The modern retail industry in India has done well in FY 2010-11 on the
 back of economic and political stability, long term policy continuity,
 strong underlying economic growth, improved customer sentiment, growing
 urbanization & affluence and enormously growing potential demand in the
 Indian Market.
 
 For the year 2010-11, your Company has achieved revenues of Rs. 1929
 crores, up by 23%, EBIDTA of Rs. 152 crores, up by 34% and Profit after
 Tax of Rs. 75 crores, up by 50%, over the previous year.  Operating
 profit (EBIDTA) has increased from 7.30% in the previous financial year
 to 8% of sales in the current financial year.
 
 In the year gone by, your Company saw a Like-to- Like sales growth of
 17%, whilst chain level growth in sales was 23%. The Average Selling
 Price & Transaction Size have seen growths of 7% and 9% respectively
 over the last year. The QIP and Promoters Warrants issue totaling to
 Rs. 253 crores was successfully completed by your Company. In view of
 this robust performance a 15% dividend has been recommended by the
 Board, subject to approval of members.
 
 As part of our continuous endeavour to grow and penetrate the market,
 your Company opened 6 new Shoppers Stop stores during the year- one
 each at Bengaluru, Bhopal, Delhi, Aurangabad, Siliguri and Durgapur
 taking the number of chain of stores to 38 as of March 31, 2011. At a
 chain level your Company has added more than 3,00,000 square feet in
 the year 2010-11.
 
 In the year, your Company has acquired 32% stake in Hyper City Retail
 (India) Limited making it a 51% subsidiary of your Company. Therefore,
 the consolidated financials of the year reflect HyperCity financial
 numbers. Your Company and its management believes that there is immense
 potential in the hypermarket sector of modern retailing, and HyperCity
 will be a significant growth engine for your Companys overall
 profitability in the years to come. HyperCitys business is currently
 in the evolution stage being in its fifth year of operation. In terms
 of customers franchise it has been able to earn commendable loyalty
 from its customers. Its stores are well appreciated by customers and
 even admired in the industry.  Awards conferred upon HyperCity across
 last many years support this fact.
 
 Your Companys loyalty programme, First Citizen achieved a major
 milestone in FY 10-11. The total membership of the programme crossed
 the 2 million mark and today is one of the largest loyalty programmes
 across sectors. Your Companys First Citizens continue to be a huge
 bastion of support and have contributed to 73% of your Companys sales.
 As our loyalty programme grows, our Facebook fan club is also growing
 very fast. It has now crossed 7 lakhs fans. It is very important for a
 retail company like yours to remain in touch with customers at all the
 times and social media is an important avenue to remain in constant
 touch with customers.
 
 In the year under review, your Company received a number of coveted
 awards. These have been featured on page nos. 32 and 33 of this Annual
 Report. One of the most significant was Most Respected Retail Company
 of the Year from Business World. This award is given to some of the
 best companies in various sectors, and in modern retail your Company
 has won it. Apart from that other important awards that your Company
 has won were - VMRD Retail Design Award, Customer & Brand Loyalty Award
 at the Fourth Loyalty Awards programme and most admired Non Store
 Fashion and Lifestyle Retail of The Year at IMAGES Fashion Awards
 2011. These awards only reiterate the respect and admiration that your
 Company commands in the industry and amongst its peers.
 
 Your Company has drawn up extensive plans to launch its next phase of
 growth and expansion.  With the strong backing of your Companys
 customers, shareholders, associates and vendor partners, your Company
 and its management is confident that the your Company will go from
 strength to strength in the future and continue to be a major and
 significant player in the field of Indian modern retail.
 
 CHANDRU L. RAHEJA 
 Chairman