,956.98	3,023.83
Total Income	367,761.23	338,503.96
Profit before Depreciation & Tax	16,364.13	17,772.41
Less: Depreciation	11,552.61	9,766.40
Profit before Tax	4,811.52	8,006.01
Exceptional Items	4,780.00	2,381.00
Profit before tax	31.52	5,625.01
Less: Provision for Tax	2,025.37	3,337.01
(Loss)/Profit for the year (A)	(1,993.85)	2,288.00
Other comprehensive income / (loss) (B)	26.24	(56.30)
Total comprehensive income / (loss) for the year (A) (B)	(1967.61)	2231.70

2. PERFORMANCE REVIEW

As on the date of the report, your Company has opened 7 departmental stores i.e. one store each at Goa, Noida, Mumbai - Panvel, Pune, Bengaluru, New Delhi and Ranchi taking its chain of stores to 80 stores (including 6 airport stores) spread across India. Further, the Company also has 16 HomeStop stores.

The revenue of the Company is Rs, 405,715.62 lacs (previous year Rs, 377,901.78 lacs), registering a growth of 7.36 % y-o-y basis. The net loss was Rs, 1,993.85 lacs (previous year profit Rs, 2,288 lacs) and hence no amount is proposed to be carried to reserves.

3. DIVIDEND

Even though the Company has incurred a loss during the year under review, your Directors have recommended a dividend of Rs, 0.75 per equity share of Rs, 5 each (previous year Rs, 0.75 per equity share of Rs, 5 each) from its reserves. The payment of dividend is subject to approval of the shareholders at the ensuing Annual General Meeting.

Dividend Distribution Policy: As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the top 500 listed companies shall formulate a dividend distribution policy. Accordingly, the policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders. The Policy may be accessed on the Company s website at the link https://corporate.shoppersstop.com/ uploaded files/191b878-8de7.pdf The policy is also annexed herewith as Annexure I.

4. FINANCE

The Company continues to focus on judicial management of its working capital with various initiatives for bringing down the cost of borrowings. The Company has availed short term secured & unsecured working capital loans & long term secured loans from banks. The costs of these facilities is constantly been reduced through judicial, planned & proactive fund management along with continuous monitoring and negotiations with lenders to garner the benefits accruing from money market changes. Other cost effective financing techniques such as commercial paper, working capital demand loans, vendor bill discounting facility, etc. are also being used to bring down the cost of funds. During the year, the Company has availed Rs, 5,000 lacs long term loans & Rs, 5,000 lacs Short Term Working Capital Loan at competitive rates. It has repaid Rs, 12,247 lacs long term loans on maturity through cash profit proceeds. During the year, the Company has received back net Rs, 5,081 lacs Inter-corporate Deposit from its subsidiary Company Hypercity Retail (India) Ltd. Consequently, during the year, the Company has been able to reduce its Loans from Rs, 58,983 lacs at the beginning of the year to Rs, 57,590 lacs at the end of the financial year.

5. CREDIT RATING

During the year, the following credit ratings were assigned to the Company:

1. India Ratings & Research Private Limited (A

Fitch Group Company):

- IND A1 for Commercial Paper Programme of Rs, 5,000 lacs.

- IND A1 for Short Term Debt Programme/ Commercial Paper of Rs, 10,000 lacs.

2. Credit Analysis & Research Limited has assigned the following credit ratings:

- CARE A; Negative (Single A; Outlook: Negative) for the long-term bank facilities amounting to Rs, 74,267 lacs and CARE A1 (A One) for the short-term bank facilities amounting to Rs, 2,150 lacs.

- CARE A1 (A One) for Commercial Paper Issue/ Short Term Debt Issue amounting to Rs, 10,000 lacs.

- CARE A; Negative (Single A; Outlook: Negative) for Non-Convertible Debenture issue amounting to Rs, 10,000 lacs.

3. CRISIL Limited has assigned CRISIL A1 rating for Commercial Paper of Rs, 10,000 lacs.

6. HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARY & JOINT VENTURE COMPANIES

As on March 31, 2017, your Company has six subsidiary Companies and two joint venture Companies, details whereof are as under:

Hypercity: Hypercity Retail (India) Ltd; the subsidiary Company achieved the total revenue (net of taxes) of Rs, 1,10,702.64 lacs (previous year Rs, 91,306.41 lacs), registering a growth of 21.24% y-o-y basis. Hypercity has posted loss of Rs, 8,399.22 lacs (previous year net loss of Rs, 8,714.40 lacs). It is the Company''s policy and practice to constantly monitor its investments. In keeping with accounting prudence and conservativeness, the Company has made a provision of Rs, 3,600 lacs in the financial year 2016-17, towards diminution in value of investment in Hypercity.

Crossword: Crossword Bookstores Ltd; the wholly owned subsidiary has chain strength of 88 stores across the Country. The revenue of the Company in year under review was Rs, 10,920 lacs vis a vis (previous year Rs, 9,823 lacs). Crossword has posted net loss of Rs, 422 lacs for the year under review, against a net loss of Rs, 320 lacs in the previous year.

Timezone: Timezone Entertainment Private Ltd; is engaged in the business of operating Family Entertainment Centers (FEC) under the "Timezone" brand. There are 25 FECs which are set up and operated at leading shopping malls by Timezone. The revenue during the year under review was Rs, 5,931 lacs (previous year Rs, 5,907 lacs), registering a growth of 0.40 % y-o-y basis. Timezone has incurred a loss of Rs, 580 lacs against previous year''s loss of Rs, 168 lacs.

Nuance Group: The Nuance Group AG and Shoppers Stop Ltd, have formed a Joint Venture called Nuance Group (India) Pvt. Ltd (Nuance), to operate the Duty Free stores at International Airports in India. During the year under review, sales growth on Like to Like basis was 19%, mainly resulting from growth in passengers vs last year and increase in range in Perfumery, Fashion & Food category. It has incurred loss after tax of Rs, 683 lacs against the previous year''s profit of Rs, 687 lacs. The Company has made a provision of Rs, 1,180 lacs, towards diminution in value of investment in Nuance.

The other subsidiaries of the Company viz; Upasna Trading Ltd; Shopper''s Stop Services (India) Ltd.; Shoppers'' Stop.com (India) Ltd.; and Gateway Multichannel Retail (India) Ltd.; have no operations during the year under review.

During the year under review, no company has become or ceased to be a subsidiaries, joint venture entity or associate company.

In accordance with the provisions contained in Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein its Standalone and the Consolidated Financial Statements are available on the Company''s website www.shoppersstop.com.

Further, pursuant to the said requirement, the Financial Statements of each of the aforesaid subsidiary Companies are available on the Company''s website and shall be available for inspection during business hours at the Registered Office of the Company. Any member who is interested in obtaining a copy of the Financial Statements may write to the Company Secretary at the Registered Office of the Company.

7. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Consolidated Financial Statements forms part of this Annual Report and shall also be laid before the ensuing Annual General Meeting of the Company. The Consolidated Financial Statements have been prepared in accordance with the Indian Accounting Standards (IND AS) notified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. The Consolidated Financial Statements for the financial year ended March 31, 2017 are the Company''s first IND-AS compliant annual Consolidated Financial Statements with comparative figures for the year ended March 31, 2016 also under IND-AS. The date of said transition is April 1, 2015.

The statement containing the salient features of a Company''s subsidiaries and joint venture companies under Section 129 of the Companies Act, 2013, in the prescribed form is attached to the Financial Statements.

8. EMPLOYEES STOCK OPTION PLAN

During the year under review, the Company has not granted any Employee Stock Options. The Nomination and Remuneration & Corporate Governance Committee of the Company, inter-alia, administers and monitors the Employee Stock Option Scheme in accordance with the SEBI Guidelines.

During the year under review, the Company has allotted 42,798 equity shares of '' 5/- each on exercise of vested options by certain employees of the Company and its subsidiary Companies.

In terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, the details of the Stock Options granted under the ESOP Scheme is annexed herewith as Annexure II.

A certificate from Deloitte Haskins & Sells LLP, Statutory Auditors of the Company, with respect to implementation of Employee Stock Option Scheme, would be placed at the ensuing Annual General Meeting for inspection by the Members and a copy will also be available for inspection at the Registered Office of the Company.

9. HUMAN RESOURCES

The Company believes strongly in the employees (Customer Care Associates - CCAs) being the true Brand ambassadors and hence continues to re affirm and percolate the Values & Vision of the Company. The Company continues to maintain transparency in communication & strengthen the trust in CCAs. Direct interactions with the Managing Director through forums like town halls are being carried out to do so. Maximizing reach and minimizing efforts and time is now being made possible through infusion of technology in training initiatives. Highly customized training sessions are being conducted to give the customers a delightful experience and help customer transformation through fashion, in line with the Company''s Vision statement. Company also focuses on the overall development of the CCAs and not just Professional one and accordingly HR initiatives are being implemented. Through a very transparent assessment mechanism carried out last year, High

Potentials Associates have been identified and a robust program has been designed to develop & nurture them. As on date of the Balance Sheet, the Company had a total of 7,236 CCAs.

10. CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, a Corporate Social Responsibility Committee has been constituted by the Board of Directors of the Company. The Committee comprises Ms. Abanti Sankaranarayanan, as a Chairperson and Mr. Ravi C. Raheja, Mr. Gareth Thomas and Mr. Govind Shrikhande as members.

The CSR Policy may be accessed on the Company''s website at the link: https://corporate.shoppersstop. com/uploaded files/6a821c5-ec98.pdf The report on CSR is annexed herewith as Annexure III.

11. DIRECTORS & KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Ravi C. Raheja (DIN 00028044) Non-Executive & Non-Independent Director of the Company, will retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment at the said meeting. The Board recommends his reappointment. His brief profile is provided in the Notice convening the ensuing 20th Annual General Meeting of the Company.

During the year under review, Mr. Prashant Mehta retired as the Company Secretary of the Company w.e.f. July 31, 2016. The Board has appointed Mr. Bharat Sanghavi as a Company Secretary of the Company w.e.f. August 1, 2016.

Mr. Salil Nair, Chief Executive Officer of the Company tendered his resignation from the services of the Company effective May 31, 2017. The Board of Directors places on record the contribution made by Mr. Salil Nair, during his long association with the Company.

12. PERFORMANCE EVALUATION

13. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Familiarization Programme for Independent Directors which also extends to other Non Executive Directors, aims to familiarize them with the Company, nature of the retail industry, business model, processes & policies, etc., and also seeks to update them on the roles, responsibilities, rights and duties under the Companies Act, 2013 and other statutes. More details on the same are provided in Corporate Governance Report.

The details of the programme has been posted on the Company''s website at web link: https://corporate. shoppersstop.com/Investors/Training.aspx

14. REMUNERATION POLICY

The Board of Directors on the recommendation of the Nomination and Remuneration & Corporate Governance Committee has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The said policy is annexed herewith as Annexure IV.

15. CHANGE IN REGISTERED OFFICE

The Company has shifted its Registered Office to Umang Tower, 5th Floor, Mindspace, Off. Link Road, Malad (West), Mumbai - 400 064 with effect from April 17, 2017.

16. DISCLOSURES UNDER THE COMPANIES ACT, 2013

Extract of Annual Return: The details forming part of extract of the annual return in Form MGT 9 is annexed herewith as Annexure V.

Meetings of the Board of Directors: The Board of Directors met 4 (four) times in the year under review. The details about the board meetings and the attendance of the directors are provided in Corporate Governance Report.

Change in Share Capital: During the year under review, the Company allotted 42,798 equity shares of '' 5/- each on exercise of vested stock options by certain employees under the ESOP Scheme. These equity shares forming part of the share capital, ranks pari passu in all respect.

Audit Committee: The Audit Committee comprises of four Non-Executive Directors i.e. Mr. Deepak Ghaisas, as the Chairman, Mr. Ravi C. Raheja, Prof. Nitin Sanghavi, and Mr. Manish Chokhani as the members. The Board of Directors has accepted all the recommendations made by Audit Committee from time to time.

Related Party Transactions: Your Company has formulated a policy on Related Party Transactions including policy for determining material subsidiaries and on materiality of related party transactions which is available on the Company''s website and is accessible at the link: https://corporate.shoppersstop.com/uploaded_ files/70ad1c1-7375.pdf

All related party transactions that were entered into during the financial year were on arm''s length basis and were in ordinary course of business of the Company.

During the year under review, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 along with the justification for entering into such contract or arrangement in Form AOC-2 does not form part of the report. However, the Directors draw attention of the members to note no. 38 of the Standalone Financial Statement which sets out related party disclosures.

Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all such related party transactions is presented before the Audit Committee and the Board on a quarterly basis, specifying the nature and value of these transactions.

Particulars of loans, guarantees or investments:

The details of loans, guarantees and investments covered under the provisions of Section 186 of the

Companies Act, 2013 are provided in notes no. 5, 29(ii) and 4 of the Standalone Financial Statement.

Other Disclosures : The Board of Directors state that no disclosure and / or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

- Details relating to deposits covered under Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

- Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOP referred to in this report.

- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- Managing Director of the Company has not received any remuneration or commission from any of the Company''s subsidiaries.

- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

- There was no revision in the financial statements.

- There was no change in the nature of the business.

The Company has adopted a policy for prevention of sexual harassment at work place and is fully committed to comply with its various provisions. The policy inter-alia provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. During the year under review, there were 8 complaints received and the same has been disposed off.

17. RISK MANAGEMENT

The Company has framed a Risk Management Policy to identify and assess the key risk areas, monitor and report the compliance and effectiveness of the same. A Risk Management Committee has been constituted to oversee the risk management process in the Company. The Committee has reviewed the major risks which affect the Company from both the external and the internal environment perspective and appropriate actions have been initiated to mitigate, partially mitigate, transfer or accept the risk (if need be) and monitor the risks on a regular basis. Based on the detailed review the following key risks inter-alia has been identified:

Internet Usage: India''s Internet user base is currently third largest in the world. This, coupled with the rising consumer confidence in online retail, is driving the growth of e-commerce in the country. With a significant number of Indian consumers turning Internet users, and eventually, online shoppers, selling through the online channel is set to redefine retail. The Company in order to counter the impact of loss in business due to online e-commerce sales, has designed a two pronged strategy which includes, Omni-channel approach to drive sales with the emphasis on seamless and engaging customer experience and plans to sell products and brands online via tie up with leading online e-commerce portals.

Development of new technologies: E-commerce Platforms being adopted by Brands themselves or by B2C & B2B Applications; as well as the obsolescence of older technologies could have a significant impact on the performance of the Company. The Company will be making focused and substantial investments to embrace new technologies and infrastructure for the Omni channel, which is a combination of physical store and online site.

Vendor production capacity / supply reaching full capacity bottlenecks: The Company''s expansion plans combined with renewed vigour on the e-commerce retail segment & possible new entrants in the brick & mortar segment of retail, these factors may trigger a constraint in terms of vendors reaching their production/supply capacity. The Company is looking at establishing new sources within and outside India, to mitigate the problem.

Economic Slowdown: Economic slowdowns have a direct impact on consumption. Retail being the end service provider of consumption in the supply/Value chain, is bound to face difficulties in an environment of economic slowdown. The Company continuously looks at stepping up the marketing activities and strong cost control to protect its profitability.

18. INTERNAL FINANCIAL CONTROL

The Company has laid down internal financial control''s, through a combination of Entity level controls, Process level controls and IT General controls inter-alia to ensure orderly and efficient conduct of business, including adherence to the Company''s policies and procedures, accuracy and completeness of accounting records and timely preparation and reporting of reliable financial statements/information, safeguarding of assets, prevention and detection of frauds and errors.

The evaluation of these internal financial controls were done through the internal audit process, established within the Company and also through appointing professional firm to carry out such tests by way of systematic internal audit programme. Based on the review of the reported evaluations, the directors confirm that, for the preparation of financial accounts for the year ended March 31, 2017, the applicable Accounting Standards have been followed and the internal financial controls are generally found to be adequate and were operating effectively and that no material weaknesses were noticed.

19. WHISTLE BLOWER / VIGIL MECHANISM

The Company has established a Vigil Mechanism and adopted a whistle blower policy for its directors and employees, to report concerns about unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy. The mechanism provides adequate safeguards against victimization of persons who use this mechanism. The brief detail about this mechanism has also been posted on the website of the Company.

20. CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements as prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on corporate governance and the certificate from the Statutory Auditors of the Company, confirming the compliance is annexed and forms part of this Annual Report.

The specified information about the elements of remuneration such as salary, benefits, bonuses, stock options, pension, etc., of all the directors, details of fixed component and performance linked incentives along with the performance criteria; service contracts, notice period, severance fees; stock option details are provided in said Corporate Governance Report.

21. MANAGEMENT''S DISCUSSION AND ANALYSIS

Management''s Discussion and Analysis for the year under review, as stipulated in terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report.

22. BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report for the year under review, as stipulated in terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report.

23. CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING

The Board of Directors has adopted the Code of Internal Procedures and Conduct for regulating, monitoring and reporting trading by designated persons in accordance with the SEBI (Prohibition of Insider Trading) Regulations, 2015. The said code lays down guidelines and procedures to be followed, and disclosures to be made while dealing with the securities of the Company. The Code of fair disclosure of unpublished price sensitive information is available on website and is accessible at the link: https://corporate.shoppersstop.com/ uploaded files/3cd8391-7d65.pdf

24. AUDITORS

Statutory Auditors

As per the provisions of Section 139 of Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, your Company''s Statutory Auditors, Deloitte Haskins & Sells LLP (Registration no. 117366W/W-100018), Chartered Accountants, Mumbai, hold office till the conclusion of ensuing Annual General Meeting of the Company.

The Audit Committee and Board of Directors recommend appointment of SRBC & Co LLP, (Registration No. 324982E/E300003), Chartered Accountants, as the Statutory Auditors of the Company to hold office for a period of 5 years commencing from conclusion of ensuing Annual General Meeting till the conclusion of 25th Annual General Meeting of the Company, subject to ratification of their appointment by the members at every Annual General Meeting.

Accordingly, a resolution proposing appointment of SRBC & Co LLP, Chartered Accountants as the Statutory Auditors of the Company for a period of 5 consecutive years commencing from conclusion of 20th Annual General Meeting of the Company, forms part of the Notice convening this Annual General Meeting of the Company.

SRBC & Co LLP have confirmed their eligibility and are not disqualified for appointment under the Companies Act, 2013 and the Chartered Accountants Act, 1949 or the Rules and Regulations made there under.

The Auditors'' Report to the members for the year under review does not contain any qualification, reservation, adverse remark or disclaimer. The Auditor has not reported any matter to the Company required to be disclosed under Section 143(12) of the Companies Act, 2013.

The Board places on record its appreciation for the contribution of Deloitte Haskins & Sells LLP, Chartered Accountants, during their tenure as the Statutory Auditors of your Company.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed Mr. V. Sundaram, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report issued by him, is annexed herewith as Annexure VI. The said report does not contain any qualification, reservation, adverse remark or disclaimer.

25. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed herewith as Annexure VII. The foreign exchange earnings was Rs, 8,995.13 lacs and outgo was Rs, 2,338.36 lacs.

26. DEMAT SUSPENSE ACCOUNT UNCLAIMED SHARES

As on date there are 13 shareholders, holding 700 equity shares of Rs, 5/- each (post sub-division) allotted in Initial Public Offering of 2005, lying in the escrow account due to non-availability of their correct particulars. Despite various reminders to them, by Karvy Computershare Private Limited, our Registrar and Share Transfer Agent, no response has been received. As a result, they said unclaimed shares have been credited to ''Shoppers Stop Ltd -Unclaimed Shares Demat Suspense Account''. Such shareholders may approach the Company with their correct particulars and proof of their identity for crediting requisite shares from Demat Suspense Account to their individual Demat Account. During the year under review, no shares were transferred from the suspense account to any of the aforesaid shareholders. Since dividend on these shares are also unclaimed from more than seven years, the Company will take appropriate steps in terms of provisions of IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended.

27. PARTICULARS OF EMPLOYEES

Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during business hours on working days up to the date of ensuing Annual General Meeting. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The Annual Report including the aforesaid information is also available on the Company''s website.

28. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134 of the Companies Act, 2013, the Board of Directors confirms that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. appropriate accounting policies have been selected and applied them consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2017 and of the loss of the company for that period;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts have been prepared on a going concern basis;

e. the proper internal financial controls has been laid down and that the internal financial controls were adequate and were operating effectively; and

f. the systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating effectively.

29. AWARDS AND ACCOLADES

During the year under review, your Company received many awards and felicitations conferred by reputable organizations, some of them are:

1. Excellence in Manufacturing Supply Chain -Retail at ELSC Leadership Awards.

2. The Images Most Admired Retailer of the Year

- Supply Chain Management & Fulfillment at Images Awards.

3. National Energy Conservation Awards 2016, from the Central Ministry of Power, Government of India, for the excellence & initiatives taken towards the energy conservation at stores.

4. Best Use of Social Media to Enhance Loyalty, Best Use of Data Analytics in Predictive Modeling and Best Direct Marketing campaign awards at Customer Loyalty Summit, 2017.

5. VM& SD International Award in the US for our work of the Denim Festival.

6. VM & RD - Best Display for End of Season Sale

- July 2016.

7. VM & RD - Best Window Display for Durga Puja

- 2015.

30. MATERIAL CHANGES

There are no material changes and commitments affecting the financial position of the Company occurred between March 31, 2017 and the date of this report of Board of Directors to you.

31. ACKNOWLEDGEMENT

Your Directors wish to express their appreciation to all customers, business partners, suppliers, banks and financial institutions for their continued support and co-operation extended by them.

Your Directors also place on record their sincere appreciation to all customer care associates of the Company.

The Directors look forward to the long term future with confidence.

For and on behalf of the Board of Directors

Chandru L. Raheja

May 5, 2017 Chairman

Mar 31, 2016

Dear Members,

The Directors present herewith 19th Annual Report on the business and operations of the Company together with the Audited Statements of Accounts for the year ended March 31, 2016.

1. Financial Performance

(Rs. in lacs)

Year ended Year ended Particulars 31-Mar 2016 31-Mar 2015

Retail Turnover

Own merchandise (including concession sales) - gross of tax 343,376.02 306,930.78

Consignment merchandise 28,323.88 30,088.43

Other Retail operating income 6,356.69 4,236.64

378,056.59 341,255.85

Less: Value Added Tax 17,968.53 16,095.48

Less: Cost of consignment merchandise 18,767.60 20,162.71

341,320.46 304,997.66

Other Income 2,130.37 1,765.49

343,450.83 306,763.15

Profit before Depreciation & Tax 18,122.91 15,536.96

Less: Depreciation 9,766.40 8,580.71

Profit before Tax 8,356.51 6,956.25

Exceptional Items 2,381.00 -

Profit before Tax 5,975.51 6,956.25

Less: Provision for Tax 3,457.89 2,882.72

Profit after Tax 2,517.62 4,073.53

Add: Balance brought forward from previous year 23,342.16 20,294.15

Amount available for appropriation 25,859.78 24,367.68

Less: Adjustment of depreciation charge Sch. II - 69.30

25,859.78 24,298.38

Appropriation

Interim Dividend paid including Dividend Distribution Tax 753.43 -

Proposed Dividend (incl. Dividend Distribution Tax) - 752.54

Transfer to General Reserve 75.02 203.68

Balance carried forward 25,031.33 23,342.16

2. Performance Review

During the year under review, your Company has opened 8 departmental stores i.e. one store each at Mangalore International Airport, Meerut, Kolhapur, Kolkata, Jaipur, New Delhi and two stores at Bengaluru taking its chain of stores to 77 stores (including five airport stores) spread across India. Further, the Company also has 18 HomeStop stores.

The revenue of the Company is Rs. 343,450.83 lacs (previous year Rs. 306,763.15 lacs), registering a growth of 11.96% y-o-y basis. The net profit achieved was Rs. 2,517.62 lacs (previous year Rs. 4,073.53 lacs).

3. Dividend

The Company has paid an Interim Dividend of 15% (i.e. Rs. 0.75 per equity share) of Rs. 5/- each (previous year Rs. 0.75 per equity share of Rs. 5/- each as the final dividend.)

The Company has declared 15% dividend, since the financial year 2005-06 (except in the financial year 2008-09, where no dividend was declared) and it is proposed to continue with the same percentage of dividend for the current year as well. Further, in order to conserve resources for expansion plans of the Company, the Directors do not recommend any further dividend and considered the said interim dividend as the final dividend.

During the year, the unclaimed dividend pertaining to the financial year 2007-08, was transferred to Investor Education & Protection Fund established by the Central Government in compliance with Section 205C of the Companies Act, 1956. Prior to transferring the aforesaid dividend, the Company has sent reminders to the concerned shareholders for submitting their claims for unclaimed dividend.

4. Finance

The Company continues to focus on judicial management of its working capital with various initiatives for bringing down the cost of borrowings. The costs of facilities such as commercial paper, working capital demand loans, vendor bill discounting facility, etc. were kept under check through its continuous monitoring. The Company has also taken long-term loans at very competitive interest rates.

5. Credit Rating

During the year, the following credit ratings were assigned to the Company:

1. India Ratings & Research Private Limited (A Fitch Group Company):

- IND A1 for Commercial Paper Programme of Rs. 500 million.

- IND A1 for Short-Term Debt Programme/Commercial Paper of Rs. 1000 million.

2. Credit Analysis & Research Limited has assigned the following credit ratings:

- CARE A (Single A) for the long-term bank facilities amounting to Rs. 682 crore and CARE A1 (A One) for the short-term bank facilities amounting to Rs. 21.50 crore.

- CAREA1 (A One) for Commercial Paper Issue/Short-Term Debt Issue amounting toRs. 100 crore.

- CARE A (Single A) for Non-Convertible Debenture issue amounting to Rs. 100 crore.

3. CRISIL Limited has assigned CRISIL A1 rating for Commercial Paper of Rs. 100 crore.

6. Subsidiary & Joint Venture Companies

Hypercity: Hypercity Retail (India) Ltd; the subsidiary Company achieved the total revenue (net of taxes) of Rs. 93,462.81 lacs (previous year Rs. 90,768.49 lacs), registering a growth of 3.0%, year on year basis. Hypercity has operated 14 stores for full year. Hypercity has posted net loss of Rs. (9,290.13 lacs) (previous year net profit of Rs. 1,347.7 lacs). The outstanding inter corporate deposits as on March 31, 2016 was Rs. 14,500 lacs (maximum outstanding during the year was Rs. 17,500 lacs).

During the year under review, the rights of 163,040,500 7% Cumulative Redeemable Preference Shares (CRPS), held in Hypercity by the Company were varied to make them Compulsorily Convertible Preference Shares (CCPS), with the conversion ratio of 5:1 i.e. 5CCPS of Rs. 10/-each were converted into 1 equity share of Rs. 10/-each. Accordingly, on March 15, 2016, the Company was allotted 32,608,100 equity shares of Rs. 10/- each.

Further the terms of 131,070,000 7% Compulsorily Convertible Preference Shares of Rs. 10/- each (CCPS) held in Hypercity by the Company, were varied and converted into equity shares on March 15, 2016 instead of August 31, 2017. The Company was allotted 26,214,000 equity shares of Rs. 10/- each.

Crossword: Crossword Bookstores Ltd.; the wholly owned subsidiary has launched & closed certain stores during the year under review, taking its chain strength to 90 stores across the Country. The revenue of the Company during the year under review was Rs. 9,848.24 lacs vis avis (previous year Rs. 9,038.66 lacs). Crossword has posted net loss of Rs. (295.19 lacs) for the year under review, against a net loss of Rs. (716.13 lacs) in the previous year. The outstanding inter corporate deposits as on March 31, 2016 was Rs. 766.26 lacs (maximum outstanding during the year was Rs. 766.26 lacs).

During the year under review, the rights of 1,00,00,000 6% Cumulative Redeemable Preference Shares (CRPS), held in Crossword, were varied to make them Compulsorily Convertible Preference Shares (CCPS), with the conversion ratio of 2.5:1 i.e. 2.5 CCPS of Rs. 10/- each were converted into 1 equity share of Rs. 10/- each. Accordingly, on March 15,2016, the Company was allotted 40,00,000 equity shares of Rs. 10/- each.

Timezone: Timezone Entertainment Private Ltd.; is engaged in the business of operating Family Entertainment Centers (FEC) under the "Timezone" brand. There are 26 FECs which are set up and operated at leading shopping malls by Timezone. The revenue during the year under review was Rs. 59.07 crores (Previous year Rs. 55.54 crores), registering a growth of 6% y-o-y basis. Timezone has incurred the loss of Rs. (1.85) crores against previous year''s profit of Rs. 1.23 crores.

Nuance Group: The Nuance Group AG and the Company have formed a Joint Venture called Nuance Group (India) Pvt. Ltd., to operate the Duty Free stores at International Airports in India. During the year under review, sales growth on Like to Like basis is 16%, mainly resulting from growth in passengers vs last year. It has delivered profit after tax of Rs. 7.2 crore. It is a part of the Company''s policy and practice to constantly monitor its investments. Pursuant to this policy, during the year under review, the Company made a provision for impairment to an extent of Rs. 23.81 crores, towards diminution in value of investment, in Nuance Group (India) Pvt. Ltd; a Joint Venture Company.

The other subsidiaries of the Company viz; Upasna Trading Ltd; Shopper''s Stop Services (India) Ltd.; Shopper''s Stop.Com (India) Ltd.; and Gateway Multichannel Retail (India) Ltd.; either have insignificant or no operations during the year under review.

During the year under review, no company has become or ceased to be a subsidiary, joint venture entity or associate company.

The financial statements along with the report of Directors and Auditors thereon of the above mentioned subsidiary companies are kept open for inspection by the members at the Registered Office of the Company. These statements are also available on the website of the Company www.shoppersstop.com.

7. Consolidated Financial Statements

The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India. These Statements, together with Auditors'' Report thereon forms part of the Annual Report.

The statement containing the salient features of a company''s subsidiaries and joint venture companies under Section 129 of the Companies Act, 2013, in the prescribed form is attached to the Financial Statements.

8. Employees Stock Option Plan

The Company has granted 3,275 Employee Stock Options at a grant price of Rs. 404/- per option under ES0P Scheme 2008 to an employee of the Subsidiary Company. The Nomination and Remuneration & Corporate Governance Committee of the Company, inter-alia, administers and monitors the Employees Stop Option Scheme in accordance with the SEBI Guidelines.

During the year under review, the Company has allotted 94,141 equity shares of Rs. 5/-each on exercise of vested options by certain employees of the Company and its subsidiary Companies under the ES0P Scheme 2008.

The particulars as required to be disclosed pursuant to the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and its disclosure requirements is annexed herewith as Annexure I. The same is also uploaded on the website of the Company at www.shoppersstop.com.

The Company has received a certificate from its Auditors, that the scheme has been implemented in accordance with SEBI Guidelines and resolution passed by the Shareholders of the Company. The said Certificate would be placed at the ensuing Annual General Meeting of the Company.

9. Human Resources

The Company continues to introspect and strengthen its core competencies by redefining its Values and Vision. People development continues to be a key focus area and to have a sustained learning environment, the employees are being coached and empowered to coach others. Reaffirming a strong belief in inclusion and equality and a zero tolerance on harassment, customised workshops and focused discussions are being conducted. To create a leadership pipeline across the system, assessments are being conducted to have fair and transparent performance evaluation. Taking new initiatives to further align its Human Resource policies to meet the growing needs of its business continues to be a constant endeavour. Special designed training modules for the frontline employees are being delivered from time to time to meet the training needs of the employees. Infusion of technology in the learning space is helping the Company to maximise knowledge percolation, enable speedy coverage of information and monitor & address learning requirements of the employees. As on date of the Balance Sheet, the Company had a total of 7,440 employees.

10. Corporate Social Responsibility

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, a Corporate Social Responsibility Committee has been constituted by the Board of Directors of the Company. The Committee comprises Ms. Abanti Sankaranarayanan, as a Chairperson and Mr. Ravi Raheja, Mr. Gareth Thomas and Mr. Govind Shrikhande as members.

The CSR Policy may be accessed on the Company''s website at the link: http://corporate.shoppersstop.com/uploaded_files/6a821 c5- ec98.pdf. The report on CSR is annexed herewith as Annexure II.

11. Directors & Key Managerial Personnel

In accordance with the provisions of the Section 152 of the Companies Act, 2013, Mr. B. S. Nagesh (DIN 00027595) Non-Executive & Non-independent Director of the Company, will retire by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The Board recommends his re-appointment. His brief profile is provided in the Notice convening the ensuing 19th Annual General Meeting of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (listing Regulations'').

Mr. Avnish Bajaj (DIN 00281547), resigned as a Director of the Company w.e.f. July 31, 2015 due to his personal commitments. The Board of Directors records its sincere appreciation and recognition of the valuable contribution and services rendered by him during his association with the Company.

There is no change in the Key Managerial Personnel of the Company during the year under review.

12. Performance Evaluation

In compliance with the Companies Act, 2013 & Listing Regulations, the performance evaluation of the Board, its specified Committees and individual directors was carried out during the year under review. More details on the same are provided in Corporate Governance Report.

13. Familiarisation Programme for Independent Directors

The familiarisation programme for Independent Directors which also extends to other Non-Executive Directors, aims to familiarise them with the Company, nature of the retail industry, business model, processes & policies, etc., and also seeks to update them on the roles, responsibilities, rights and duties under the Companies Act, 2013 and other statutes.

Presentations are regularly made to the Board of Directors, Audit Committee/Nomination and Remuneration & Corporate Governance Committee members on various related matters, where Directors interact with executive committee members of the Company. These Presentations inter-alia cover the Company''s strategy, business model, operations, markets, products, finance, risk management framework, financial performance, budget & control process and such other area as may arise from time to time.

The details of the said programme has been posted on the Company''s website at web link: http://corporate.shoppersstop.com/ Investors/Training.aspx.

14. Remuneration Policy

The Board of Directors has on the recommendation of the Nomination and Remuneration & Corporate Governance Committee has framed a policy for selection and appointment of Directors, senior management and their remuneration. The said policy is annexed herewith as Annexure III.

15. Disclosures Under the Companies Act, 2013

Extract of Annual Return: The details forming part of extract of the annual return in Form MGT-9 is annexed herewith as Annexure IV

Meetings of the Board of Directors: The Board of Directors met 4 (four) times in the year under review. The details about the board meetings and the attendance of the directors are provided in Corporate Governance Report.

Change in Share Capital: During the year under review, the Company has allotted 94,141 equity shares of Rs. 5/- each on exercise of vested options by certain employees under the ESOP Scheme.

Audit Committee: The Audit Committee comprises four Non-Executive Directors i.e. Mr. Deepak Ghaisas, as the Chairman, Mr. Ravi C. Raheja, Prof. Nitin Sanghavi and Mr. Manish Chokhani as the members. The Board of Directors has accepted the recommendations made by Audit Committee from time to time.

Related Party Transactions: All related party transactions that were entered into during the financial year were on arm''s length basis and were in ordinary course of business of the Company. During the year, the Company had not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The Related Party Transactions Policy, including policy for determining material subsidiaries and on materiality of related party transactions, as approved by the Board of Directors is uploaded on the Company''s website and is accessible at the web link: http:// corporate.shoppersstop.com/uploaded_files/70ad1 d -7375.pdf.

Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm''s length basis, the disclosure under form AOC-2 is not applicable. However, the Directors draw attention of the members to Notes to the stand alone financial statement which sets out related party disclosures.

All the related party transactions are presented to the Audit Committee and the Board of Directors. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all such related party transactions is presented before the Audit Committee and Board on a quarterly basis, specifying the nature and value of these transactions. Particulars of Loans, Guarantees or investments: The details of Loans, Guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 forms part of the Notes to the Financial Statements.

Other Disclosures: The Board of Directors state that no disclosure and / or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

- Details relating to deposits covered under Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

- Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOP referred to in this report.

- Issue of equity shares with differential rights as to dividend, voting or otherwise.

- Managing Director of the Company has not received any remuneration or commission from any of the Company''s subsidiaries.

- No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

The Company has adopted a policy for prevention of sexual harassment at work place and is fully committed to comply with its various provisions. The policy inter-alia provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. During the year under review, there were fourteen complaints received pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The same has been disposed of completely.

16. Material Related Party Transactions

Pursuant to the provisions of the Securities and Exchange Board of India ("SEBI") Circular No. CIR/CFD/POLICY CELL/2/2014 dated April 17, 2014 read with Circular No. CIR/CFD/POLICY CELL/7/2014, dated September 15, 2014, under clause 49 of the Listing Agreement, the Company had obtained an approval, in respect of the material related party transactions with Hypercity Retail (India) Ltd; the subsidiary Company, from the members at its 18th Annual General Meeting.

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as 10DR'') was notified on September 2, 2015 wherein, pursuant to Regulation 23 (8), all existing material related party contracts and arrangements as on the date of the notification of LODR and which may continue beyond such date shall be placed for approval of members in the first General Meeting subsequent to the said notification.

The Company had entered into the various transactions with Hypercity Retail (India) Ltd; a subsidiary, and are continuing beyond September 2, 2015, the date of notification of LODR. The details in respect of these transactions are provided in the explanatory statement to the Notice convening the ensuing 19th Annual General Meeting of the Company. Accordingly, these material related party contracts or arrangements is placed before the members for their approval at the ensuing Annual General Meeting of the Company.

17. Risk Management

In line with the regulatory requirements, the Company has formally framed a Risk Management Policy to identify and assess the key risk areas, monitor and report the compliance and effectiveness of the same. A Risk Management Committee has been constituted to oversee the risk management process in the Company. The committee has reviewed the major risks which affect the Company from both the external and the internal environment perspective. Appropriate actions have been initiated to mitigate, partially mitigate, transfer or accept the risk (if need be) and monitor the risks on a regular basis. Based on the detailed review the following key risks inter-alia has been identified:

Internet Usage: India''s Internet user base is currently third largest in the world. This, coupled with the rising consumer confidence in online retail, is driving the growth of e-commerce in the country. With a significant number of Indian consumers turning Internet users, and eventually, online shoppers, selling through the online channel is set to redefine retail. The Company in order to counter the impact of loss in business due to online e-commerce sales, has designed a two pronged strategy which includes, Omni-channel approach to driving sales with the emphasis on seamless and engaging customer experience and plans to sell products and brands online via tie up with leading online e-commerce portals.

Development of new technologies: E-commerce Platforms being adopted by Brands themselves or by B2C & B2B Applications; as well as the obsolescence of older technologies could have a significant impact on the performance of the Company. The Company will be making focused and substantial investments to embrace new technologies and infrastructure for the Omni channel, which is a combination of physical store and online site.

Vendor production capacity/supply reaching full capacity bottlenecks: The Company''s expansion plans combined with renewed vigour on the e-commerce retail segment & possible new entrants in the brick & mortar segment of retail, these factors may trigger a constraint in terms of vendors reaching their production/supply capacity. The Company is looking at establishing new sources within and outside India, to mitigate the problem.

Economic Slowdown: Economic slowdowns have a direct impact on consumption. Retail being the end service provider of consumption in the supply/Value chain, is bound to face difficulties in an environment of economic slowdown. The Company continuously looks at stepping up the marketing activities and strong cost control to protect its profitability.

18. Internal Financial Control

The Company has laid down internal financial control''s, through a combination of Entity level controls, Process level controls and IT General controls inter-alia to ensure orderly and efficient conduct of business, including adherence to the Company''s policies and procedures, accuracy and completeness of accounting records and timely preparation and reporting of reliable financial statements/ information, safeguarding of assets, prevention and detection of frauds and errors.

The evaluation of these internal financial controls was done through the internal audit process, established within the Company and also through appointing professional firm to carry out such tests byway of systematic internal audit programme. Based on the review of the reported evaluations, the directors confirm that, for the preparation of financial accounts for the year ended March 31, 2016, the applicable Accounting Standards have been followed and the internal financial controls are generally found to be adequate and were operating effectively and that no material weaknesses were noticed.

19. Whistle Blower/Vigil Mechanism

The Company has established a Vigil Mechanism and adopted a whistle blower policy for its directors and employees, to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy. The mechanism provides adequate safeguards against victimisation of persons who use this mechanism. The brief detail about this mechanism has also been posted on the website of the Company.

20. Corporate Governance

The Company has complied with the corporate governance requirements as prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on corporate governance and the certificate from the Statutory Auditors of the Company, confirming the compliance is annexed and forms part of the Annual Report.

The specified information about the elements of remuneration such as salary, benefits, bonuses, stock options, pension, etc., of all the directors, details of fixed component and performance linked incentives along with the performance criteria; service contracts, notice period, severance fees; stock option details are provided in said Corporate Governance Report.

21. Management''s Discussion and Analysis

Management''s Discussion and Analysis for the year under review, as stipulated in terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report.

22. Code of conduct for the prevention of Insider Trading

The Board of Directors has adopted the Code of Internal Procedures and Conduct for regulating, monitoring and reporting trading by designated persons in accordance with the SEBI (Prohibition of Insider Trading) Regulations, 2015. The said code lays down guidelines and procedures to be followed, and disclosures to be made while dealing with the securities of the Company. The Code of fair disclosure of unpublished price sensitive information is available on our website http://corporate.shoppersstop.com/uploaded_ files/3cd8391-7d65.pdf

23. Listing Agreement

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was notified on September 2, 2015, with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective from December 1, 2015. Accordingly, all listed entities were required to enter into the Listing Agreement within six months from the effective date. The Company has entered into Listing Agreement with BSE Ltd. and the National Stock Exchange of India Ltd.

24. Auditors

Statutory Auditors

Deloitte Haskins & Sells LLP (Registration no. 117366W/W-100018), Chartered Accountants, Mumbai, who are the Statutory Auditors of the Company, hold office till the conclusion of Twentieth Annual General Meeting of the Company, subject to ratification of their appointment at this Annual General Meeting, pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules framed thereunder.

They have confirmed their eligibility and are not disqualified for appointment under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. They have confirmed that they have been subjected to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board of ICAI.

The Audit Committee and the Board of Directors recommend the ratification of appointment of Deloitte Haskins & Sells LLP as the Statutory Auditors of the Company. The members are requested to ratify appointment of Deloitte Haskins & Sells LLR Chartered Accountants, as Statutory Auditors of the Company and to authorise the Board to fix their remuneration.

The Auditors'' Report to the members for the year under review does not contain any qualification, reservation, adverse remark or disclaimer. The Auditor has not reported any fraud to the Company required to be disclosed under Section 143(12) of the Act.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, the Company has appointed V. Sundaram & Co., a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report issued by them, is annexed herewith as Annexure V The said report does not contain any qualification, reservation, adverse remark or disclaimer.

25. Energy Conservation, Technology Absorption and Foreign Exchange

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure VI. The foreign exchange earnings was Rs. 8,078.52 lacs and outgo was Rs. 3,950.74 lacs.

26. Demat Suspense Account Unclaimed Shares

As on date there are 13 members, holding 700 equity shares of Rs. 5/- each (post sub-division) allotted in Initial Public Offering of 2005, lying in the escrow account due to non-availability of their correct particulars. Despite various reminders to them, by Karvy Computershare Private Limited, our Registrar and Share Transfer Agent, no response has been received. As a result, the said unclaimed shares have been credited to ''Shoppers Stop Ltd - Unclaimed Shares Demat Suspense Account''. Such members may approach the Company with their correct particulars and proof of their identity for crediting requisite shares from Demat Suspense Account to their individual Demat Account. During the year under review, no shares were transferred from the suspense account to any of the aforesaid members. The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

27. Particulars of Employees

In terms of the provisions of Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this report.

Further, the disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during business hours on working days upto the date of ensuing Annual General Meeting. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The Annual Report including the aforesaid information is also available on the Company''s website.

28. Directors'' Responsibility Statement

Pursuant to the requirements of Section 134 of the Companies Act, 2013, the Board of Directors confirms that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) appropriate accounting policies have been selected and applied them consistently and judgements and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2016 and of the profit of the Company for the year ended on March 31, 2016;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the annual accounts have been prepared on a going concern basis;

e) the proper internal financial controls has been laid down and that the internal financial controls were adequate and were operating effectively;

f) the systems to ensure compliance with the provisions of all applicable laws are in place and were adequate and operating effectively.

29. Awards and Recognition

During the year under review, your Company received many awards and felicitations conferred by reputable organisations.

Some of them are:

1. "Economic Times - Excellence In Supply Chain & Logistics Award" established by Economic Times.

2. "QUALITY EXCELLENCE AWARD - Supply Chain Sustainability" for the Company''s Supply Chain team at the World Quality Congress.

3. Most Admired Enterprise Solution Implementation and; Most Admired Retailer of the year - Department Store 2015 at Images Retail Forum, 2015.

4. "Best Supply chain company in Retail vertical" at ''Express Logistics and Supply Chain'' Forum conducted by Kamikaze B2B Media.

5. "The Most Respected Company in Retail" by Business World Magazine for the fifth year in a row.

30. Material Changes

There are no material changes and commitments affecting the financial position of the Company occurred between March 31, 2016 and the date of this report of Board of Directors to you.

31. Acknowledgement

Your Directors wish to express their appreciation to all customers, business partners, suppliers, banks and financial institutions for their continued support and co-operation extended by them.

Your Directors also place on record their sincere appreciation to all associates of the Company for their unstinted commitment towards the growth of the Company.

The Directors acknowledges the confidence and faith reposed by Shareholders in the Company and look forward to their continued support in future as well.

For and on behalf of the Board of Directors

Chandru L. Raheja

May 3, 2016 Chairman

Mar 31, 2014

Dear Members,

The Directors present herewith 17th Annual Report on the business and operations of the Company together with the Audited Statements of Accounts for the year ended March 31, 2014.

Financial Performance

(Rs. in lacs)

Year ended Year ended Particulars March 31, 2014 March 31, 2013

Retail Turnover

Own merchandise (including concession sales) 274,109.89 227,048.25

Consignment merchandise 27,590.06 26,111.84

Other Retail operating income 3,290.47 2,809.26

304,990.42 255,969.35

Less: Value Added Tax 14,581.77 12,240.40

Less: Cost of consignment merchandise 19,051.33 18,306.59

271,357.32 225,422.36

Other Income 1,338.88 1,721.47

272,696.20 227,143.83

Profit before Depreciation & Tax 12,448.43 11,100.34

Less: Depreciation 6,177.89 5,074.71

Profit before Tax 6,270.54 6,025.63

Less: Provision for Tax 2,570.07 2,108.78

Profit after Tax 3,700.47 3,916.85

Add: Balance brought forward from previous year 17,508.89 14,516.00

Amount available for appropriation 21,209.36 18,432.85

Appropriation

Proposed Dividend (incl. Dividend Distribution Tax) 730.19 728.12

Transfer to General Reserve 185.02 195.84

Balance carried forward 20,294.15 17,508.89

Performance Review

Your Company has opened 14 departmental stores i.e., one store each at Chandigarh, Kalyan, Surat, Thane, Agra, Vadodara, Raipur, Hyderabad, Chennai, Ghaziabad, Kolkata and Airports at Delhi, Jaipur and Raipur taking its chain of stores to 68 stores (including five airport stores) spread across India. Further, the Company has also opened 5 HomeStop stores at Chandigarh, Jaipur, Hyderabad and two at Bengaluru taking its tally to 18 stores.

The revenue of the Company is Rs. 272,696.20 lacs (previous year Rs. 227,143.83 lacs), registering a growth of 20.05% y-o-y basis. The net Profit achieved was Rs. 3,700.47 lacs (previous year Rs. 3,916.85 lacs).

Dividend

Your Directors are pleased to recommend a dividend of Rs. 0.75 per equity share of Rs. 5 each. (Previous year Rs. 0.75 per equity share of Rs. 5 each). The payment of dividend is subject to approval of the members in the ensuing Annual General Meeting.

Awards and Recognition

As in the past years, awards and recognitions were conferred on your Company by leading organisations during the year under review: Some of them are:

* World HRD Congress has conferred the Company with following awards:

1. Excellence in Training & Development Award for Best Custom Built Content.

2. Excellence in Training & Development Award for Best Training Partnership with External Vendors.

* India''s Most Respected Retail Company and Top 50 Most Respected Companies of India by BWI Business world Magazine.

* Best Supply Chain Company in Retail vertical, Award at 7th Express, Logistics & Supply Chain Leadership Awards 2013.

* Best Anchor Store award, for Inorbit Mall, Vashi store.

* GIA Award by International Home Ware Association (IHA), Chicago for Homestop.

* A certificate for best practice of "Innovative Eco Friendly Practices in Retail - Qualifier Top 20 Best Practices" at 5th Business Excellence Global Conference and 8th International Benchmarking Conference, Singapore.

* Runner Up BestPrax Prize for the project Innovative Eco Friendly Practices at 25th Qimpro Convention.

* The Sliver Award for Viva City Store design at the Designomics Awards.

* VM&RD Awards has conferred the Company with following awards:

1. Best Department Store - Thane Viviana Mall

2. Merit award - Best Visual Merchandising across India

3. Merit award - Best Window Display across India

* Best Loyalty Program Award at the Loyalty Summit 2014.

* Third position in great places to work in Retail Industry by Great Place to Work Institute and Retailers Association of India.

* Coaching Organisation of the Year and Best Organisational Leadership Development Programme at Learning & Development WHRD Awards 2014.

* Best Green Energy Efficiency Initiative Award at Global Green Leadership Awards, 2014, by World CSR Congress.

* 3rd Asia Manufacturing Supply Chain Summit has conferred the Company with following awards:

1. Manufacturing/Supply Chain Leadership and Strategy Award for ASN initiative with Madura Garments.

2. Best Supply Chain Initiative of the Year Award for GS1 Initiative.

* Best Green Energy Efficiency Initiative Award at Global Green Leadership Awards - 2014 conducted by World CSR Congress.

* Most Trusted Retailer - Popular choice award and Best Customer Loyalty Initiative of the Year award at the ET Retail Awards ceremony.

Credit Rating

During the year, the following credit ratings were assigned to the Company:

1. India Ratings & Research Private Limited (A Fitch Group Company):

* IND A1 for Commercial Paper Programme of Rs. 500 million.

* IND A1 for Short Term Debt Programme of Rs. 500 million.

2. Credit Analysis & Research Limited has assigned the following credit ratings:

* CARE A to the long term facilities of Rs. 547 crore and CARE A1 to the short term facilities of Rs. 31.50 crore.

* CARE A1 for Commercial Paper issue/ Short Term Debt (Series I) issue aggregating to Rs. 100 crore.

* CARE A1 for Commercial Paper issue/ Short Term Debt (Series II) issue aggregating to Rs. 40 crore.

* CARE A for Non Convertible Debentures issue amounting to Rs. 100 crore.

3. CRISIL Limited has assigned CRISIL A1 rating for Commercial Paper programme of Rs. 50 crore.

Finance

Your Company continues with various initiatives for bringing down the cost of borrowings which includes application of short-term instruments like commercial paper, working capital demand loans within working capital borrowing, vendor bill discounting facility, long term loans for expansion at competitive terms, so as to have funds at competitive cost.

Employees Stock Option Plan

The grant of stock options to employees is a mechanism to align the interest of employees with those of the Company, to provide them with an opportunity to share the growth of the Company and also to foster the long-term commitment. Your Company has formulated and designed Employees Stock Option Plan Scheme for its and its subsidiary''s employees and options were granted in accordance with Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended. The Nomination and Remuneration Committee of the Company administer and monitor the same.

During the year under review, the Company has granted 200,000 Employee Stock Options at a grant price of Rs. 344/- per option to the specified employees of the Company and its subsidiary Companies.

During the year under review, the Company has allotted 236,243 equity shares of Rs. 5/- each on exercise of vested options by certain employees under the said ESOP Schemes.

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.

The Company has received a certificate from its Statutory Auditors, that the scheme has been implemented in accordance with SEBI Guidelines and resolution passed by the Shareholders of the Company. The said Certificate would be placed at the Annual General Meeting of the Company.

Subsidiary Companies and Consolidated Financial Statements

In accordance with the Accounting Standard AS-21, the consolidated financial statements form part of this Annual Report. These consolidated financial statements provide financial information about your Company and its subsidiaries as a single entity.

Ministry of Corporate Affairs, Government of India vide General Circular No : 2/2011 dated February 8, 2011, has granted general exemption under Section 212 of the Companies Act, 1956, to the holding companies, from attaching the specified documents of its subsidiary companies, as referred in Section 212(1) of the said Act, with its Balance Sheet, on fulfillment of certain conditions. The Company has fulfilled these specified conditions and accordingly, the said documents of subsidiary companies are not attached to the financial statements of the Company. A summary of the financial performance of the subsidiary companies is given in this Annual Report. The annual accounts of the subsidiary companies and the related detailed information are made available to shareholders of the company and subsidiary companies seeking such information. The Annual Accounts of subsidiary companies are also open for inspection by any member at the registered office of the company and of the subsidiary companies.

Human Resources

The Company continued to create a productive, learning and caring environment by implementing robust and comprehensive HR processes and taking new initiatives to further align its Human Resource policies to meet the growing needs of its business. People development continues to be a key focus area in the Company. Special designed training modules for the frontline employees are being delivered from time to time to meet the training needs of the employees. Human relations remained cordial throughout the year. During the year, your Company organised various training programmes.

As on date of the Balance Sheet, the Company had a total of 6,821 Customer Care Associates.

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.

Auditors

Your Company''s Statutory Auditors, Deloitte Haskins & Sells LLP Chartered Accountants, Mumbai, will retire at the conclusion of the ensuing Annual General Meeting. Deloitte Haskins & Sells LLP have sought re-appointment and have confirmed that they are eligible for re-appointment, if made, as a Statutory Auditors of the Company.

The Audit Committee and the Board of Directors recommend the re-appointment of Deloitte Haskins & Sells LLP as the Statutory Auditors of the Company.

Directors

Mr. Ravi Raheja and Mr. Neel Raheja the promoters of the Company, have thus far been the permanent & non-executive promoter directors of the Company. Your directors have, however, now re-designated them as retiring directors whose office shall be liable to determination by retirement by rotation in accordance with the provisions of Section 152 of the Companies Act, 2013.

Accordingly, in accordance with the provision of the Companies Act, 2013 and Articles of Association of the Company, Mr. Ravi C Raheja, Non-Executive & Non Independent Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. Avnish Bajaj and Ms. Abanti Sankaranarayanan were appointed as Additional Directors of the Company on October 25, 2013 and June 19, 2014 respectively. These directors hold their office as Directors upto the date of ensuing Annual General Meeting of the Company and are eligible for re-appointment.

Pursuant to Section 149, 152 and other applicable provisions of the Companies Act, 2013 and amendment to the Listing Agreement, your directors are seeking appointment of Prof. Nitin Sanghavi, Mr. Deepak Ghaisas and Mr. Nirvik Singh as non-retiring Independent Directors of the Company, for five consecutive years for a term upto March 31, 2019 and Mr. Avnish Bajaj and Ms. Abanti Sankaranarayanan as non-retiring Independent Directors of the Company, for five consecutive years for a term upto July 30, 2019. The Company has received requisite notice from a member proposing their appointment as Independent Directors of the Company.

The Company has received declarations from all the Independent Directors of the Company confirming that they satisfy the criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013 and clause 49 of the listing agreement with the Stock Exchanges.

Mr. Govind Shrikhande, Managing Director of the Company is liable to retire by rotation. Your directors seek to re-designate him as a permanent director of the Company whose office shall not be liable to determination by rotation, till such time as he remains a Managing Director of the Company, in accordance with the terms of his appointment and in accordance with the provisions of Section 152 of the Companies Act, 2013.

Brief particulars of these Directors are annexed to the notice convening the 17th Annual General Meeting in accordance with the provisions of the Companies Act, 2013 and the Listing Agreement entered into with the Stock Exchanges.

Mr. Shahzaad Dalal and Mr. Gulu L Mirchandani have informed the Board that due to time constraints and other personal commitments, they would not like that their appointment as Independent Directors under the Companies Act, 2013 be approved at the forthcoming Annual General Meeting of the Company and would continue as Independent Directors only till such date. The Board of Directors records its sincere appreciation and recognition of the valuable contribution and services rendered by them during their long association with the Company.

Corporate Governance

The Report on corporate governance as stipulated under clause 49 of the Listing Agreement forms part of this Report. The certificate from the Statutory Auditors of the Company, confirming the compliance with the conditions of corporate governance as stipulated under the aforesaid clause 49, is annexed to the Report on corporate governance.

Compliance with the Code of Conduct

The Company had evolved and adopted a Code of Conduct for its Board of Directors and its management personnel based on the principles of good corporate governance and best management practices. The declaration of compliance with the Code of Conduct has been received from them. The Code is available on the website of the Company. A certificate to this effect from Mr. Govind Shrikhande, Managing Director forms part of this Report.

Demat Suspense Account Unclaimed Shares

As on date there are 13 shareholders, holding 700 Equity Shares of Rs. 5/- each (post sub-division) allotted in Initial Public Offering of 2005, lying in the escrow account due to non- availability of their correct particulars. Despite various reminders to them, by Karvy Computershare Private Limited, our Registrar and Share Transfer Agent, no response has been received. As a result, the said unclaimed shares have been credited to ''Shoppers Stop Ltd - Unclaimed Shares Demat Suspense Account'' in view of compliance of clause 5A of the Listing Agreement.

Such shareholders may approach the Company with their correct particulars and proof of their identity for crediting requisite shares from Demat Suspense Account to their individual demat Account. During the year under review, no shares were transferred from the suspense account to any of the aforesaid shareholders. The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

Conservation of Energy, Technology absorption and Foreign Exchange earnings & outgo.

The Company is engaged in the continuous process of energy conservation through improved operational and maintenance practices. The brief of the particulars in respect of various steps and initiatives taken regarding conservation of energy and technology absorption and its disclosure as stipulated by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is as under:

1. All the Store Unit maintenance head and store managers were made aware about energy consumption of their store as per the connected load. Based on the connected load and operating hours, budgeted energy consumption is given to each stores and practice of taking daily logs and cross-checking the daily consumption with the budgeted units is adopted. This helps in curbing the unwanted consumption, motivated users to take all the possible measures to save the energy and helps in pointing out the discrepancies in the energy consumption pattern and corrective action to eliminate the discrepancies.

2. Controlled the energy consumption of HVAC system by optimizing the temperature inside the stores (24Â°C). This drive is the major contributor for the energy conservation for the stores.

3. Optimized lighting consumption by strictly controlling the operating hours as per the usage pattern. Colour coding is followed for distinguishing the different lighting (emergency, show window, signage''s, floor lighting, indirect lighting) switches; so that energy usage can be optimised.

4. Eliminated the unwanted night consumption and restricted usage of the night lighting during night work.

5. Installed capacitor banks to maintain the power factor to reduce the losses and avail PF incentive there by receiving 5% to 7% incentive on the energy bills.

6. These cumulative efforts resulted in the saving of 2,915,343 Units (Cost Rs. 303 Lacs) cumulatively by consistent monitoring and controlling the consumption at optimum level as compared to the consumption of the last year.

7. Company has also finalized the supplier of Wind Power for two of its stores in the state of Maharashtra. This should help reduce the power cost of these stores substantially, viability of this option purely depends on the MSEDCL & MERC norms.

The Company earns Foreign Exchange on sale of its merchandise to its customers. Foreign Exchange outgo during the year included purchase of capital goods, merchandise, professional fees etc. The foreign exchange earnings during the year was Rs. 6,194.01 lacs (previous year Rs. 5,393.36 lacs), whereas Foreign Exchange outgo was Rs. 5,058.93 lacs (previous year Rs. 4,821.10 lacs).

Particulars of Employees

The particulars of employees as required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, forms part of this Report. However, in pursuance 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 aforesaid information. The aforesaid information is also available for inspection at the Registered Office of the Company during its working hours. Any shareholder interested in such particulars may inspect the same.

Directors'' Responsibility Statement

Pursuant to the requirements of Section 217 (2AA) of the Companies Act, 1956, the Board of Directors confirms that:

1. In the preparation of the annual accounts for the year ended March 31, 2014, the applicable accounting standards have been followed along and no material departures have been made from the same;

2. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 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 fraud and other irregularities; and

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 wish to express their appreciation to all customers, business partners, suppliers, banks and financial institutions for their invaluable support and look forward to their continued support in the future. Your Directors place on record their sincere appreciation for the significant contributions made by all the associates at all levels; through their dedication, hard work and commitment towards the growth of the Company.

The Directors also acknowledges the confidence and faith reposed by Shareholders in the Company and look forward to have the same in future as well.

For and on behalf of the Board of Directors

Chandru L. Raheja June 19, 2014 Chairman

Mar 31, 2013

Dear Members,

The Directors present herewith 16th Annual Report on the business and operations of the Company together with the Audited Statements of Accounts for the year ended March 31, 2013.

Financial Performance (Rs. in lacs)

Year ended Year ended Particulars March 31, 2013 March 31, 2012

Retail Turnover

Own merchandise (including concession sales) 227,048.25 194,276.55

Consignment merchandise 26,111.84 22,289.34

Other Retail operating income 2,809.26 2,681.47

255,969.35 219,247.36

Less: Value Added Tax 12,073.84 10,505.10

Less: Cost of consignment merchandise 18,306.59 15,771.75

225,588.92 192,970.51

Other Income 1,721.47 1,868.76

227,310.39 194,839.27

Profit before Depreciation & Tax 11,100.34 13,552.94

Less: Depreciation 5,074.71 3,772.24

Profit before Tax 6,025.63 9,780.70

Less: Provision for Tax 2,108.78 3,354.78

Profit after Tax 3,916.85 6,425.92

Add: Balance brought forward from previous year 14,516.00 9,131.05

Amount available for Appropriation 18,432.85 15,556.97

Appropriation

Proposed Dividend (incl. Dividend Distribution Tax) 728.12 719.67

Transfer to General Reserve 195.84 321.30

Balance carried forward 17,508.89 14,516.00

Performance Review

During the year under review, your Company has opened 5 departmental stores i.e. one store each at Pune, Jalandhar, Coimbatore and two stores at Bengaluru taking its chain of stores to 55 stores (including two airport stores) spread across India. Further, the Company has also opened two "Home Stop" at Coimbatore and Chennai taking its tally to 13 stores.

The revenue of the Company is Rs. 227,310.39 lacs (previous year Rs. 194,839.27 lacs), registering a growth of 16.67% y-o-y basis. The net Profit achieved was Rs. 3,916.85 lacs (previous year Rs.. 6,425.92 lacs).

Dividend

Your Directors are pleased to recommend a dividend of Rs. 0.75 per equity share of Rs. 5 each. (Previous year Rs. 0.75 per equity share of Rs. 5 each). The payment of dividend is subject to approval of the members in the ensuing Annual General Meeting.

Awards and Recognition

As in the past years, awards and recognitions were conferred on your Company by leading organisations during the year under review: Some of them are:

- Dun & Bradstreet at Rolta Corporate Awards 2011.

- "Leadership Governance Award" in service category at Qimpro Best Prax Conclave 2012.

- Silver Award for ''Choose your Own Gift'' campaign by DMAI.

- Most Admired Retail Group of theYear and Most Admired Home Format of theYear for HomeStop at IRF 2012.

- Top Class Brand Award 2012-2013 by National Education & Human Resource Development Organisation.

- No. 1 Social Net Worth Company on Facebook by Fortune Magazine (India). Ranking for the Company has improved from Rank 297 to Rank 276.

- Most Trusted Retailer of the Year - Popular choice at ET Retail Awards.

- The 6th Loyalty Summit conferred the Company with following awards:

1. Loyalty Programmes of the Year - Retail Large Format

2. Best use of Social Media to Enhance Loyalty

3. Champion of Champions - Loyalty Programmes of the Year

- Best Mobile Marketing Campaign at Indian Digital Summit (hosted by IAMAI).

- World HRD Congress conferred the Company with following awards:

1. Most Innovative initiative Award for Goodie box

2. Best Talent Management Award for Baby Kangaroo Programmes

3. Organisation with innovative HR practices "I Pledge"

4. Learning and Talent Initiative Exercise for Lead & Leap Programmes.

- Best Online Retailer of the Year (Department Store) by ET NOW.

- POP-Instore Asia and Visual Merchandising & Retail Design Awards 2013 conferred the Companywith following awards:

1. Merit Award - Best Store Award > 20,000 sq. ft. - R-city Store

2. Merit Award - Green Initiative Award - Andheri store

3. Gold Award - Best Window Display

4. Gold Award - Best Visual Merchandising

Credit Rating

During the year, India Ratings & Research Private Limited (A Fitch Group Company) has assigned the following credit ratings:

1. ''INDAI'' for Commercial Paper Programmes of Rs. 500 million.

2. ''INDAI'' for Short Term Debt Programmes of Rs. 500 million.

During the year, Credit Analysis & Research Limited has awarded the following credit ratings:

1. CARE A1 (Non Fund Based) and CARE A (Fund Based) for Bank Facilities of Rs. 461.50 crores (enhanced from Rs. 401.50 crores).

2. CARE A1 for Commercial Paper issue/Short Term Debt (Series I) issue of the Company, aggregating to Rs. 100 crores.

3. CARE A1 for Commercial Paper issue/Short Term Debt (Series II) issue of the Company, aggregating to Rs. 40 crores.

4. CARE A for Non Convertible Debentures issue of Rs. 100 crores.

Finance

Your Company continues with various initiatives for bringing down the cost of borrowings which includes application of short-term instruments like commercial paper, working capital demand loans within working capital borrowing, long term loans for expansion at competitive terms, so as to have funds at competitive cost.

Employees Stock Option Plan

The grant of stock options to employees is a mechanism to align the interest of employees with those of the Company, to provide them with an opportunity to share the growth of the Company and also to foster the long-term commitment. Your Company has formulated and designed Employees Stock Option Plan Scheme for its and its subsidiary''s employees and options were granted in accordance with Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended. The Compensation/Remuneration Committee of the Company administer and monitor the same.

During the year under review, the Company has granted 200,000 Employee Stock Options at a grant price of Rs. 297/- per option to the specified employees of the Company and its subsidiary Companies.

During the year under review, the Company has allotted 417,383 equity shares of Rs. 5 each on exercise of vested options by certain employees under the said ESOP Schemes.

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.

Subsidiary Companies and Consolidated Financial Statements

In accordance with the Accounting Standard AS-21, the consolidated financial statements form part of this Annual Report. These consolidated financial statements provide financial information about your Company and its subsidiaries as a single entity.

Ministry of Corporate Affairs, Government of India vide General Circular No : 2/2011 dated February 8, 2011, has granted general exemption under Section 212 of the Companies Act, 1956, to the holding companies, from attaching the specified documents of its subsidiary companies, as referred in Section 212(1) of the said Act, with its Balance Sheet, on fulfillment of certain conditions. The Company has fulfilled these specified conditions and accordingly, the said documents of subsidiary companies are not attached to the financial statements of the Company. A summary of the financial performance of the subsidiary companies is given in this Annual Report. The annual accounts of the subsidiary companies and the related detailed information are made available to shareholders of the Company and subsidiary companies seeking such information. The Annual Accounts of subsidiary companies are also open for inspection by any member at the registered office of the Company and of the subsidiary companies.

Human Resources

The Company continued to create a productive, learning and caring environment by implementing robust and comprehensive HR processes and taking new initiatives to further align its Human Resource policies to meet the growing needs of its business. People development continues to be a key focus area in the Company. Special designed training modules for the frontline employees are being delivered from time to time to meet the training needs of the employees. Human relations remained cordial throughout the year. During the year, your Company organised various training programmes.

As on date of the Balance Sheet, the Company had a total of 6,052 Customer Care Associates.

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.

Auditors

Your Company''s Statutory Auditors, Deloitte Haskins & Sells, Chartered Accountants, Mumbai, will retire at the conclusion of the ensuing 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 recommend 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. Gulu Mirchandani and Mr. Deepak Ghaisas, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

A brief particular of Mr. Gulu Mirchandani and Mr. Deepak Ghaisas is annexed to the Notice convening the Sixteenth Annual General Meeting in accordance with the listing agreement entered into with the Stock Exchanges.

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 management personnel 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 them. The Code is available on the website of the Company. A certificate to this effect from Mr. Govind Shrikhande, Managing Director forms part of this Report.

Demat Suspense Account Unclaimed Shares

As on date there are 13 shareholders, holding 700 Equity Shares of Rs. 5/- each (post sub-division) allotted in Initial Public Offering of 2005, lying in the escrow account due to non-availability of their correct particulars. Despite various reminders to them, by Karvy Computershare Private Limited, our Registrar and Share Transfer Agent, no response has been received. As a result, the said unclaimed shares have been credited to ''Shoppers Stop Ltd. - Unclaimed Shares Demat Suspense Account'' in view of compliance of Clause 5A of the listing agreement. Such shareholders may approach the Company with their correct particulars and proof of their identity for crediting requisite shares from Demat Suspense Account to their individual Demat Account. During the year under review, no shares were transferred from the suspense account to any of the aforesaid shareholders. The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

Conservation of Energy, Technology absorption and Foreign Exchange earnings & outgo

The Company is engaged in the continuous process of energy conservation through improved operational and maintenance practices. The brief of the particulars in respect of various steps and initiatives taken regarding conservation of energy and technology absorption and its disclosure as stipulated by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is as under:

1. All the Store Unit maintenance head and store managers were made aware about energy consumption of their store as per the connected load. Based on the connected load and operating hours, budgeted energy consumption is given to each stores and practice of taking daily logs and cross-checking the daily consumption with the budgeted units is adopted. This helps in curbing the unwanted consumption, motivating users to take all the possible measures to save the energy and helps in pointing out the discrepancies in the energy consumption pattern and corrective action to eliminate the discrepancies.

2. Controlled the energy consumption of HVAC system by optimising the temperature inside the stores (24Â°C). This drive is the major contributor for the energy conservation for the stores.

3. Optimised lighting consumption by strictly controlling the operating hours as per the usage pattern. Colour coding is followed for distinguishing the different lighting (emergency, show window, signage''s, floor lighting, indirect lighting) switches; so that energy usage can be optimised.

4. Eliminated the unwanted night consumption and restricted usage of the night lighting during night work.

5. Installed capacitor banks to maintain the power factor to reduce the losses and avail PF incentive thereby receiving 5% to 7% incentive on the energy bills.

6. These cumulative efforts resulted in the saving of 2,124,330 Units (CostRs. 224 lacs) cumulatively by consistent monitoring and controlling the consumption at optimum level as compared to the consumption of the last year.

7. Company has also installed solar panels in Andheri Store to reduce energy cost and help reduce pollution.

8. Company has also finalised the supplier of Wind Power for two of its stores in Maharashtra. This should help reduce the power cost of these stores substantially.

The Company earns Foreign Exchange on sale of its merchandise to its customers. Foreign Exchange outgo during the year included purchase of capital goods, merchandise, professional fees, etc. The foreign exchange earnings during the year was Rs. 5,393.36 lacs (previous year Rs. 4,704.40 lacs), whereas Foreign Exchange outgo was Rs. 4,821.10 lacs (previous year Rs. 3,723.44 lacs).

Particulars of Employees

The particulars of employees as required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, forms part of this Report. However, in pursuance 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 aforesaid information. The aforesaid information is also available for inspection at the Registered Office of the Company during its 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 judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 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; and

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 Account, section of this Annual Report.

Acknowledgement

Your Directors wish to convey their appreciation to all customers, business partners, suppliers, banks and financial institutions for their invaluable support and look forward to continued support in the future. Your Directors place on record their sincere appreciation for the significant contributions made by all the associates at all levels; through their dedication, hard work and commitment towards the growth of the Company.

The Directors also acknowledge the confidence and faith reposed by Shareholders in the Company and look forward to having the same in future as well.

For and on behalf of the Board of Directors

Chandru L. Raheja

April 30, 2013 Chairman

Mar 31, 2012

The Directors are pleased to present the 15th Annual Report on the business and operations of the Company together with the Audited Statements of Accounts for the year ended March 31, 2012.

Financial Performance

(Rs.in lacs

Year ended Year ended

Particulars March 31, 2012 March 31, 2011

Retail Turnover Own merchandise (including concession sales) 194,276.55 167,270.86

Consignment merchandise 22,289.34 d 18,130.30

Other Retail operating income 2,681.47 2,186.88

219,247.36 187,588.04

Less: Value Added Tax 10,557.47 8,960.24

Less: Cost of consignment merchandise 15,771.75 12,965.82

192,918.14 165,661.98

Other Income 1,868.76 945.47

194,786.90 166,607.45

Profit before Depreciation & Tax 13,552.94 14,482.46

Less: Depreciation 3,772.24 3,099.88

Profit before Tax 9,780.70 11,382.58

Less: Provision for Tax 3,354.78 3,865.00

Profit after Tax 6,425.92 7,517.58

Add. Balance brought forward from previous year 9,131.05 2,685.19

Proposed Dividend (incl. Dividend Distribution tax) 719.67 695.84

Transfer to General Reserve 321.30 375.88

Balance carried forward 14,516.00 9,131.05

Performance Review

During the year under review, your Company has opened 13 departmental stores i.e. two stores in Chennai and Pune and one each at Indore, Vijayawada, New Delhi, Mysore, Latur, Ahmadabad, Mumbai, Bengaluru, Gurgaon, taking its chain of stores to 51 stores (including two airport stores) spread across India. Further, the Company has also opened seven "HomeStop" one each at Lucknow, Vijayawada, Pune, Bengaluru, Ahmedabad, Mumbai, Cyberabad taking its tally to 11 stores.

The revenue is Rs 194,786.90 lacs (previous year Rs 166,607.45 lacs), registering a growth of 16.91% y-o-y basis. The net profit achieved was Rs 6,425.92 lacs (previous year Rs 7,517.58 lacs).

Dividend

Your Directors are pleased to recommend a dividend of Rs 0.75 per equity share of Rs 5 each. [previous year Rs 0.75 per equity share of Rs 5 each.]

The dividend, once approved by members in the ensuing Annual General Meeting, will be paid out of the profits of the Company for the year.

Awards and Recognition

Your Company has been conferred inter-alia with the following awards and recognitions during the year under review:

- Best Supply Chain Excellence Award' in the Retail Vertical during the 5th Express, Logistics and Supply Chain Conclave, conducted by ELSC at Mumbai.

- "Department Store of the Year" Award at the Star Retail Award, 2011.

- Fortune Magazine (India) has ranked Shoppers Stop as No. 1 among Fortune 500 Companies for the highest Social Net worth on Facebook. Overall, Fortune 500 ranking for the Company has also improved from Rank 351 to 297 this year.

- Most Admired Beauty Products Retailer of the year at Images Beauty & Wellness Awards.

- Winner for three consecutive years in Customer & Brand Loyalty in the "Retail Sector - Large Formats" at Loyalty Summit Award.

- Direct Marketing Campaign of the year in Loyalty Summit Award.

- Merit certificate in the Department Store > 20,000 sq. ft. at VMRD Retail Design Award, 2012 for Rohini store.

Credit Rating

During the year, Credit Analysis & Research Limited (CARE) has awarded the following credit ratings:

1. CARE A1 to Commercial paper (CP) issue/ Short Term Debt (STD) issue of the Company, aggregating to Rs 40 crores (enhanced from Rs 30 crores).

2. CARE A1 to Commercial Paper (CP) issue/ Short Term Debt (STD) issue of the Company, aggregating to Rs 100 crores (enhanced from Rs 70 crores) (carved out of sanctioned fund based working capital limits).

3. CARE A for long term bank facility of Rs 230 crores

4. CARE A1 for short term bank facility of Rs 96.50 crores and

5. CARE A for Non-Convertible Debentures issue of Rs 100 crores

During the year, Fitch Ratings India Private Limited has assigned the following credit ratings:

1. Fitch A1 (and) rating for the short term debt / Commercial paper programme of Rs 50 Crores.

2. Fitch A1 (ind) rating for the Commercial programme of Rs 50 crores (carved out of sanctioned fund based working capital limits) Finance Your Company continues with various initiatives for bringing down the cost of borrowings which includes application of short-term instruments like commercial paper, working capital demand loans within working capital borrowing, long term loans for expansion at competitive terms, so as to have funds at competitive cost.

Employees Stock Option Plan

The grant of stock options to employees is a mechanism to align the interest of employees with those of the Company, to provide them with an opportunity to share the growth of the Company and also to foster the long-term commitment. Your Company has formulated and designed various Employees Stock Option Plan Schemes for its employees and options were granted in accordance with Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended. The Compensation/ Remuneration Committee of the Company administers and monitors the same.

During the year under review, the Company has granted 189,382 Employee Stock Options at a grant price of Rs 336/- per option to the specified employees of the Company and its subsidiary Companies.

During the year under review, the Company has allotted 395,298 equity shares of Rs 5 each on exercise of vested options by certain employees under the said ESOP Schemes.

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.

Subsidiary Companies and Consolidated Financial Statements

In accordance with the Accounting Standard AS-21, the consolidated financial statements form part of this Annual Report. These consolidated financial statements provide financial information about your Company and its subsidiaries as a single entity.

Ministry of Corporate Affairs, Government of India vide General Circular No : 2/2011 dated February 8, 2011, has granted general exemption under section 212 of the Companies Act, 1956, to the holding companies, from attaching the specified documents of its subsidiary companies, as referred in section 212(1) of the Act, with its balance sheet, on fulfillment of certain conditions. The Company has fulfilled those specified conditions and accordingly, the said documents of subsidiary companies are not attached to the financial statements of the Company. A summary of the financial performance of the subsidiary companies is given in this Annual Report. The annual accounts of the subsidiary companies and the related detailed information are made available to shareholders of the Company and subsidiary companies seeking such information. The Annual Accounts of subsidiary companies are also open for inspection by any member at the registered office of the company and of the subsidiary company.

During the year under review, on November 14, 2011, the Company has acquired 49% of equity share capital of Gateway Multichannel Retail (India) Ltd., (Gateway) from Hyper city Retail (India) Ltd., at its face value making Gateway, as its 100% subsidiary.

Human Resources

The Company takes great pride in the commitment, competence and vigour shown by its employees in all realms of business. The Company continued to create a productive, learning and caring environment by implementing robust and comprehensive HR processes and taking new initiatives to further align its HR policies to meet the growing needs of its business. People development continues to be a key focus area in the Company. Special designed training modules for the frontline employees are being delivered from time to time to meet the training needs of the employees. Human relations remained cordial throughout the year. As in the earlier years, the Company continues to conduct several training programmes.

As on date of the Balance Sheet, the Company had a total of 5,371 Customer Care Associates.

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.

Auditors

Your Company's Statutory Auditors, Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the ensuing 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 recommend 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, Prof. Nitin Sanghavi and Mr. Nirvik Singh, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. A brief resume of these Directors, nature of their expertise in specific functional areas, names of companies in which they hold the directorships/chairmanships of Committees as stipulated under Clause 49 of the listing agreement with the Stock Exchanges are provided in a statement annexed to the Notice convening the Fifteenth 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 management personnel 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 them. The Code is available on the website of the Company. A certificate to this effect from Mr. Govind Shrikhande, Managing Director, forms part of this Report.

Demat Suspense Account Unclaimed Shares

As on date there are 13 shareholders, holding 700 Equity Shares of Rs 5/- each (post sub-division) allotted in Initial Public Offering of 2005, lying in the escrow account due to non-availability of their correct particulars. Despite various reminders to them, by Karvy Computershare Private Limited, our Registrar and Share Transfer Agent, no response has been received. As a result, they said unclaimed shares have been credited to 'Shoppers Stop Ltd. - Unclaimed Shares Demat Suspense Account' in view of compliance of Clause 5A of the listing agreement. Such shareholders may approach the Company with their correct particulars and proof of their identity for crediting requisite shares from Demat Suspense Account to their individual demat Account. During the year under review, no shares were transferred from the suspense account to any of the aforesaid shareholders. The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

The Company is engaged in the continuous process of energy conservation through improved operational and maintenance practices. The brief of the particulars in respect of various steps and initiatives taken regarding conservation of energy and technology absorption and its disclosure as stipulated by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is as under.

1. All the Store Unit maintenance head and store managers were made aware about energy consumption of their store as per the connected load. Based on the connected load and operating hours, budgeted energy consumption is given to each stores and practice of taking daily logs and cross-checking the daily consumption with the budgeted units is adopted. This helps in curbing the unwanted consumption, motivated users to take all the possible measures to save the energy. Helps in pointing out the discrepancies in the energy consumption pattern and corrective action to eliminate the discrepancies.

2. Controlled the energy consumption of HVAC system by optimizing the temperature inside the stores (24ÃÂ°C). This drive is the major contributor for the energy conservation for the stores.

3. Optimized lighting consumption by strictly controlling the operating hours as per the usage pattern. Colour coding is followed for distinguishing the different lighting (emergency, show window, signage's, floor lighting, indirect lighting) switches; so that energy usage can be optimized.

4. Eliminated the unwanted night consumption and restricted usage of the night lighting during night work.

5. Installed capacitor banks to maintain the power factor to reduce the losses and avail PF incentive there by receiving 5 to 7% incentive on the energy bills.

6. These cumulative efforts resulted in the saving of 895,636 Units (Cost Rs 77.05 lacs) cumulatively by consistent monitoring and controlling the consumption at optimum level as compared to the consumption of the last year.

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. The foreign exchange earnings during the year was Rs 4,707.40 lacs (previous year Rs 4,487.10 lacs), where as Foreign Exchange outgo was Rs 3723.44 lacs (previous year Rs 4,815.20 lacs).

Particulars of Employees

The particulars of employees as required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, forms part of this Report. However, in pursuance 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 its 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 confirms 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 judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 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 this Annual Report.

Acknowledgement

Your Directors wish to convey their appreciation to all customers, business partners, suppliers, banks and financial institutions for their invaluable support and look forward to continued support in the future. Your Directors place on record their appreciation for the enormous contribution made by all the associates at all levels; their competence, perseverance, and hard work that has enabled the Company to cross new milestones on a continual basis.

And to you our shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

For and on behalf of the Board of Directors

Chandru L. Raheja

April 30, 2012 Chairman

Mar 31, 2011

The Directors are pleased to present the 14th Annual Report on the business and operations of the Company together with the Audited Statements of Accounts for the year ended March 31, 2011.

Financial Performance

(Rs. in lacs)

Year ended Year ended Particulars March 31,2011 March 31,2010

Retail Turnover

Own merchandise (including concession sales) 172,583.12 141,583.75

Consignment merchandise 18,130.30 13,074.07

Other Retail operating income 2,186.88 2,178.93

192,900.30 156,836.75

Less: Value Added Tax 8,960.24 6,856.84

Less: Cost of consignment merchandise 12,965.82 9,429.83

170,974.24 140,550.08

Other Income 945.47 631.17

171,919.71 141,181.25

Profit before Depreciation & Tax 14,482.46 9,669.57

Less: Depreciation 3,099.88 3,102.54

Profit before Tax 11,382.58 6,567.03

Less: Provision for Tax 3,865.00 1,543.98

Profit after Tax 7,517.58 5,023.05

Add/(Less): Balance brought forward from previous year 2,685.19 (1,476.00)

Proposed Dividend (incl. Dividend Distribution Tax) 695.84 610.71

Transfer to General Reserve 375.88 251.15

Balance carried forward 9,131.05 2,685.19

Performance Review

Your Company has opened eight departmental stores i.e. one each at Aurangabad, Bengaluru, Bhopal, Durgapur, Indore, New Delhi, Pune and Siliguri, taking its chain of stores to 40 stores (including two airport stores) spread across India. Further, the Company has also opened one "HomeStop" at Lucknow, taking its tally to 5 stores.

The revenue is Rs. 171,919.71 lacs (previous year: Rs. 141,181.25 lacs), registering a growth of 21.77% y-o-y basis. The net Profit achieved was Rs. 7,517.58 lacs (previous year net profit of Rs. 5,023.05 lacs).

Dividend

Your Directors are pleased to recommend a dividend of Rs. 0.75 per equity share of Rs. 5 each, [(previous year: Rs. 1.50) per equity share of Rs. 10 each.]

The dividend, once approved by members in the ensuing Annual General Meeting will be paid out of the profits of the Company for the year and will sum up to a total of Rs. 695.84 lacs, including dividend distribution tax.

Awards and Recognition

Your Company has been conferred inter-alia with the following awards and recognitions during the year under review:

- Department Store of the Year by Star Retailer Awards.

- Merit Certificate in the category Department Store > 20000 sq.ft. at the VMRD Retail Design Awards 2011.

- Prestigious Loyalty award for Customer & Brand loyalty in the Retail Sector at the Loyalty Summit.

- Best Retail Marketing Campaign of the Year Award and Customer Loyalty programme award at the 7th Reid & Taylor Awards for Retail Excellence at Asia Retail Forum (Asia Retail Congress).

- Marketing Idea of The Year award for the Zoozoo merchandise tie-up with Vodafone-Essar at ET Retail Awards, backed by the Economic Times and Retailers Association of India (RAI).

- Most Respected Company in the Retail Sector by Business World.

- shoppersstop.com has been recognised as the "Most Admired Non-Store Fashion and Lifestyle Retailer" of the Year at the Images Fashion Awards 2011.

Further Issue of Capital

To meet the fund requirements entailed by the strong growth potentials, the Company issued 2,000,000 equity shares of Rs. 10/- each to Qualified Institutional Buyers at a price of Rs. 649/- in accordance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 & pursuant to the approval of members accorded by Postal Ballot on December 16,2009. Further the Company has also simultaneously allotted 4,000,000 equity shares of Rs. 10/- each at a price of Rs. 307.18/-, to the promoters of the Company on preferential basis, consequent upon exercise of their option for conversion of 4,000,000 warrants, in accordance with SEBI Guidelines.

Credit Rating

During the year. Fitch Ratings India Private Limited has upgraded rating for commercial paper and short-term debt programme of Company from "F1 (ind)" to "F1 + (ind)". The limit of the rating has been increased from Rs. 80 crores to Rs. 100 crores out of which Rs. 50 crores would be carved out of the sanctioned working capital limit of the Company.

During the year. Credit Analysis & Research Limited (CARE) has awarded "PR1 +" rating for commercial paper and short-term debt programme of Company for Rs. 100 crores, out of which Rs. 70 crores would be carved out of the sanctioned working capital limit of the Company. Your Company has also obtained credit rating from CARE for long-term bank facilities of Rs. 291 crores and short term bank facilities of Rs. 40 crores. The rating assigned for long-term bank facilities and short-term bank facilities are "CARE A+" and "PR1 +" respectively. Your Company has also obtained credit rating "CARE A +" from CARE for Non-Convertible Debenture Issue of Rs. 100 crores.

Finance

Your Company continues with various initiatives for bringing down the cost of borrowings which includes application of short- term instruments like commercial paper, working capital demand loans within working capital borrowing, so as to have funds at competitive cost.

Sub-division of shares

As approved by members, by Postal Ballot on December 23, 2010, the Company has sub-divided the equity share of the face value of Rs. 10 each into two equity shares of Rs. 5 each. The Company had fixed January 13,2011 as the Record Date for the purpose of sub-division of the equity shares.

Employees Stock Option Plan

The grant of stock options to employees is a mechanism to align the interest of employees with those of the Company, to provide them with an opportunity to share the growth of the Company and also to foster the long-term commitment. Your Company has formulated and designed various Employees Stock Option Plan Schemes for its employees and options were granted in accordance with Securities and Exchange Board of India (Employees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended. The Compensation/ Remuneration Committee of the Company administer and monitor the same.

During the year under review, the Company has allotted 154,420 equity shares of Rs. 10 each (before sub-division as stated above) and 29,308 equity shares of Rs. 5/- each on exercise of vested options by certain employees under the said ESOP Schemes.

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.

Subsidiary Companies and Consolidated Financial Statements

In accordance with the Accounting Standard AS-21 on consolidated financial statements, your Directors have pleasure in attaching the consolidated financial statements, which form part of this Annual Report. These consolidated financial statements provide financial information about your Company and its subsidiaries as a single entity.

Ministry of Corporate Affairs, Government of India vide General Circular No : 2/2011 dated February 8, 2011, has granted general exemption under Section 212 of the Companies Act, 1956, to the holding companies, from attaching the specified documents of its subsidiary companies, as referred in Section 212(1) of the Act, with its Balance Sheet, on fulfillment of certain conditions. The Company has fulfilled these specified conditions and accordingly, the said documents of subsidiary companies are not attached to the financial statements of the Company. A summary of the financial performance of the subsidiary companies is given in this Annual Report. The annual accounts of the subsidiary companies and the related detailed information are made available to shareholders of the company and subsidiary companies seeking such information. The Annual Accounts of subsidiary companies are also open for inspection by any member at the registered office of the company and of the subsidiary company.

During the year under review, on June 30, 2010, the Company has increased its equity stake in Hypercity Retail (India) Ltd.; from 19% to 51% and made it, as its subsidiary. The Company also holds 51% of Hypercitys preference share capital.

The Company and Crossword Bookstores Limited, its wholly-owned subsidiary has mutually terminated the franchise agreement with effect from end of business hours of September 30, 2010 and accordingly, "Crossword" business was handed over back to Crossword Bookstores Limited.

Human Resources

The Company takes great pride in the commitment, competence and vigour shown by its employees in all realms of business. The Company continues to take new initiatives to further align its HR policies to meet the growing needs of its business. People development continues to be a key focus area in the Company. Special designed training modules for the frontline employees are being delivered from time to time to meet the training needs of the employees. Human relations remained cordial throughout the year. As in the earlier years, the Company conducted several training programmes.

As on date of the Balance Sheet, the Company had a total of 4,317 Customer Care Associates.

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.

Auditors

Your Companys Statutory Auditors, Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the ensuing 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 recommend the re-appointment of Deloitte Haskins & Sells, Chartered Accountants, as the Statutory Auditors of the Company.

Directors

In appreciation of Mr. Govind Shrikhandes farsighted vision, wisdom and guidance, which have been invaluable to the Companys growth, he was elevated as a Customer Care Associate & Managing Director of the Company for a period of 3 years commencing from July 29, 2010. Before this appointment, Mr. Shrikhande was President & CEO & Executive Director of the Company.

Your Directors would like to place on record their sincere gratitude towards the guidance and contribution made by Mr. Shrikhande and welcomes him, as the Managing Director of the Company.

In accordance with the provision of the Companies Act, 1956 and Articles of Association of the Company, Mr. B. S. Nagesh and Mr. Shahzaad Dalai, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer them for re-appointment. A brief resume of these Directors, nature of their expertise in specific functional areas, names of companies in which they hold the directorships/chairmanships of Committees of the Board as stipulated under Clause 49 of the Listing Agreement with the stock exchanges are given in the explanatory statement annexed to the Notice convening the fourteenth 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 management personnel 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 them. The Code is available on the website of the Company. A certificate to this effect from Mr. Govind Shrikhande, Managing Director forms part of this Report.

Demat Suspense Account Unclaimed Shares

During the year under review, 50 equity shares of Rs. 5/- each were transfered from the suspense account to a shareholder demat account. As on date, there are 700 Equity Shares of Rs. 5/- each (post sub-division), which were allotted in Initial Public Offering of 2005, were lying in the escrow account due to non-availability of 13 shareholders correct particulars. Despite various reminders to them, by Karvy Computershare Private Limited our Registrar and Share Transfer Agent, no response has been received. As a result, the said unclaimed shares are credited to Shoppers Stop Ltd - Unclaimed Shares Demat Suspense Account in view of compliance of Clause 5A of the Listing Agreement. Such shareholders may approach the Company with their correct particulars and proof of their identity for crediting requisite shares from the Demat Suspense Account to their individual demat Account. The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo

The Company is engaged in the continuous process of energy conservation through improved operational and maintenance practices. The brief of the particulars in respect of various steps and initiatives taken regarding conservation of energy and technology absorption and its disclosure as stipulated by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is as under:

- Daily capturing and monitoring the energy consumption in every store.

- Adoption of Variable Frequency Drives (VFDs) for Air handling units with temperature sensors.

- Adoption of new LED lighting to reduce the energy consumption in lighting.

- Controlled the energy consumption of HVAC system by optimising the temperature inside the stores.

- Installed capacitor Banks to Maintain the Power factor and reduce the losses.

- Ensure preventive maintenance schedules genuinely to have better efficiency and output from the equipments.

- All above efforts resulted in the conservation of 1,118,171 nos of Units of electricity across the chain during the year which amounts to appx. Rs. 85.14 lacs.

The Company also proposes to commence energy auditing, improvements in the pumping system installed at standalone stores, reduction in energy cost in due course of time.

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. The foreign exchange earnings during the year was Rs. 4,487.10 lacs (previous year: Rs. 4,224.41 lacs), where as Foreign Exchange outgo was Rs. 4,815.20 lacs (previous year: Rs. 3,387.03 lacs).

Particulars of Employees

The particulars of employees as required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, forms part of this Report. However, in pursuance 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 its 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 confirms 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 judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 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 wish to convey their appreciation to all customers, business partners, suppliers, banks and financial institutions for their invaluable support and look forward to continued support in the future. Your Directors place on record their appreciation for the significant contribution made by all the associates at all levels; their competence, perseverance, and hard work that has enabled the Company to cross new milestones on a continual basis.

And to you our shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

For and on behalf of the Board of Directors

Chandru L. Raheja Chairman

April 29, 2011

Mar 31, 2010

The Directors are pleased to present the Thirteenth Annual Report on the business and operations of the Company together with the Audited Statements of Accounts for the year ended March 31, 2010.

Financial Performance

(Rs. in lacs) Year ended Year ended Particulars March 31, March 31, 2010 2009 Retail Turnover Own merchandise (including concession sales) 141,583.75 128,152.70 Consignment merchandise 13,074.07 10,158.10 Other Retail operating income 2,178.93 1,759.40 156,836.75 140,070.20 Less: Value Added Tax 6,856.84 6,437.70 Less: Cost of consignment merchandise 9,429.83 7,319.40 140,550.08 126,313.10 Other income 631.17 795.10 141,181.25 127,108.20 Profit/(Loss) before Depreciation & Tax 9,669.57 (122.60) Less: Depreciation 3,102.54 6,313.10 Profit/(Loss) before Tax 6,567.03 (6,435.70) Less: Provision for Tax 1,543.98 (63.90) Profit/(Loss) after Tax 5,023.05 (6,371.80) Add/(Less): Balance brought forward from previous year (1,476.00) 4,895.80 Proposed Dividend (incl. Dividend Distribution Tax) 610.71 - Transfer to General Reserve 251.15 - Balance carried forward 2,685.19 (1,476.00)

Performance Review

Your Company has opened four departmental stores i.e. one at Bengaluru, two at Hyderabad and one at Amritsar, taking its chain of stores to 34 stores (including HomeStop) spread across India.

The revenue is Rs. 141,181.25 lacs (previous year Rs. 127,108.20 lacs), registering a growth of 11.07% y-o-y basis. The net Profit achieved was Rs. 5,023.05 lacs (previous year net loss of Rs. 6,371.80 lacs).

Dividend

Your Directors are pleased to recommend a dividend of Rs. 1.50 (previous year Nil) per equity share of Rs. 10 each.

The dividend, once approved by members in the ensuing Annual General Meeting will be paid out of the profits of the Company for the year and will sum up to a total of Rs. 610.71 lacs, including dividend distribution tax.

Awards and Recognition

Your Company has been conferred inter-alia with the following awards and recognitions during the year under review:

- Best Distribution Centre Management System at Network Computing EDGE and PC Quest Enterprise Award - 2009.

- Best Visual Merchandising (Store Launch Category) at VMRD Retail Design Award - 2009.

- Most Admired Retailer of the Year- Consumer Relations at IRF 2009.

- Customer & Brand Loyalty in the Retail Sector at Loyalty Summit Award 2010.

- Most Admired Large Format National Fashion Retailer - Outstanding Achievement in Consumer Recognition and Loyalty at the Images Fashion Forum.

- Most Admired Fashion Retail Professional of the year to Mr. Govind Shrikhande at the Images Fashion Forum.

- Gitanjali IFA Most Admired Large Format Retailer of the year Ã Partner Awards

- Gini Jony IFA Most Admired Large Format Retailer of the year Ã Partner Awards

- Triumph Maximum Consumer Reach Ã Partner Awards

Share Capital

During the year under review, the paid up equity share capital of the Company has increased by Rs. 4.85 lacs on account of allotment of equity shares pursuant to exercise of stock options under ESOP Schemes.

Credit Rating

Fitch Ratings India Private Limited has maintained ÃF1(ind)Ã rating for commercial paper and short term debt programme of Company for Rs. 50 crores and Rs. 30 crores respectively.

Finance

Your Company continues with various initiatives for bringing down the cost of borrowings which includes application of short term instruments so as to have increase in cash flows.

The Company had obtained observations from Securities & Exchange Board of India in respect of its Right Issue of Rs. 500 crores (subsequently reduced to Rs. 300 crores). The validity of the said observations had expired and accordingly the Right Issue has been dropped.

Warrants to Promoters and Qualified Institutional Placement

As approved by members, through Postal Ballot on December 16, 2009, and in accordance with the provisions of Chapter VII of the Securities & Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009, the Company has allotted 4,000,000 warrants at a price of Rs.307.18 each to certain Promoters. Each warrant will be convertible into one equity share of Rs. 10 each.

Further, members through Postal Ballot have also approved to offer, issue and allot upto 4,000,000 Equity Shares and/ or Securities convertible into upto 4,000,000 equity shares of the Company, in one or more tranches, by way of Qualified Institutional Placement ("QIP").

Employees Stock Option Plan

Your Company has formulated and designed various Employees Stock Option Plan Schemes (ESOP Schemes) for employees. During the year under review, the Company has allotted 48,521 Equity Shares of Rs. 10 each on exercise of vested options by certain employees under the said ESOP Schemes.

During the year under review, under Employees Stock Option Plan Scheme 2008, the Company has granted 516,400 stock options at an exercise price of Rs. 110/- on April 29, 2009 and 200,000 stock options at an exercise price of Rs. 382/- on March 24, 2010 respectively to the specified employees.

Further, 632,931 Stock Options granted under Employees Stock Option Plan Scheme 2005 have been surrendered to the Company.

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.

Subsidiaries

Ministry of Corporate Affairs, Government of India, vide order No. 47/127/2010-CL-III dated March 22, 2010, has granted approval that the requirement to attach various documents in respect of subsidiary companies, as set out in sub-section (1) of Section 212 of the Companies Act, 1956, shall not apply to the Company. Accordingly, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. Financial information of the subsidiary companies, as required by the said order, is disclosed in the Annual Report. The Annual Accounts of the subsidiary companies and the related detailed information will be made available to any member of the Company and its subsidiaries, who may be interested in seeking such information. The annual accounts of the subsidiary companies will also be kept open for inspection by any investor at the Registered Office of the Company and that of the respective subsidiary companies. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary companies, which has been duly audited by the Statutory Auditors.

Crossword Bookstores Limited, a wholly owned subsidiary of the Company had appointed the Company, w.e.f. July 1, 2006, as its master franchisee, pursuant to the Master Franchise Agreement, to carry on ÃCrosswordÃ business at its existing and new store premises which may be identified by the Company from time to time. Now, the Company and Crossword, propose to terminate the said Agreement and handover ÃCrosswordÃ business back to Crossword Bookstores Limited, together with its fixed assets, current assets, rights, liabilities/ obligations of all nature and kind along with its employees. The Company proposes to seek, members approval to handover ÃCrosswordÃ business back to Crossword Bookstores Ltd; by postal ballot under section 293(1)(a) of the Companies Act, 1956.

Human Resources

The Company takes great pride in the commitment, competence and vigour shown by its employess in all realms of business. The Company continues to take new initiatives to further align its HR policies to meet the growing needs of its business.

People development continues to be a key focus area in the Company. Special designed training modules for the frontline employees are being delivered from time to time to meet the training needs of the employees.

As on date of the Balance Sheet, the Company had a total of 3,851 Customer Care Associates.

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.

Auditors

Your CompanyÃs Statutory Auditors, Deloitte Haskins & Sells, Chartered Accountants, Mumbai, retire at the conclusion of the ensuing 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 for the financial year 2010-2011.

Directors

In appreciation of Mr. B. S. Nageshs farsighted vision, wisdom and guidance, which have been invaluable to the CompanyÃs growth, he was elevated as Non-Executive Vice Chairman with effect from August 18, 2009, after his successful association for more than eighteen years with the Company. He played a key role in the phenomenal growth and success of the Company.

Apart from his extraordinary entrepreneurial acumen, Mr. Nagesh is a great visionary. His affectionate care for the well-being of the employees, his belief in human values and business principles & ethics are some of the principles upon which the Company stands today. They have enabled the Company to build a successful and sustainable business model.

Your directors would like to place on record their sincere gratitude towards the guidance and contribution made by Mr. B. S. Nagesh and welcomes him as the Vice Chairman of the Company.

Mr. Govind Shrikhande has been entrusted with the responsibility of the day to day management of the affairs of the Company, as the President & CEO & Executive Director of the Company with effect from August 18, 2009.

In accordance with the provision of the Companies Act, 1956 and Articles of Association of the Company, Mr. G. L. Mirchandani and Mr. Deepak Ghaisas, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. 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 Thirteenth 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 management personnel 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 them. The Code is available on the website of the Company.

A certificate to this effect from Mr. Govind Shrikhande, President & Chief Executive Officer & Executive Director forms part of this Report.

Demat Suspense Account Unclaimed Shares

There are 315 Equity Shares of the Company which were allotted in Initial Public Offering of 2005, were lying in the escrow account due to non- availability of shareholders correct particulars. Despite various reminders to them, by Karvy Computershare Private Limited our Registrar and Share Transfer Agent, no response has been received. As a result, the said unclaimed shares are credited to ÃShopperÃs Stop Ltd - Unclaimed Shares Demat Suspense Account; in view of compliance of Clause 5A of the Listing Agreement. Such shareholders may approach the Company with their correct particulars and proof of their identity for crediting requisite shares from the Demat Suspense Account to their individual demat Account. The voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

Postal Ballot

The Company proposes to seek approval of members on June 21, 2010, through postal ballot in respect of the following:

1. Making investment in securities by subscription/ purchase or otherwise / loans or advances/ guarantee/ security(ies) etc. in Hypercity Retail (India) Ltd; upto an extent of Rs. 200 Crores under Section 372A of the Companies Act, 1956.

2. To handover ÃCrosswordÃ business to Crossword Bookstores Limited, a wholly owned subsidiary of the Company under Section 293(1)(a) of the Companies Act, 1956.

3. To delete the existing Article 150 Ã ÃCommon SealÃ of the Articles of Association of the Company and substituting it with a new Article under Section 31 of the Companies Act, 1956.

Conservation of Energy, Technology absorption and Foreign Exchange earnings & outgo.

The Company is engaged in the continuous process of energy conservation through improved operational and maintenance practices. The brief of the particulars in respect of various steps and initiatives taken regarding conservation of energy and technology absorption and its disclosure as stipulated by the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is as under.

- Daily maintenance of power consumption in every store.

- Adoption of Variable Frequency Drives (VFDÃs) for Air handling units with temperature sensors.

- Adoption of new LED lighting to reduce the energy consumption.

- Installation of lighting energy saving devices (Step down transformer) for Energy conservation.

- Controlled the energy consumption of HVAC system by optimizing the temperature inside the stores.

- Optimized lighting by making necessary changes in the circuits and installing the sensors.

- Installed capacitor Banks to Maintain the Power factor and reduce the losses.

- DSM initiatives to reduce the excess unutilized demand there by reducing the fixed energy cost.

- All above efforts resulted in the conservation of 4,043,638 units of electricity across the chain during the year which amounts to appx. Rs. 309.74 lacs.

The Company also proposes to commence energy auditing, improvement in pumping system, reduction in energy cost in due course of time.

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. The foreign exchange earnings during the year was Rs. 4,224.40 lacs (previous year Rs. 4,392.57 lacs), where as Foreign Exchange outgo was Rs. 3,387.03 lacs (previous year Rs. 3,745.49 lacs).

Particulars of Employees

The particulars of employeesÃ as required under Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, forms part of this Report. However, in pursuance 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 its working hours. Any shareholder interested in such particulars may inspect the same.

DirectorsÃ 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 judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2010 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 Ãgoing concernÃ 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 wish to convey their appreciation to all customers, business partners, suppliers, banks and financial institutions for their invaluable support and look forward to continued support in the future.

Your Directors would also like to place on record their sincere appreciation to the employees of the company for the total commitment, dedication and hard work at all levels. To them goes the credit for the CompanyÃs achievements.

And to you our shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.

For and on behalf of the Board of Directors Mumbai, Chandru L. Raheja April 28, 2010 Chairman

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