Shoppers Stop

1.  COMPANY BACKGROUND
 
 Shoppers Stop Limited (SSLor 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 2009, the Company operated through
 30 such departmental stores located in different cities of India.
 
 2. Contingent liabilities in respect of:
 
 a) Guarantee given for loan taken by Joint venture companies from
 banks.                                           509.00       361.50
 b) Contingent contractual amounts                 23.92         0.92 
 c) Disputed sales tax matters in appeal            4.36         0.07
 d) Disputed Customs Duty                           2.40         2.40
 e) Unpaid service tax (Refer note 33(b))            -          28.20
 f) Disputed Income tax matters in appeal           5.16          -
 
 3. SEGMENT REPORTING
 
 The company is primarily engaged in the business of retail trade
 through retail and departmental store facilities, which in the context
 of Accounting Standard 17 on Segment Reporting constitutes a single
 reporting segment.
 
 Deferred Tax Asset on account of carry forward losses and unabsorbed
 depreciation has not been recognised on consideration of prudence as
 set out in Accounting Standard 22 on Accounting for Taxes on Income.
 
 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 15 on Employee Benefits have not been
 given,
 
 4.  SERVICE TAX
 
 a) Pursuant to the amendment of the Cenvat Credit Rules w.e.f. 1 April
 2008, as legally advised, the Company has commenced utilizing the
 accumulated service tax input credit of Rs. 175.06 million.
 
 b) Pursuant to the Order of the Delhi High Court on 18 April 2009,
 which set aside the levy of service tax on rentals of immovable
 property, the Company has not provided for service tax expense for the
 year of Rs. 99.04 million. The ruling is however, subject to any
 proceedings/appeal that may be filed by the Government and Orders
 thereupon.
 
 5.  As at 31 March 2009, the Company has investment and loans and
 advances relating to Gateway Multichannel Retail (India) Limited
 (Gateway), a subsidiary company, aggregating to Rs. 248.64 million. The
 Board of Directors of Gateway, in January 2009, decided to discontinue
 its catalogue retailing operations as the business did not meet the
 planned performance levels to support the investments required in the
 current economic climate. Hence, provision for impairment has been made
 which is disclosed as an Exceptional Item in the Profit and Loss
 account.
 
 6.  The Company has not received any intimation from the suppliers
 under the Micro small and Medium Enterprises Development Act, 2006 and
 therefore disclosures, if any, relating to amounts unpaid as at the
 year end together with interest paid/payable as required under the said
 Act have not been given.
 
 7.  Figures of the previous year are regrouped and reclassified
 wherever necessary to correspond to the figures of the current year.