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Notes to Accounts of Shoppers Stop Ltd.

Mar 31, 2023

Other disclosures :

The Company has one class of equity shares having a par value of '' 5 per share. Each equity shareholder is eligible for one vote per share held. Each equity shareholder is entitled to dividends as and when the Company declares and pays dividend after obtaining shareholders'' approval. In the event of liquidation of the company, the holders of equity shares will be entitled to receive the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The Company has issued and allotted 1,47,614 (2022 : 1,41,315 ) number of shares under Share options schemes to certain employees- Refer Note 34

For addition and deductions under each of the above heads see Statement of changes in equity.

Securities premium

Securities premium is used to record the premium received on issue of shares. The securities premium can be utilised only in accordance with the provisions of the Companies Act 2013.

General reserve

The General Reserve is mainly created/built by the Company from time to time by transferring the profits from retained earnings. This reserve may be utilised mainly to declare dividend as permitted under the Companies Act 2013.

Share options outstanding account

Share options outstanding account relates to share options granted by the Company to certain employees under share option plan. Further information about share based payments to employees is set out in Note 34.

15.1 Term Loans are secured by First Pari Passu charge on entire Current Assets including Stocks & Books debts, the entire movable fixed assets, Lease deposit excluding exclusive lien on lease Deposit to the extent of '' 26.62 Crores by Axis Bank Ltd , Escrow Account of debit card and credit card receivables.

15.3 Borrowings are carried at amortised cost.

15.4 The Company has used the borrowings from the banks for the specific purpose for which it was taken at the balance sheet date. All the quarterly returns filed by the Company with the banks in which total income,total current assets and current liabilities are in agreement with the books of accounts for financial year 22-23 and 21-22.

15.5 The term loan from HDFC bank has a lien against Fixed deposits of ''15 crs kept with HDFC.

15.A1 Loans are secured by a first pari passu charge on stock,book debts, hypothecation charge on credit card/debit card receivables (Escrow account) and all the movable fixed assets of the Company, both present & future except ICICI Bank loan which is secured by first pari passu charge on the current assets and all the movable fixed assets of the company both present & future excluding leasehold rights,lease deposits & Shoppers Stop brands.

27. Ind AS 116 Leases was notified by MCA on March 30, 2019 and it replaces Ind AS 17 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after April 1, 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees - leases of ''low-value'' assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less).

27.3 Covid-19-Related Rent Concessions :

As described in Note 2.2.III ,the 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 Concessions" effective from the period beginning on or after April 1, 2020.

Many lessors have provided rent concessions to the Company as a result of the Covid-19 pandemic. Rent concession include rent holidays or rent reductions for a period of time. The amendment is to provide lessees that have been granted Covid-19 related rent concessions with practical relief, while still providing useful information about leases to users of the financial statements.

As a practical expedient, the Company elected not to assess a Covid-19 related rent concession from a lessor is a lease modification. and change in lease payments resulting from the Covid-19 related rent concession the same way it would account for the change under Ind AS 116, if the change were not a lease modification. The practical expedient applies only to rent concessions occurring as a direct consequence of the Covid-19 pandemic.

The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Company''s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised.

28. EARNING PER EQUITY SHARE

Basic EPS amounts are calculated by dividing the loss for the year attributable to equity holders of the Company by weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

29. Contingent liabilities and commitments:

Particulars

March 31, 2023

March 31, 2022

i) Contingent liabilities

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

Income tax claims disputed by the Company relating to disallowances aggregating *

182.12

249.39

*2023 : As at March 31, 2023, the Company has outstanding demands amounting to ''180.24 crores w.r.t TDS Disallowances and ''1.88 crores w.r.t. notional interest and disallowances under Section 14A for AY 2020-21 and order u/s. 201 for AY 2019-20.

Update in FY 22-23 : During the year ended March 31, 2023, the Company has received favourable ITAT order for A.Y.2017-18 and A.Y.2012-13 amounting to ''44.09 crores and ''23.41 crores respectively against non deduction on TDS on contract manufacturing goods. The Company has received order u/s.201 for AY 2019-20 amounting to ''0.23 crores for non deduction of TDS, the Company has filed appeal with CIT (Appeal) against the same.

* 2022: As of March 31, 2022, the Company had outstanding demands amounting to '' 247.74 crores w.r.t. to TDS Disallowances and amounting to '' 1.65 crores w.r.t. notional interest and disallowances under Section 14A.

Indirect tax claims disputed by the Company relating to issues of applicability and classification aggregating

- Service tax other than on rent (Refer note 30 (i))

-

-

- Service tax on rent (Refer note 30 (ii))

16.60

16.60

- VAT/ Sales tax@

5.47

6.16

- Customs Duty#

0.47

0.47

@ The demand is on account of disallowance of VAT set off due to J1-J2 mis-match or GSTR 1 Vs 3B and on account of disallowance of GST Input tax credit on account of mismatch of ITC between GSTR 3B V/s GSTR2AThe Company has filed an appeal for F.Y.15-16 to F.Y.17-18 and matter is still pending before Asst./ Dep.Commissioner Commercial Tax.

# Aggrieved with the decision of custom department for demanding the payment of SAD refund of ''0.42 Crores the Company has filed an appeal before CESTAT. Further, the company has received demand order of ''0.05 Crores on account of misclassification of imported goods. Against the said order the Company has filed an appeal before CESTAT. Both these matters are pending with CESTAT.

b) Other matters

0.25

0.25

c) Bank Guarantees

8.03

7.53

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

ii) Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for

37.22

23.94

b) Corporate guarantee given to bank jointly and severally

-

-

30. Service tax

i) During the year ended March 31, 2022, The Service tax authority has raised demand through SCN amounting to ''3.45 Crores (Basic Duty of ST) towards business support services (concessionaire business model) for the period from May''2006 to May''2007. The final liability after considering the penalty and interest amounting to ''11.20 Crores (deposit paid under protest '' 3.45 Crores). During the year, Company has filed for Sabka Vishwas -(Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) and basis the final order, the matter is concluded without any further liability."

ii) Pursuant to levy of service tax on renting of immovable properties given for commercial use, retrospectively with effect from June 1, 2007, the Company has challenged the said levy and, inter-alia, its retrospective application based on a legal advice. Pending the final disposal of the matter, which is presently before the Supreme Court, the Company continues not to provide for the retrospective levy aggregating ''16.60 Crores out of total demand of ''35.41 Crores for the period June 1, 2007 to March 31, 2010 which has been paid under protest. The Company has made an aggregate deposit of ''35.41 Crores in respect of the liability for such service tax.

31. Exceptional Items :

During the year, the Company has written off ''2 Crores towards ICD receivable from Crossword Bookstores Limited (Crossword) (Previous year - ''15.00 Crores for impairment on loan/investments towards Crossword ) and disclosed as exceptional item in the financial statement. Please also refer note 36.4 to the financial statement.

32. Segment reporting

The Company is primarily engaged in the business of retail trade through retail and departmental store facilities, which in the terms of Ind AS 108 on ''Operating Segments'', constitutes a single reporting segment.

i) The Company operates in a single geographical environment i.e.in India.

ii) No single customer contributed 10% or more to Company''s revenue.

33. Derivatives / Forward foreign exchange contracts

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

There are no outstanding Forward Exchange Contracts entered into by the Company as at March 31, 2023.

34.1 Employee share option plan of the Company

The Company has a share option scheme for certain employees of the Company. In accordance with the terms of the share option scheme, as approved by shareholders at general meeting, employees with a pre-defined grade may be granted options to purchase equity shares. Each share option converts into one equity share of the company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised with in four years from the date of grant, as per vesting schedule.The share options vests based on a pre-determined vesting schedule from the date of grant.

The fair value of the share options is estimated at the grant date using a binomial option pricing model, taking into account the terms and conditions upon which the share options are granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest.

34.6The weighted average contractual life of the options outstanding is 2.07 years

35. Employee Benefits

35.1 Defined contribution plans

The Company operates defined contribution plan (Provident fund) for all qualifying employees of the Company. The employees of the company are members of a retirement contribution plan operated by the government. The Company is required to contribute a specified percentage of payroll cost to the retirement contribution scheme to fund the benefits. The only obligation of the Company with respect to the plan is to make the specified contributions. The Company''s contribution to Provident Fund aggregating ''15.05 Crores (2022: '' 13.05 Crores) has been recognised in the Statement of Profit and Loss under the head Employee Benefits Expense.

I nformation about the contribution to defined contribution plans for key managerial personnel is disclosed in note 37.

35.2 Defined benefit plan

The Company sponsors funded defined benefit (Gratuity) plan for qualifying employees, covered under the Payment of Gratuity Act, 1972. The defined benefit plan is administered by a third-party insurer (Life Insurance Corporation of India). This third-party insurer is responsible for the investment policy with regard to the assets of the plan.

Under the plan, the employees are entitled to a lump-sum amounting to 15 days'' final basic salary for each year of completed service payable at the time of retirement / resignation provided the employee has completed 5 years of continuous service.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation asset recognised in the balance sheet.

There is no change in the method of valuation for the prior periods in preparing the sensitivity analysis. For change in assumptions refer to note 36.2b above.

h) Asset liability matching strategies:

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in an increase in liability without corresponding increase in the asset)."

i) Effect of plan on entity''s future cash flows

a) Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

b) The Company expects to contribute ''4.92 crores to its gratuity plan for the next year.

36.2 W.e.f. J une 23, 2022, the name of Shoppers Stop Services (India) Ltd, the wholly owned subsidary of Shoppers Stop Ltd has been changed to Shoppers Stop Brands (India) Ltd.

36.3 W.e.f. J une 20,2022, the name of Upasna Trading Ltd, the wholly owned subsidary of Shoppers Stop Ltd has been to Global SS Beauty Brands Ltd.

36.4 During the year ended March 31, 2022, In terms of the Share Purchase Agreement executed with Agarwal Book House (ABH) and the board of directors of the Company had accorded their approval for sale of 100% equity shares held by the Company in Crossword Bookstores Ltd (Crossword), a wholly owned subsidiary ( now known as Crossword Bookstores Pvt. Ltd.) to M/s. Dinesh Gupta, Aakash Gupta & Family (Owners of Agarwal Business House, Pune). The business of Crossword was valued at ''41.60 Crs. Under the agreement, ABH will take over all the assets and brand. Any liabilities will be adjusted for arriving at the final consideration.

The Company has completed sale of 51% of investment in Crossword and Crossword ceased to be subsidiary of the Company and remain associate as on March 31,2022.

During the current year, the Company has completed additional sale of 39.00% of investment in Crossword and last tranche of 10% stake sale is expected to be completed by October 31, 2024.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2023, the Company has recorded ''5.00 crores impairment of receivables relating to amounts owed by related parties (March 31,2022: ''6.03 Crores). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

38. Financial Instruments

A. Capital risk management

The Company''s objectives when managing capital are to safeguard continuity as a going concern, provide appropriate return to shareholders and maintain a cost efficient capital structure. The Company determines the amount of capital required on the basis of an annual budget and a five-year plan, including, for working capital, capital investment in stores, technology, and strategic investment in subsidiary companies. The Company''s funding requirements are met through internal accruals and a combination of both long-term and short-term borrowings.

B. Financial risk management

A wide range of risks may affect the Company''s business and operational / financial performance. The risks that could have significant influence on the Company are market risk, credit risk and liquidity risk. The Company''s Board of Directors reviews the short term and long-term budgets and sets out policies for managing these risks and monitors suitable actions taken by management to minimise potential adverse effects of such risks on the Company''s operational and financial performance.

a) Market risk:

Market Risk is the risk that changes in market place could affect the future cash flows to the Company. The market risk for the Company arises primarily from product price risk, interest rate risk and, to some extent, foreign currency risk.

Product price risk: In a potentially inflationary economy, the Company expects periodical price increases across its retail product lines. Product price increases which are not in line with the levels of customers'' discretionary spends, may affect the business/retail sales volumes. In such a scenario, the risk is managed by offering judicious product discounts to retail customers to sustain volumes. The Company negotiates with its vendors for purchase price rebates such that the rebates substantially absorb the product discounts offered to the retail customers. This helps the Company protect itself from significant product margin losses. This mechanism also works in case of a downturn in the retail sector, although overall volumes would get affected.

Interest risk: The Company is exposed to interest rate risk primarily due to borrowings having floating interest rates. The Company uses available working capital limits for availing short term working capital demand loans with interest rates negotiated from time to time so that the Company has an effective mix of fixed and variable rate borrowings. Interest rate sensitivity analysis shows that an increase / decrease of 50 bps in floating interest rates would result in decrease / increase in the Company''s profit before tax by approximately '' 0.09 Crores (2022: ''0.13 Crores).

Currency risk: The Company''s significant transactions are in Indian Rupees and therefore there is minimal foreign currency risk. Generally, the Company fully covers the foreign currency risk for transactions in foreign currency which are primarily for import of merchandise, by entering into forward cover contracts to hedge foreign currency exposure. Also Refer Note 33 for the forward cover contracts outstanding at the end of the reporting period.

b) Credit risk:

Credit risk is a risk that the counterparty will default on its contractual obligation resulting in financial loss to the Company. The credit risk for the Company primarily arises from credit exposures to trade receivables (mainly institutional customers), deposits with landlords for store properties taken on leases and other receivables including balances with banks.

Trade and other receivables: The Company''s retail business is predominantly on ''cash and carry'' basis which is largely through credit card collections. The credit risk on such collections is minimal, since they are primarily owned by customers'' card issuing banks. The Company has adopted a policy of dealing with only credit worthy counterparties in case of institutional customers and the credit risk exposure for institutional customers is managed by the Company by credit worthiness checks. The Company also carries credit risk on lease deposits with landlords for store properties taken on leases, for which agreements are signed and property possessions timely taken for store operations. The risk relating to refunds after store shut down is managed through successful negotiations or appropriate legal actions, where necessary.

The Company''s experience of delinquencies and customer disputes have been minimal. Further, Trade and other receivables consist of a large number of customers, across geographies; hence, the Company is not exposed to concentration risks.

c) Liquidity Risk:

Liquidity risk is a risk that the Company may not be able to meet its financial obligations on a timely basis through its cash and cash equivalents, and funds available by way of committed credit facilities from banks.

Management manages the liquidity risk by monitoring rolling cash flow forecasts and maturity profiles of financial assets and liabilities. This monitoring includes financial ratios and takes into account the accessibility of cash and cash equivalents and additional undrawn financing facilities.

I n respect of financial guarantee contracts, no amounts are recognised based on the results of the liability adequacy test for likely deficiency / defaults by the entities on whose behalf the Company has given guarantees, grounded on the Company''s actual experience.

The Company has access to following fund based financing facilities which were undrawn as at the end of reporting periods mentioned.

Valuation technique and key input used: Fair value is determined using discounted future cash flows, which are estimated at the end of the reporting period, discounted at a rate that reflects the credit risk of the Company.

The fair values of the quoted instruments (Investment in Mutual funds) are based on the price quotations at the reporting date.

39. Events after the reporting period

The Board of Directors has not recommended any dividend for the financial year 2022-23. The Company has evaluated subsequent events from the balance sheet date through April 26, 2023, the date at which the financial statement were available to be issued, and determine that there are no material items to disclose other than those disclosed above.

c. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond statutory period.

d. The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

e. The Company has not advanced or loaned or invested funds to any other persons or entities including the foreign entities ( intermediaries) with the understanding that the intermediary shall :

i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever or on behalf of the Company ( ultimate beneficiaries) or

ii. Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

f. The Company has not received any funds from any persons or entities including the foreign entities ( intermediaries) with the understanding (whether recorded in the writing or not)that the intermediary shall :

i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever or on behalf of the Funding Party ( ultimate beneficiaries) or

ii. Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

g. The Company did not have any transaction which was not recorded in the books of accounts that was surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,1961 (such as search or survey or any other relevant provisions of the Income Tax Act,1961."

h. The Company has a defined process to take daily back-up of books of accounts maintained electroically which is in compliance with the relevant provisions of the Companies ( Accounts) Rules, 2014 (as amended). However, the Company maintains the logs of such backups for a cycle period of 30 to 60 days only and considering the new regulations., the management is taking steps to configure systems to ensure that logs of daily back up for books of accounts is maintained on servers physically located in India to demonstrate compliance with the regulations. "

i. The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) (Amendment) Rules, 2023 on 31st March, 2023 amending:

- Ind AS 1, ''Presentation of Financial Statements'' - The amendments require companies to disclose their material accounting policies rather than their significant accounting policies.

- Ind AS 12 ''Income Taxes'' - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences.

The amendments clarify how companies account for deferred tax on transactions such as leases.

- Ind AS 8 ''Accounting Policies, Changes in Accounting Estimates and Errors'' - This amendment has introduced a definition of ''accounting estimates'' and included amendments to help distinguish changes in accounting policies from changes in accounting estimates. The same are applicable for financial statements pertaining to annual periods beginning on or after 1st April, 2023. The Company expects that there will be no material impact on the financial statements resulting from the implementation of these amendments.

42. Amount appearing as zero "0.00" in financials are below the rounding off norm adopted by the Company.

43. The previous year''s figures have been regrouped / reclassified wherever necessary.


Mar 31, 2022

i) Movable assets have been pledged to secure borrowings of the Company (Refer Note 15)

ii) Depreciation for the year includes accelerated amounts aggregating to ?8.46 crores (2021: ?9.01 crores) primarily in case of Leasehold improvements,electrical installation and software on account of change in estimate of useful lives of property, plant & equipment resulting from store closures/shifting premises.

iii) The Company has not revalued any of its Property, plant and equipments during the year.

iv) All immovable properties of the Company are situated at the properties where the Company is lessee and the lease agreements are duly executed in favour of the lessee.

v) During the year 31 March 2022, the Company has capitalised the following expenses to cost of Property, plant and equipement.

5.1 The above loans are given for general corporate and business purposes. Please refer note 5.3 for terms of repayments,rate of interest and other details. The loans are carried at amortised cost.

5.2 These financial assets have been pledged to secured borrowings of the Company. (Refer Note 15)

5.3 Disclosure as per Regulations 34(3) of the SEBI (Listing obligations and Disclosure Requirements) Regulations,2015 and Section 186 of the Companies Act, 2013.

10.1 Trade receivables are carried at amortised cost.

10.2 These financial assets have been pledged to secure borrowings of the Company. (Refer Note 15)

10.3 No trade or other receivables are due from directors or other office of the Company either severally or jointly with any other persons.

10.4 For terms and conditions relating to related party receivables, Refer Note No. 38.

10.5 Trade receivables are non-interest bearing and are generally on terms of 30 to 120 days.

11.1 These financial assets have been pledged as secure borrowings ( Refer note 15)

11.2 Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.

13.6 Other disclosures:

The Company has one class of equity shares having a par value of ''5 per share. Each equity shareholder is eligible for one vote per share held. Each equity shareholder is entitled to dividends as and when the Company declares and pays dividend after obtaining shareholders'' approval. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

13.7 The Company has issued and allotted 1,41,315 (2021: Nil ) number of shares under Share options schemes to certain employees - Refer Note 34

31 March 2021:

The Board of Directors of the Company on 16 October 2020 approved the offer and issuance of equity shares of the Company by way of rights issue to the shareholders of the Company. The Rights issue Committee of Board of Directors at its meeting held on 17 December 2020, inter alia, considered and approved allotment of 2,13,68,982 Rights Equity Shares of face value ''5 each at a price of ''140 per Rights Equity Share, to the eligible equity shareholders of the Company as on record date for an amount aggregating to ''299.17 crores. Funds received pursuant to allotment are being utilised towards the objects stated in the Letter of Offer.

For addition and deductions under each of the above heads, refer Standalone Statement of changes in equity.

14.1 Securities premium

Securities premium is used to record the premium received on issue of shares. The securies premium can be utilised only in accordance with the provisions of the Companies Act, 2013.

14.2 General reserve

The General Reserve is mainly created/built by the Company from time to time by transfering the profits from retained earnings. This reserve may be utilised mainly to declare dividend as permitted under the Companies Act, 2013.

14.3 Share options outstanding account

Share options outstanding account relates to share options granted by the Company to certain employees under share option plan. Further information about share based payments to employees is set out in Note 34.

15.1 Term Loans are secured by First Pari Passu charge on entire Current Assets including Stocks & Books debts, the entire movable fixed assets, Lease deposit excluding exclusive lien on lease Deposit to the extent of ''26.62 crores by Axis Bank Ltd., Escrow Account of debit card and credit card receivables.

Note 1

Amount reported in Quarterly return is higher than amount as per financial statements since Gross Retail sale of merchandise (excluding Goods & Service Tax) is reported in Quarterly return whereas Retail sale of merchandise after Goods and Service tax is disclosed in financial statements.

Note 2

Amount reported in Quarterly return is higher than amount as per financial statements since non-current portion of lease deposits, ICD''s given to subsidiary and other non-current assets such as capital advances, service tax deposit under protest and income tax (net of provision) which are classified as non- current as per financial statements is reported as current asset in Quarterly return.

15.A1 Loans are secured by a first pari passu charge on stock,book debts, hypothecation charge on credit card/debit card receivables (Escrow account) and all the movable fixed assets of the Company, both present & future except ICIG Bank loan which is secured by first pari passu charge on the current assets and all the movable fixed assets of the Company both present & future excluding leasehold rights,lease deposits & Shoppers Stop brands.

27. Ind AS 116 Leases was notified by MCA on 30 March 2019 and it replaces Ind AS 17 Leases, including appendices

thereto. Ind AS 116 is effective for annual periods beginning on or after 1 April 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees - leases of ''low-value'' assets (e.g. personal computers) and short-term leases (i.e. leases with a lease term of 12 months or less).

27.3 COVID-19-Related Rent Concessions:

As described in Note 2.2.III, the Ministry of Corporate Affairs vide notification dated 24 July 2020 and 18 June 2021 issued an amendment to Ind AS 116 - Leases, by inserting a practical expedient w.r.t. " COVID-19 Related Rent Concessions” effective ftrom the period beginning on or after 1 April 2020.

Many lessors have provided rent concessions to the Company as a result of the COVID-19 pandemic. Rent concession include rent holidays or rent reductions for a period of time. The amendment is to provide lessees that have been granted COVID-19 related rent concessions with practical relief, while still providing useful information about leases to users of the financial statements.

As a practical expedient, the Company elected not to assess a COVID-19 related rent concession from a lessor is a lease modification. and change in lease payments resulting from the COVID-19 related rent concession the same way it would account for the change under Ind AS 116, if the change were not a lease modification. The practical expedient applies only to rent concessions occurring as a direct consequence of the COVID-19 pandemic.

The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Company''s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised.

28. EARNING PER EQUITY SHARE

Basic EPS amounts are calculated by dividing the loss for the year attributable to equity holders of the Company by weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the loss attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

29. CONTINGENT LIABILITIES AND COMMITMENTS:

i) Contingent liabilities

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

Income tax claims disputed by the Company relating to disallowances aggregating *

249.39

226.12

* 2022: As of 31 March 2022, the Company had outstanding demands amounting to ''247.74 crores w.r.t. to TDS Disallowances and amounting to ''1.65 crores w.r.t. notional interest and disallowances under Section 14A.

Update in FY 2021-22: The department has gone into appeal with ITAT against the favourable order from CIT (A) for AY 2012-13 amount to ''23.41 crores, the same was on account of non-deduction on TDS on contract manufacturing goods. The assessing officer has also passed an demand order of ''1.65 crores by disallowing notional interest and Section 14A against which the Company has filed appeal with CIT(A).

Further, during the year, the Company has received the favourable block assessment order for ''1.79 crores from AY 2012-13 to AY 2018-19 and the assessing officer has passed order giving effect in all these orders and refunds are accounted in the books.

* 2021: As of 31 March 2021, the Company had outstanding demands amounting to ''224.33 crores w.r.t. to TDS Disallowances and amounting to ''1.79 crores w.r.t. Disallowances under Section 14A.

Update in FY 2020-21: The IT department has passed order directing the Company to pay tax w.r.t. TDS for AY 2014-15, AY 2015-16 & AY 2016-17 amounting to ''112.17 crores on account of non-deduction on contract manufacturing goods in line with earlier years. The Company has filed appeals for all years before the higher authorities.

The Company has received favourable order from CIT(A) for AY 2012-13 for ''23.41 crores on the same matter and hence, The Company is confident of getting relief for all the other years viz. AY 2013-14 to AY 2018-19 hence no provision on the same has been made and the same is disclosed under contingent liabilities as on 31 March 2021.

Further, the Company has also filed an appeals to higher authorities against disallowances of Section 14A and other matters amounting to ''1.79 crores. The Company has received favourable order for AY 2014-15 for ''3.18 crores towards disallowances of Section 14A. Further, the Company had filed VSV for AY 2009-10 towards penalty on service tax and AY 2011-12 towards other matters aggregating to ''2.06 crores and has achieved certainty.

Indirect tax claims disputed by the Company relating to issues of applicability and classification aggregating

- Service tax other than on rent (Refer Note 30 (i))

-

-

- Service tax on rent (Refer Note 30 (ii))

16.60

16.60

- VAT/Sales tax @

6.16

5.37

- Customs Duty #

0.47

0.47

@ The demand is on account of disallowance of VAT set off due to J1-J2 mis-match or GSTR 1 Vs 3B and on account of disallowance of GST Input tax credit on account of mis-match of ITC between GSTR 3B V/s GSTR2AThe Company has filed an appeal for FY 2015-16 to FY 2017-18 and matter is still pending before Asst./Dep. Commissioner Commercial Tax.

# Aggrieved with the decision of custom department for demanding the payment of SAD refund of ''0.42 crores the Company has filed an appeal before CESTAT. Futher, the Company has received demand order of ''0.05 crores on account of misclassification of imported goods. Against the said order the Company has filed an appeal before CESTAT. Both these matters are pending with CESTAT.

b) Other matters

0.25

0.25

c) Bank Guarantees

7.53

8.71

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

(All amounts in '' crores)

31 March 2022

31 March 2021

ii) Commitments

a)

Estimated amount of contracts remaining to be executred on capital account and not provided for

23.94

7.52

b)

Corporate guarantee given to bank jointly and severally:

- Shoppers Stop Limited has given the corporate guarantee for loans taken by Crossword Bookstores Ltd. ''18.40 crores and the said loan is repaid back by Crossword Bookstores Ltd. during the period (2021: Crossword Bookstores Ltd. ''18.40 crores)

18.40

30. SERVICE TAX

i) The Service tax authority has raised demand through SCN amounting to ''3.45 crores (Basis Duty of ST) towards business support services (concessionaire business model) for the period from May''2006 to May''2007. The final liability after considering the penalty and interest amounting to ''11.20 crores (deposit paid under protest ''3.45 crores). The Company has filed an appeal before Mumbai High Court. The Company subsequently filed for Sabka Vishwas - (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) and basis the final order, the matter is concluded without any further liability.

"ii) Pursuant to levy of service tax on renting of immovable properties given for commercial use, retrospectively with effect from 1 June 2007, the Company has challenged the said levy and, inter alia, its retrospective application based on a legal advice. Pending the final disposal of the matter, which is presently before the Supreme Court, the Company continues not to provide for the retrospective levy aggregating ''16.60 crores out of total demand of ''35.41 crores for the period 1 June 2007 to 31 March 2010 which has been paid under protest. The Company has made an aggregate deposit of ''35.41 crores in respect of the liability for such service tax.

31. EXCEPTIONAL ITEMS:

During the year, the Company has recorded provision of ''15.00 crores (Previous year - ''22.40 crores) for impairment on

loan/investments towards Crossword Bookstores Limited and disclosed as exceptional item in the financial statement.

Please also refer note 36.2 to the financial statement.

32. SEGMENT REPORTING

The Company is primarily engaged in the business of retail trade through retail and departmental store facilities, which

in the terms of Ind AS 108 on ''Operating Segments'', constitutes a single reporting segment.

i) The Company operates in a single geographical environment i.e. in india.

ii) No single customer contributed 10% or more to Company''s revenue.

33. DERIVATIVES / FORWARD FOREIGN EXCHANGE CONTRACTS

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

There are no outstanding Forward Exchange Contracts entered into by the Company as at 31 March 2022.

b) Unhedged Foreign Currency exposure

The following are the foreign currency exposures that have not been hedged by a derivative instrument or otherwise at the end of the year.

34.1 Employee share option plan of the Company

The Company has a share option scheme for certain employees of the Company and its subsidiaries. In accordance with the terms of the share option scheme, as approved by shareholders at general meeting, employees with a pre-defined grade may be granted options to purchase equity shares. Each share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised with in four years from the date of grant, as per vesting schedule. The share options vests based on a pre-determined vesting schedule from the date of grant.

The fair value of the share options is estimated at the grant date using a binomial option pricing model, taking into account the terms and conditions upon which the share options are granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest.

The Contractual term of each option granted is three years. There are no cash settlement alternatives. The Company does not have a past practice of cash settlement for these share options.

All options vested based on the pre determined vesting schedule (i.e. three years) from the date of grant and expire after 12 months from the last date of vesting schedule, six months from the date of retirement or twelve months after the resignation of the employee, whichever is the earlier.

34.6 The weighted average contractual life of the options outstanding is 3.59 years.

35. EMPLOYEE BENEFITS35.1 Defined contribution plans

The Company operates defined contribution plan (Provident fund) for all qualifying employees of the Company. The employees of the Company are members of a retirement contribution plan operated by the government. The Company is required to contribute a specified percentage of payroll cost to the retirement contribution scheme to fund the benefits. The only obligation of the Company with respect to the plan is to make the specified contributions.

The Company''s contribution to Provident Fund aggregating ''13.05 crores (2021: ''13.56 crores) has been recognised in the Statement of Profit and Loss under the head Employee Benefits Expense.

Information about the contributions to defined contribution plans for key managerial personnel is disclosed in note 38.

35.2 Defined benefit plan

The Company sponsors funded defined benefit (Gratuity) plan for qualifying employees, covered under the Payment of Gratuity Act, 1972. The defined benefit plan is administered by a third-party insurer (Life Insurance Corporation of India). This third-party insurer is responsible for the investment policy with regard to the assets of the plan.

Under the plan, the employees are entitled to a lump-sum amounting to 15 days'' final basic salary for each year of completed service payable at the time of retirement/resignation provided the employee has completed 5 years of continuous service.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation asset recognised in the balance sheet.

There in no change in the method of valuation for the prior periods in preparing the sensitivity analysis. For change in assumptions refer to note 36.2b above.

h) Asset liability matching strategies:

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset).

i) Effect of plan on entity''s future cash flows

a) Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company."

b) The Company expects to contribute ''3.34 crores to its gratuity plan for the next year.

36.2 The Board of Directors at their meeting held on 31 August 2021 have accorded their approval for sale of 100% equity shares in four tranches, held by the Company in Crossword Bookstores Ltd. (Crossword) at a business value of ''41.6 crores (''5crores against equity and balance towards discharge of liabilities) in accordance with Share Purchase Agreement.

On 11 October 2021, the Company has completed sale of 51% of investment in Crossword and there is no profit/ loss on sale of this investment. Accordingly, Crossword ceased to be a subsidiary of the Company and became associate thereon.

Balance two tranches aggregating 39% of stake sale is expected to be completed by 31 August 2022 and has been disclosed as asset held for disposal. Last tranche of 10% stake sale is expected to be completed by 31 August 2024.

37. UTILISATION OF RIGHT ISSUE PROCEEDS 31 March 2021:-

In financial year 2020-21, the Company has allotted 2,13,68,982 Rights Equity Shares of face value ''5 each at a price of ''140 per Rights Equity Share, to the eligible equity shareholders of the Company as on record date for an amount aggregating to ''299.17 crores.

The Company has given corporate guarantee to banks for loans taken by subsidiaries - Refer Note 29(ii)(b).

The figure in bracket pertain to previous year.

* These parties are not related to Shoppers Stop Ltd. per Ind AS 24 definition. These parties have been reported on the basis of their classification as related party under the Companies Act, 2013.

** Post employment benefits have been provided at gross level on totality basis and not available at individual employee level.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2022, the Company has recorded ''6.03 crores impairment of receivables relating to amounts owed by related parties (31 March 2021: '' Nil ). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

39. FINANCIAL INSTRUMENTS A. Capital risk management

The Company''s objectives when managing capital are to safeguard continuity as a going concern, provide appropriate return to shareholders and maintain a cost efficient capital structure. The Company determines the amount of capital required on the basis of an annual budget and a five-year plan, including, for working capital, capital investment in stores, technology, and strategic investment in subsidiary companies. The Company''s funding requirements are met through internal accruals and a combination of both long-term and short-term borrowings. Majorly Company raise long-term loan for it''s CAPEX requirement and based on the working capital requirement utilise the working capital loans.

B. Financial risk management

A wide range of risks may affect the Company''s business and operational/financial performance. The risks that could have significant influence on the Company are market risk, credit risk and liquidity risk. The Company''s Board of Directors reviews the short-term and long-term budgets and sets out policies for managing these risks and monitors suitable actions taken by management to mi nimise potential adverse effects of such risks on the Company''s operational and financial performance.

a) Market risk:

Market Risk is the risk that changes in market place could affect the future cash flows to the Company. The market risk for the Company arises primarily from product price risk, interest rate risk and, to some extent, foreign currency risk.

Product price risk: In a potentially inflationary economy, the Company expects periodical price increases across its retail product lines. Product price increases which are not in line with the levels of customers'' discretionary spends, may affect the business/retail sales volumes. In such a scenario, the risk is managed by offering judicious product discounts to retail customers to sustain volumes. The Company negotiates with its vendors for purchase price rebates such that the rebates substantially absorb the product discounts offered to the retail customers. This helps the Company protect itself from significant product margin losses. This mechanism also works in case of a downturn in the retail sector, although overall volumes would get affected.

Interest risk: The Company is exposed to interest rate risk primarily due to borrowings having floating interest rates. The Company uses available working capital limits for availing short-term working capital demand loans with interest rates negotiated from time to time so that the Company has an effective mix of fixed and variable rate borrowings. Interest rate sensitivity analysis shows that an increase/decrease of fifty basis points in floating interest rates would result in decrease/increase in the Company''s profit before tax by approximately ''0.13 crores (2021: ''0.41 crores).

Currency risk: The Company''s significant transactions are in Indian Rupees and therefore there is minimal foreign currency risk. Generally, the Company fully covers the foreign currency risk for transactions in foreign currency which are primarily for import of merchandise, by entering into forward cover contracts to hedge foreign currency exposure. Also Refer Note 33 for the forward cover contracts outstanding at the end of the reporting period.

b) Credit risk:

Credit risk is a risk that the counterparty will default on its contractual obligation resulting in financial loss to the Company. The credit risk for the Company primarily arises from credit exposures to trade receivables (mainly institutional customers), deposits with landlords for store properties taken on leases and other receivables including balances with banks.

Trade and other receivables: The Company''s retail business is predominantly on ''cash and carry'' basis which is largely through credit card collections. The credit risk on such collections is minimal, since they are primarily owned by customers'' card issuing banks. The Company has adopted a policy of dealing with only credit worthy counterparties in case of institutional customers and the credit risk exposure for institutional customers is managed by the Company by credit worthiness checks. The Company also carries credit risk on lease deposits with landlords for store properties taken on leases, for which agreements are signed and property possessions timely taken for store operations. The risk relating to refunds after store shut down is managed through successful negotiations or appropriate legal actions, where necessary.

The Company''s experience of delinquencies and customer disputes have been minimal. Further, Trade and other receivables consist of a large number of customers, across geographies; hence, the Company is not exposed to concentration risks.

c) Liquidity Risk:

Liquidity risk is a risk that the Company may not be able to meet its financial obligations on a timely basis through its cash and cash equivalents, and funds available by way of committed credit facilities from banks.

Management manages the liquidity risk by monitoring rolling cash flow forecasts and maturity profiles of financial assets and liabilities. This monitoring includes financial ratios and takes into account the accessibility of cash and cash equivalents and additional undrawn financing facilities.

The table below summarises the maturity profile (remaining period of contractual maturity at the balance sheet date) of the Company''s financial liabilities based on contractual undiscounted cash flows.

The fair values of the quoted instruments (Investment in Mutual funds-Level 2) are based on the price quotations at the reporting date.

40. EVENTS AFTER THE REPORTING PERIOD

The Company has evaluated subsequent events from the balance sheet date through 28 April 2022, the date at which the financial statements were available to be issued, and determined that there are no material items to disclose other than those disclosed above.

c) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond statutory period.

d) The Company has not traded or invested in Crypto currency or virtual currency during the financial year.

e) The Company has not advanced or loaned or invested funds to any other persons or entities including the foreign entities ( intermediaries) with the understanding that the intermediary shall:

i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever or on behalf of the Company ( ultimate beneficiaries) or

ii. Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

f) The Company has not received any funds from any persons or entities including the foreign entities ( intermediaries) with the understanding (whether recorded in the writing or not)that the intermediary shall:

i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever or on behalf of the Funding Party ( ultimate beneficiaries) or

ii. Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.

g) The Company did not have any transaction which was not recorded in the books of account that was surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 such as search or survey or any other relevant provisions of the Income Tax Act, 1961.

43. Amount appearing as zero "0.00" in financials are below the rounding off norm adopted by the Company.

44. The previous year''s figures have been regrouped/reclassified wherever necessary.


Mar 31, 2018

1. GENERAL BACKGROUND

Shoppers Stop Limited (‘SSL’ or ‘the Company’) is a Company limited by shares and is domiciled in India. The Company was incorporated on 16 June 1997. The Company’s registered office is at Umang Tower, 5th Floor, Mindspace, Off Link Road, Malad (West) Mumbai - 400 064, Maharashtra, India.

The Company is engaged in the business of retailing a variety of household and consumer products through departmental stores. At 31 March 2018, the Company operated through 83 such departmental stores located in different cities of India.

The financial statements were approved for issue by the board of directors on 27 April 2018.

2.A CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

The preparation of the financial statements requires management to make Judgements, estimates and assumptions about the reported amounts of assets and liabilities, and income and expenses that are not readily apparent from other sources. Such judgements, estimates and associated assumptions are evaluated based on historical experience and various other factors, including estimation of the effects of uncertain future events, which are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The following are the critical judgements and estimations that have been made by the management in the process of applying the Company’s accounting policies and that have the most significant effect on the amount recognised in the financial statements and/or key sources of estimation uncertainty that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Impairment of equity investment in a subsidiary Company

The accumulated losses of a subsidiary Company viz. Crossword Bookstores Ltd. (‘Crossword’), have eroded its net worth. Crossword is taking ongoing steps to revamp its business operations, including store right sizing and brand positioning.

Based on its future business plans and strategic growth projections, the Company has determined that no impairment is required at this stage. Further, the Company has historically also given guarantees to banks for loans taken by Crossword. Till date, the Company has had no cash outflows against such guarantees and therefore no provision has been considered necessary.

Income Tax

As stated in Note 26, tax expense is calculated using applicable tax rates and tax laws that have been enacted or substantively enacted. In arriving at taxable profit and tax bases of assets and liabilities the Company adjudges taxability of amounts in accordance with tax enactments, case law and opinions of tax counsel, as relevant. Where differences arise on tax assessment, these are booked in the period in which they are agreed or on final closure of assessment.

Useful lives of property, plant and equipment and, intangible assets

The Company reviews the estimated useful lives of property, plant and equipment and intangible assets at the end of each reporting period. During financial years ended 31 March 2018, there were no changes in useful lives of property plant and equipment and intangible assets other than those resulting from store closures / shifting of premises.

The Company at the end of each reporting period, based on external and internal sources of information, assesses indicators and mitigating factors of whether a store (cash generating unit) may have suffered an impairment loss. If it is determined that an impairment loss has been suffered, it is recognised in profit or loss.

Point award schemes

Customer award credits having a predetermined life are granted to customers when they make purchases. The fair value of the consideration on sale of goods resulting in such award credits is allocated between the goods supplied and the award credits granted. The consideration allocated to the award credits is measured by reference to fair value from the standpoint of the holder and revenue is deferred. The Company at the end of each reporting period estimates the number of points redeemed and that it expects will be further redeemed, based on empirical data of redemption / lapses, and revenue is accordingly recognised.

Service tax on renting of immovable properties given for commercial use

As stated in Note 30, the Company has challenged the retrospective levy of service tax on renting of immovable properties given for commercial use and pending the final disposal of the matter, which is presently before the Supreme Court, the Company continues not to provide for the retrospective levy.

Inventories

An inventory provision is recognised for cases where the realisable value is estimated to be lower than the inventory carrying value. The inventory provision is estimated taking into account various factors, including prevailing sales prices of inventory item, the seasonality of the item’s sales profile and losses associated with obsolete/slow-moving inventory items.

Employee Benefits

Provision for employee benefits in the nature of gratuity and unpaid leave balance is estimated on actuarial basis using a number of assumptions which include assumptions for discount rate, future salary increases, mortality rates, attrition rates for employees, return on planned assets etc. Any changes in these assumptions will impact the carrying amount of these provisions. Key assumptions are disclosed in Note 36.

3.1 Trade receivables are carried at amortised cost.

3.2 These financial assets have been pledged to secure borrowings of the Company (Refer note 15).

3.3 No trade or other receivables are due from directors or other officials of the Company either severally or jointly with any other persons.

3.4 For terms and conditions relating to related party receivables, Refer Note No. 38.

3.5 Trade receivables are non-interest bearing and are generally on terms of 30 to 120 days.

4.1 These financial assets have been pledged to secure borrowings (Refer note 15).

4.2 Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.

4.3 For the purpose of Statement of cash flow,Cash and cash equivalents comprise the followings :

5.1 The Company has one class of equity shares having a par value of Rs. 5 per share. Each equity shareholder is eligible for one vote per share held. Each equity shareholder is entitled to dividends as and when the Company declares and pays dividend after obtaining shareholders’ approval. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

5.2 The Board of Directors and the shareholders of the Company at their meetings held on 23 September 2017 and 18 October 2017 respectively have approved issue of 43,95,925 equity shares of Rs. 5 each at an issue price of Rs. 407.78 per equity share to Amazon.com NV Investment Holdings LLC, on a preferential basis. On 12 January 2018, the Company has allotted these equity shares, which are pari passu in all respect.

The Company has issued and allotted 60,020 number of shares under Share options schemes to certain employees-Refer Note 35.

For addition and deductions under each of the above heads see Statement of changes in equity.

6.1 Securities premium reserve

Securities premium reserve is used to record the premium received on issue of shares. The securities premium can be utilised only in accordance with the provisions of the Companies Act 2013.

6.2 General reserve

The General Reserve is mainly created/built by the Company from time to time by transferring the profits from retained earnings. This reserve may be utilised mainly to declare dividend as permitted under the Companies Act 2013.

6.3 Share options outstanding account

Share options outstanding account relates to share options granted by the Company to certain employees under share option plan. Further information about share based payments to employees is set out in Note 35.

7.1 Term Loans are secured by a first pari passu charge on stock,book debts, hypothecation charge on credit card/debit card receivables (Escrow account) and all the movable fixed assets of the Company, both present & future except ICICI Bank Term loans which is secured by 1 pari passu charge on the current assets and all the movable fixed assets of the Company both present and future excluding leasehold rights, lease deposits and Shoppers Stop brands.

7A.1 Secured Loans are secured by a first pari passu charge on stock,book debts, hypothecation charge on credit card/ debit card receivables (Escrow account) and all the movable fixed assets of the Company, both present & future except ICICI Bank loan which is secured by first pari passu charge on the current assets and all the movable fixed assets of the Company both present & future excluding leasehold rights, lease deposits & Shoppers Stop brands.

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

9. Earning Per Equity Share

Basic EPS amounts are calculated by dividing the profit / (loss) for the year attributable to equity holders of the Company by weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit / (loss) attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

10. Service tax

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

11. Exceptional Items:

i) During the year, In terms of the Share Purchase Agreement executed with Future Retail Limited and approval accorded by the members through postal ballot, the Company disposed of 77,158,778 equity shares of Rs. 10/- each constituting 51.09% of the share capital of Hypercity Retail (India) Ltd.; its material subsidiary to Future Retail Limited on 30 November 2017. Accordingly, Hypercity ceases to be subsidiary of the Company. 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. Accordingly, the Company has recorded a net loss of Rs. 4,886.75 lacs in the current financial year which has been disclosed as an exceptional item. (31 March 2017 impairment loss of Rs. 3,600 lacs).

ii) During the year, the Company has disposed off its 40% shareholding in Nuance Group (India) Pvt. Ltd (NGIPL) to The Nuance Group AG, Switzerland, at a consideration of Rs. 600 lacs on 6 October 2017. With the disposal of this shareholding, the Shareholders Agreement executed with them, stands terminated and accordingly, NGIPL ceases to be an associate Company of the Company.Accordingly, the Company has recorded a net gain of Rs. 20 lacs in the current financial year which has been disclosed as an exceptional item. (31 March 2017 impairment of Rs. 1,180 lacs).

iii) During the year, the Company has disposed off its 48.42% shareholding in Timezone Entertainment Private Ltd. (TEPL) to Timezone West Asia Pte. Ltd., at a consideration of Rs. 2,270.40 lacs on 15 February 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. Accordingly, the Company has recorded a net loss of Rs. 174.21 lacs in the current financial year which has been disclosed as an exceptional item.

12. Segment Reporting

The Company is primarily engaged in the business of retail trade through retail and departmental store facilities, which in the terms of Ind AS 108 on ‘Operating Segments’, constitutes a single reporting segment.

i) The Company operates in a single geographical environment i.e. in india.

ii) No single customer contributed 10% or more to Company’s revenue.

13. Dividends

The Board of Directos has recommended dividend of Rs. 0.75 per share of Rs. 5 each for the financial year 2017-18. The payment is subject to the approval of members at the annual general meeting.

14. Derivatives/Forward Foreign Exchange Contracts

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

It is the policy of the Company to enter into forward foreign exchange contracts to cover specific foreign currency payments and receipts. The Company also enters into forward foreign exchange contracts to manage the risk associated with anticipated sales and purchase transactions out of 6 months within 40% to 50% of the exposure generated.

Adjustments are made to the initial carrying amounts of non-financial hedged items when the anticipated sale or purchase transaction takes place.

The following are the outstanding Forward Exchange Contracts entered into by the Company as at 31 March 2018.

b) Unhedged Foreign Currency exposure

There are no foreign currency exposures that have not been hedged by a derivative instrument or otherwise at the end of the year.

15. Share-Based Payments

The expense recognised for employee services received during the year is shown in the following table:

15.1 Employee share option plan of the Company

The Company has a share option scheme for certain employees of the Company and its subsidiaries. In accordance with the terms of the share option scheme, as approved by shareholders at a previous general meeting, employees with a pre-defined grade and having more than five years of service may be granted options to purchase equity shares. Each share option converts into one equity share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised with in four years from the date of grant, as per vesting schedule.The share options vests based on a pre-determined vesting schedule from the date of grant.

The fair value of the share options is estimated at the grant date using a binomial option pricing model, taking into account the terms and conditions upon which the share options are granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest.

The Contractual term of each option granted is three years. There are no cash settlement alternatives. The Company does not have a past practice of cash settlement for these share options.

All options vested based on the pre determined vesting schedule (i.e. three years) from the date of grant and expire after 12 months from the last date of vesting schedule, six months from the date of retirement or twelve months after the resignation of the employee, whichever is the earlier.

15.2 Fair value of share options granted in the year

There are no new grants during the F.Y. 2017-18.

15.3 Movements in share options during the year

Of the above outstanding share options, 49,919 (2017: 1,69,757) shares are exercisable at the end of the respective reporting periods.

Details of year wise grant and exercise:

15.4 Share options exercise during the year

The following share options were exercised during the year

15.5 The weighted average contractual life of the options outstanding is 3.08 years.

16. Employee Benefits

16.1 Defined contribution plans

The Company operates defined contribution plan (Provident fund) for all qualifying employees of the Company. The employees of the Company are members of a retirement contribution plan operated by the government. The Company is required to contribute a specified percentage of payroll cost to the retirement contribution scheme to fund the benefits. The only obligation of the Company with respect to the plan is to make the specified contributions.

The Company’s contribution to Provident Fund aggregating Rs. 1,158.15 Lacs (2017: Rs. 1,111.81 Lacs) has been recognised in the Statement of Profit and Loss under the head Employee Benefits Expense. Information about the contributions to defined contribution plans for key managerial personnel is disclosed in note 38.

16.2 Defined benefit plan

The Company sponsors funded defined benefit (Gratuity) plan for qualifying employees, covered under the Payment of Gratuity Act, 1972. The defined benefit plan is administered by a third-party insurer (Life Insurance Corporation of India). This third-party insurer is responsible for the investment policy with regard to the assets of the plan.

Under the plan, the employees are entitled to a lump-sum amounting to 15 days’ final basic salary for each year of completed service payable at the time of retirement/resignation provided the employee has completed 5 years of continuous service.

g) Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase, attrition rate and mortality. The sensitivity analysis below have been determined based on reasonable possible changes of the assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is as follows:

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation asset recognised in the balance sheet.

There in no change in the method of valuation for the prior periods in preparing the sensitivity analysis. For change in assumptions refer to note 36.2b above.

h) Asset liability matching strategies:

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset).”

i) Effect of plan on entity’s future cash flows.

a) Every year, the insurance Company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

b) The Company expects to contribute Rs. 380.03 lacs to its gratuity plan for the next year.

c) Weighted average duration of the defined benefit obligation is 6 years (based on discounted cashflows).

17.1 The Company has given corporate guarantee to banks for loans taken by subsidiaries - Refer Note 29 (ii) (b).

17.2 Interest In Joint Ventures:

The Company’s interests, as a venturer, in a jointly controlled entities are as follows:

The Company has given corporate guarantee to banks for loans taken by subsidiaries - Refer Note 29(ii)(b)

The figure in bracket pertain to previous year.

* These parties are not related to Shoppers Stop Ltd. per Ind AS 24 definition. These parties have been reported on the basis of their classification as related party under the Companies Act 2013.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2017: ‘ Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

18. Financial Instruments

A. Capital risk management

The Company’s objectives when managing capital are to safeguard continuity as a going concern, provide appropriate return to shareholders and maintain a cost efficient capital structure. The Company determines the amount of capital required on the basis of an annual budget and a five year plan, including, for working capital, capital investment in stores, technology, and strategic investment in subsidiary companies. The Company’s funding requirements are met through internal accruals and a combination of both long-term and short-term borrowings. Majorly Company raise long term loan for it’s CAPEX requirement and based on the working capital requirement utilise the working capital loans.

The Company monitors capital on the basis of total debt to total equity on a periodic basis. The following table summarises the capital of the Company:

B. Financial risk management

A wide range of risks may affect the Company’s business and operational / financial performance. The risks that could have significant influence on the Company are market risk, credit risk and liquidity risk. The Company’s Board of Directors reviews the short term and long term budgets and sets out policies for managing these risks and monitors suitable actions taken by management to minimise potential adverse effects of such risks on the Company’s operational and financial performance.

(a) Market risk:

Market Risk is the risk that changes in market place could affect the future cash flows to the Company. The market risk for the Company arises primarily from product price risk, interest rate risk and, to some extent, foreign currency risk.

Product price risk: In a potentially inflationary economy, the Company expects periodical price increases across its retail product lines. Product price increases which are not in line with the levels of customers’ discretionary spends, may affect the business / retail sales volumes. In such a scenario, the risk is managed by offering judicious product discounts to retail customers to sustain volumes. The Company negotiates with its vendors for purchase price rebates such that the rebates substantially absorb the product discounts offered to the retail customers. This helps the Company protect itself from significant product margin losses. This mechanism also works in case of a downturn in the retail sector, although overall volumes would get affected.

Interest risk: The Company is exposed to interest rate risk primarily due to borrowings having floating interest rates. The Company uses available working capital limits for availing short-term working capital demand loans with interest rates negotiated from time to time so that the Company has an effective mix of fixed and variable rate borrowings. Interest rate sensitivity analysis shows that an increase / decrease of fifty basis points in floating interest rates would result in decrease / increase in the Company’s profit before tax by approximately Rs. 188 lacs (2017: Rs. 283 lacs).

Currency risk: The Company’s significant transactions are in Indian Rupees and therefore there is minimal foreign currency risk. Generally, the Company fully covers the foreign currency risk for transactions in foreign currency which are primarily for import of merchandise, by entering into forward cover contracts to hedge foreign currency exposure. Also Refer Note 34 for the forward cover contracts outstanding at the end of the reporting period.

(b) Credit risk:

Credit risk is a risk that the counterparty will default on its contractual obligation resulting in financial loss to the Company. The credit risk for the Company primarily arises from credit exposures to trade receivables (mainly institutional customers), deposits with landlords for store properties taken on leases and other receivables including balances with banks.

Trade and other receivables: The Company’s retail business is predominantly on ‘cash and carry’ basis which is largely through credit card collections. The credit risk on such collections is minimal, since they are primarily owned by customers’ card issuing banks. The Company has adopted a policy of dealing with only credit worthy counterparties in case of institutional customers and the credit risk exposure for institutional customers is managed by the Company by credit worthiness checks. The Company also carries credit risk on lease deposits with landlords for store properties taken on leases, for which agreements are signed and property possessions timely taken for store operations. The risk relating to refunds after store shut down is managed through successful negotiations or appropriate legal actions, where necessary.

The Company’s experience of delinquencies and customer disputes have been minimal. Further, Trade and other receivables consist of a large number of customers, across geographies, hence, the Company is not exposed to concentration risks.

In respect of financial guarantee contracts, no amounts are recognised based on the results of the liability adequacy test for likely deficiency / defaults by the entities on whose behalf the Company has given guarantees, grounded on the Company’s actual experience.

Liquidity risk is a risk that the Company may not be able to meet its financial obligations on a timely basis through its cash and cash equivalents, and funds available by way of committed credit facilities from banks.

Management manages the liquidity risk by monitoring rolling cash flow forecasts and maturity profiles of financial assets and liabilities. This monitoring includes financial ratios and takes into account the accessibility of cash and cash equivalents and additional undrawn financing facilities.

The table below summarises the maturity profile (remaining period of contractual maturity at the balance sheet date) of the Company’s financial liabilities based on contractual undiscounted cash flows.

The Company has access to following financing facilities which were undrawn as at the end of reporting periods mentioned.

Valuation technique and key input used: Fair value is determined using discounted future cash flows which are estimated based on forward exchange rates at the end of the reporting period, discounted at a rate that reflects the credit risk of the Company.

The fair values of the quoted instruments (Investment in Mutual funds and Future Retail Limited) are based on the price quotations at the reporting date.

19. STANDARDS ISSUED BUT NOT YET EFFECTIVE

IND-AS 115 was notified on 28 March 2018 and is effective for the Company in the first quarter of fiscal 2019. The Company has established an implementation team to implement IND-AS 115 related to the recognition of revenue from contracts with customers and it continues to evaluate the changes to accounting system and processes and additional disclosure requirements that may be necessary. A reliable estimates of the quantitative impact of IND-AS 115 on the financial statements will only be possible once the implementation project has been completed.

20. The previous year figures have been audited by an audit firm other than S R B C & Co LLP. The previous year’s figures have been regrouped / reclassified wherever necessary.


Mar 31, 2017

1. SERVICE TAX

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

2. EQUITY INVESTMENT IN HYPERCITY RETAIL (INDIA) LIMITED (''HYPERCITY'')

The accumulated losses of Hypercity Retail (India) Limited, a subsidiary company, amounting to Rs, 71,177.58 lacs at 31 March 2017 (2016: Rs, 62,703.95 lacs, 2015: Rs, 53,961.56 Lacs) have substantially eroded its net worth. While Hypercity continues to take steps to revamp its business operations, (including store right sizing, and brand positioning), the gestation period to achieve the desired level of turnaround is taking longer than previously envisaged. Based on a business valuation, after considering the aforesaid, the Company has recognized an impairment of Rs, 3,600 lacs for diminution in value of the investment. Based on its future business plans and strategic growth projections, the Company has determined that no further impairment is required at this stage.

3. SEGMENT REPORTING

The Company is primarily engaged in the business of retail trade through its retail and departmental store facilities, which in the terms of Ind AS 108 on ''Operating Segments'', constitute a single reporting segment. The Company operates in a single geographical environment i.e in India

4. DIVIDENDS

The Board of Directors have recommended dividend of '' 0.75 per share of '' 5 each for the financial year 2016-17 from its retained earnings. The payment is subject to the approval of shareholder in its ensuing annual general meeting.

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5. DERIVATIVES / FORWARD FOREIGN EXCHANGE CONTRACTS

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

Adjustments are made to the initial carrying amounts of non-financial hedged items when the anticipated sale or purchase transaction takes place.

b) Unhedged Foreign Currency exposure

There are no foreign currency exposures that have not been hedged by a derivative instrument or otherwise at the end of the year.

6. SHARE-BASED PAYMENTS

7 Employee share option plan of the Company

The Company has a share option scheme for certain employees of the Company and its subsidiaries. In accordance with the terms of the share option scheme, as approved by shareholders at a previous general meeting, employees with a pre-defined grade and having more than five years of service (for Hypercity employees, the same is three years) may be granted options to purchase equity shares. Each share option converts into one equity share of the company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry. The share options vests based on a pre-determined vesting schedule from the date of grant.

The fair value of the share options is estimated at the grant date using a binomial option pricing model, taking into account the terms and conditions upon which the share options are granted. However, the above performance condition is only considered in determining the number of instruments that will ultimately vest.

8. EMPLOYEE BENEFITS

9 Defined contribution plans

The Company operates defined contribution plan (Provident fund) for all qualifying employees of the Company. The employees of the company are members of a retirement contribution plan operated by the government. The Company is required to contribute a specified percentage of payroll cost to the retirement contribution scheme to fund the benefits. The only obligation of the Company with respect to the plan is to make the specified contributions.

The Company''s contribution to Provident Fund aggregating Rs, 1,111.81 Lacs (2016: Rs, 999.91 Lacs; 2015: Rs, 818.92 Lacs) has been recognized in the Statement of Profit and Loss under the head Employee Benefits Expense.

Information about the contribution to defined contribution plans for key managerial personnel is disclosed in note 38.

10 Defined benefit plan

The Company sponsors funded defined benefit (Gratuity) plan for qualifying employees, covered under the Payment of Gratuity Act, 1972. The defined benefit plan is administered by a third-party insurer (Life Insurance Corporation of India). This third-party insurer is responsible for the investment policy with regard to the assets of the plan.

Under the plan, the employees are entitled to a lump-sum amounting to 15 days'' final basic salary for each year of completed service payable at the time of retirement / resignation provided the employee has completed 5 years of continuous service.

h) Asset liability matching strategies:

The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate (in particular, the significant fall in interest rates, which should result in a increase in liability without corresponding increase in the asset).

i) Effect of plan on entity''s future cash flows

a) Every year, the insurance company carries out a funding valuation based on the latest employee data provided by the Company. Any deficit in the assets arising as a result of such valuation is funded by the Company.

b) The Company expects to contribute Rs, 730.52 lacs to its gratuity plan for the next year.

c) Weighted average duration of the defined benefit obligation is 6 years (based on discounted cash flows).

11. RELATED PARTY DISCLOSURES

Names of related parties and description of relationship:

(a) Subsidiaries Upasana Trading Limited, Shoppers Stop.

com (India) Limited,

Shoppers Stop Services (India) Limited,

Crossword Bookstores Limited.

Gateway Multi Channel Retail (India)

Limited.

Hypercity Retail (India) Limited.

(b) Key Management Personnel Executive Director: Govind Shrikhande

Non Executive Directors: Chandru L.Raheja

Ravi Raheja Neel Raheja B.S.Nagesh Nitin Sanghavi Deepak Ghaisas Nirvik Singh

Abanti Sankaranarayanan Gareth Thomas Manish Chokhani

(c) Promoter directors having control C.L. Raheja, Ravi C. Raheja, Neel C. Raheja / significant influence over the

company.

(d) Entities in which the promoter Ivory Properties and Hotels Private Limited, directors have control/significant K.Raheja Corp. Private Limited. influence

K.Raheja Private Limited, Inorbit Malls (India) Private Limited Chalet Hotels Private Limited Trion Properties Private Limited; Magna Warehousing & Distribution Private Limited

12. FINANCIAL INSTRUMENTS

Capital risk management

The Company''s objectives when managing capital are to safeguard continuity as a going concern, provide appropriate return to shareholders and maintain a cost efficient capital structure. The Company determines the amount of capital required on the basis of an annual budget and a five year plan, including, for working capital, capital investment in stores, technology, and strategic investment in subsidiary companies. The Company''s funding requirements are met through internal accruals and a combination of both long-term and short-term borrowings.

The Company monitors capital on the basis of total debt to total equity on a periodic basis. The following table summarizes the capital of the Company:

The Company''s objective is to keep the debt equity ratio below 1 which it has achieved in both these years.

B. Financial risk management

A wide range of risks may affect the Company''s business and operational / financial performance. The risks that could have significant influence on the Company are market risk, credit risk and liquidity risk. The Company''s Board of Directors reviews and sets out policies for managing these risks and monitors suitable actions taken by management to minimize potential adverse effects of such risks on the Company''s operational and financial performance.

(a) Market risk:

Market Risk is the risk that changes in market place could affect the future cash flows to the company. The market risk for the company arises primarily from product price risk, interest rate risk and, to some extent, foreign currency risk.

Product price risk: In a potentially inflationary economy, the Company expects periodical price increases across its retail product lines. Product price increases which are not in line with the levels of customers'' discretionary spends, may affect the business/retail sales volumes. In such a scenario, the risk is managed by offering judicious product discounts to retail customers to sustain volumes. The Company negotiates with its vendors for purchase price rebates such that the rebates substantially absorb the product discounts offered to the retail customers. This helps the Company protect itself from significant product margin losses. This mechanism also works in case of a downturn in the retail sector, although overall volumes would get affected.

Interest risk: The Company is exposed to interest rate risk primarily due to borrowings having floating interest rates. The Company uses available working capital limits for availing short term working capital demand loans with interest rates negotiated from time to time so that the Company has an effective mix of fixed and variable rate borrowings. Interest rate sensitivity analysis shows that an increase / decrease of fifty basis points in floating interest rates would result in decrease / increase in the Company''s profit before tax by approximately Rs, 283 lacs (2016: Rs, 260 lacs).

Currency risk: The Company''s significant transactions are in Indian Rupees and therefore there is minimal foreign currency risk. Generally, the Company fully covers the foreign currency risk for transactions in foreign currency which are primarily for import of merchandise, by entering into forward foreign exchange contracts. Also Refer Note 34 for the forward foreign currency contracts outstanding at the end of the reporting period.

(b) Credit risk:

Credit risk is a risk that the counterparty will default on its contractual obligation resulting in financial loss to the Company. The credit risk for the Company primarily arises from credit exposures to trade receivables (mainly institutional customers), deposits with landlords for store properties taken on leases and other receivables including balances with banks.

Trade and other receivables: The Company''s retail business is predominantly on ''cash and carry'' basis which is largely through credit card collections. The credit risk on such collections is minimal, since they are primarily owned by customers'' card issuing banks. The Company has adopted a policy of dealing with only credit worthy counterparties in case of institutional customers and the credit risk exposure for institutional customers is managed by the Company by credit worthiness checks. The Company also carries credit risk on lease deposits with landlords for store properties taken on leases, for which agreements are signed and property possessions timely taken for store operations. The risk relating to refunds after store shut down is managed through successful negotiations or appropriate legal actions, where necessary.

The Company''s experience of delinquencies and customer disputes have been minimal. Further, Trade and other receivables consist of a large number of customers, across geographies, hence, the Company is not exposed to concentration risks.

(c) Liquidity Risk:

Liquidity risk is a risk that the Company may not be able to meet its financial obligations on a timely basis through its cash and cash equivalents, and funds available by way of committed credit facilities from banks.

Management manages the liquidity risk by monitoring rolling cash flow forecasts and maturity profiles of financial assets and liabilities. This monitoring includes financial ratios and takes into account the accessibility of cash and cash equivalents and additional undrawn financing facilities.

In respect of financial guarantee contracts, no amounts are recognized based on the results of the liability adequacy test for likely deficiency / defaults by the entities on whose behalf the Company has given guarantees, grounded on the Company''s actual experience.

The Company has access to following financing facilities which were undrawn as at the end of reporting periods mentioned.

Notes

1. Under the previous GAAP, there was no separate record in the financial statements for ''Other Comprehensive Income''. Under Ind AS, specified items of income, expense, gains and losses are presented under Other Comprehensive Income.

2. Under the previous GAAP, point award schemes were measured from the standpoint of the grantor, (the Company). On transition to Ind AS, point award schemes are measured at fair value from standpoint

of the holder. Consequently, the Company has recognized deferred revenue with corresponding adjustment to total equity and / or profit or loss, as applicable.

3. Under the previous GAAP, interest free lease deposits were recorded at their transaction value. On transition to Ind AS, these lease deposits are premeasured at amortized cost using the effective interest rate method. The difference between the transaction value of the deposit and amortized cost is regarded as prepaid rent and recognized as expenses uniformly over the lease period. Interest income, measured by the effective interest rate method is accrued. The effect of these is reflected in total equity and / or profit or loss, as applicable.

4. Under the previous GAAP, equity settled employee share-based payments were recognized using the intrinsic value method. Under Ind AS, the cost of equity settled employee share-based payments is recognized based on the fair value of the options as on the grant date. The effect of these is reflected in total equity and/ or profit or loss as applicable.

5. Under the previous GAAP, actuarial gains and losses on employee defined benefit obligations were recognized in profit or loss. Under Ind AS, the actuarial gains and losses on re-measurement of net defined benefit obligations are recognized in other comprehensive income. This resulted in a reclassification between profit or loss and other comprehensive income.

6. Under the previous GAAP, proposed dividends were recognized as a provision in the financial statements, even if declared after the balance sheet date. Under Ind AS, dividends are recognized when declared. This results in a timing difference and has been reflected in total equity of the relevant financial years.


Mar 31, 2016

1. SERVICE TAX

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

2. Segment reporting

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

3. DERIVATIVES

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

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

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

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

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

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

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


Mar 31, 2014

1. COMPANY BACKGROUND

Shoppers Stop Limited (''SSL'' or ''the Company'') was incorporated on 16 June 1997. The Company is engaged in the business of retailing a variety of household and consumer products through departmental stores. As at 31 March 2014, the Company operated through 67 such departmental stores located in different cities of India.

2. Other disclosures:

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

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

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

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

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

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

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

6. CONTINGENT LIABILITIES AND COMMITMENTS:

(All amounts in lacs)

Mar-14 Mar-13

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

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

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

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

b) Other matters 227.25 52.25

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

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

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

f) Bank Guarantees 371.36 379.62

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

7. SERVICE TAX

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

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

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

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

9. SEGMENT REPORTING

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

10. DERIVATIVES

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

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

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

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

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

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

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

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


Mar 31, 2013

1. COMPANY BACKGROUND

Shoppers Stop Limited (''SSL'' or ''the Company'') was incorporated on 16 June 1997. The Company is engaged in the business of retailing a variety of household and consumer products through departmental stores. As at 31 March 2013, the Company operated through 55 such departmental stores located in different cities of India.

2. SERVICE TAX

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

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

3. SEGMENT REPORTING

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

4. DERIVATIVES

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

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

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


Mar 31, 2012

1. COMPANY BACKGROUND

Shoppers Stop Limited ('SSL' or 'the Company') was incorporated on 16 June 1997. The Company is engaged in the business of retailing a variety of household and consumer products and books through departmental stores. As at 31 March 2012, the Company operated through 51 such departmental stores located in different cities of India.

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

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

1.3 Other disclosures:

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

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

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

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

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

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

4. CONTINGENT LIABILITIES AND COMMITMENTS:

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

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

aggregating

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

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

b) Other matters 52.25 52.25

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

not provided for

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

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

f) Bank Guarantees 324.74 -

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

5. SERVICE TAX

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

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

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

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

6. SEGMENT REPORTING

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

7. DERIVATIVES

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

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

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

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

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

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

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

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

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


Mar 31, 2011

1. COMPANY BACKGROUND

Shoppers Stop Limited (SSL or the Company) was incorporated on 16 June 1997. The Company is engaged in the business of retailing a variety of household and consumer products and books through departmental stores. As at 31 March 2011, the Company operated through 42 such departmental stores located in different cities of India.

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

(All amounts in Rs. lacs)

Mar-11 Mar-10

3. CONTINGENT LIABILITIES IN RESPECT OF:

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

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

(i) Disputed Income tax matters in appeal 535.91 245.42

(ii) Disputed sales tax matters in appeal 16.46 428.63

(iii) Disputed Customs Duty 17.09 24.00

c) Contingent contractual claims 236.19 236.19

d) Others 52.25 -

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

4. SERVICE TAX

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

5. SEGMENT REPORTING

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

6. RELATED PARTY DISCLOSURES

Names of related parties and description of relationship:

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

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

Gateway Multichannel Retail (India) Limited.

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

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

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

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

Trion Properties Private Limited

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

Timezone Entertainment Private Limited

(e) Key Management Personnel Executive Director : Govind Shrikhande

Non Executive Directors: Chandru L. Raheja

Ravi Raheja Neel Raheja

B. S. Nagesh

Gulu L. Mirchandani

Shahzaad Dalal

Nitin Sanghavi

Deepak Ghaisas

Nirvik Singh

7. DERIVATIVES

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

8. ESOP SCHEMES

b) New Schemes Launched

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

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

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

V. CONTINGENT LIABILITIES 439.90 161.82

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

10. EMPLOYEE BENEFITS

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

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

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

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

11. EXCEPTIONAL ITEM

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

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

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

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

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

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

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


Mar 31, 2010

1. COMPANY BACKGROUND

Shopper’s Stop Limited (‘SSL’ or ‘the Company’) was incorporated on 16 June 1997. The Company is engaged in the business of retailing a variety of household and consumer products and books through departmental stores. As at 31 March 2010, the Company operated through 34 such departmental stores (including HomeStop) located in different cities of India.

(All amounts in Rs. lacs) Mar-10 Mar-09 2. CONTINGENT LIABILITIES IN RESPECT OF: a) Guarantee given for loan taken by Joint venture companies from banks 4,490.00 5,090.00 b) Contingent contractual claims 236.19 239.20 c) Disputed Income tax matters in appeal 245.42 51.60 d) Disputed sales tax matters in appeal 428.63 43.63 e) Disputed Customs Duty 24.00 24.00

3. SERVICE TAX

The Finance Bill 2010 proposes to impose a levy of Service Tax on renting of immovable properties given for commercial use, retrospectively with effect from 1 June 2007. Since, (a) the Finance Bill has not yet been enacted and (b) based on legal advice the company is planning to challenge the levy in a court of law, no provision for the same has been made in the accounts - Rs. 1,728 lacs.

4. SEGMENT REPORTING

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

The company expects to contribute Rs. 83.29 lacs to its Gratuity plan for the next year.

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

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

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

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

5. The Company allotted 4,000,000 warrants to Promoters on 29 December 2009. Each warrant is convertible at the option of the Promoters, into one Equity share at a price of Rs. 307.18/- at any time before the expiry of 18 months from the date of allotment.

6. EXCEPTIONAL ITEM

The Board of Directors of Gateway Multichannel Retail (India) Limited (Gateway) had in January 2009 decided to discontinue operations and the company had therefore made a provision for its investments and loans and advances aggregating to Rs. 2,486.40 lacs in the previous year. The impairment charge was disclosed as an “Exceptional item” in the Profit and Loss Account. During the year the company has recovered Rs. 187.72 lacs from Gateway and has accordingly disclosed the credit under the “Exceptional item” line.

7. Figures of the previous year are regrouped and reclassified wherever necessary to correspond to the figures of the current year.

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