Shoppers Stop

Incorporated as a private limited company on June 16, 1997, we beacme
 a
 deemed public limited company on December 8, 1997. Pursuant to an
 amendment to the Companies Act in the year 2000, our Company was
 converted from a deemed public company to a full fledged public
 company
 with effect from October 6, 2003.
 
 Prior to incorporation two of our existing stores at Mumbai and
 Bangalore were run by a division of Ivory Properties & Hotels
 Limited
 (IPHL) under the brand named Shoppers' Stop. Soon after our
 incorporation, IPHL executed a conducting agreement with us dated
 November 3, 1997 giving us a right to participate in running the
 departmental stores which included the right to use (i) the Mumbai
 Shopper's Stop property (ii) the Bangalore Shoppers' Stop property
 (iii) the agreements and arrangements with various parties relating
 to
 purchases, sales, franchises and co-sponsorship (iv) the brands
 developed (v) the diverse modes of rendering services to the
 customers
 (vi) the data bank of Shopper's Stop, the membership of the First
 citizen's Club etc; (vii) the software, various systems and training
 programmes (viii)books and cassettes providing knowledge for retail
 trade, (ix) the business sport systems and (x) the names of the
 stores
 and logos of the stores.
 
 This agreement was terminated and a fresh Conducting Agreement was
 executed with IPHL dated March 31, 2000.
 
 IPHL signed a Deed of Assignment dated March 31, 2000 with us for
 transferring the ownership of certain trademarks, trade names,
 goodwill
 and brand names in our favour known as SHOPPER' STOP (label), STUDIO
 KRT (label), STOP (label with color schemes)STOP(device),
 STOP(label),
 FIRSTCITIZENS'CLUB, BLUESBIZAAR, BLUES BIZARRE, BLUESBIZAR (word &
 label) BLUES BIZAAR (word & complete label) i(in-house brand),
 i(in-house brand), B (in-house brand).
 
 Out of the various trademarks under which we presently market our
 in-house products only six are registered in our name.  Three of the
 trademarks we presently market some of our in-house products are
 registered in the name of our Promoter, Ivory Properties and Hotels
 Pvt. Ltd. and applications are yet to be made to register them in
 the
 name of our Company.  For the rest, applications for the
 registration
 of these trademarks in the name of our Company have been submitted
 to
 the relevant trademark authorities and are still pending with them.
 
 We initially acquired 790 equity shares of Rs 100 each in UTL from
 some
 of the existing shareholders and increased our stake in the company
 to
 1265 Equity Shares (25.3% of the equity capital) on March 23, 1999 at
 a
 purchase price of Rs.100 per share. UTL was a trading company, and
 was
 one of our suppliers for garments and accessories. We enhanced our
 stake in UTL to 100% in February 2000.
 
 UTL has discontinued its trading operations from January 2003. UTL
 handles our distribution and logistic function since February 2000
 and
 now operates through four distribution centers located in Mumbai,
 Bangalore, New Delhi and Kolkata.
 
 Shoppers' Stop Services (India) Ltd was incorporated as our wholly
 owned subsidiary in March 2000 to provide shared services and
 consultation, in accounting and logistics operations. Currently,
 this
 subsidiary has limited operations.
 
 Shoppers' Stop.Com (India) Ltd was incorporated in February 2000 as
 our
 wholly owned subsidiary to provide on-line shopping facilities to
 our
 customers. As this venture did not yield desired results, its
 operations were discontinued in February 2001.
 
 Profound Readers' Choice Trading (India) Ltd was incorporated in
 November 1999 as our subsidiary and acquired `Crossword', a chain of
 books and music stores, from India Book House Ltd (IBHL) under
 trademark and style of Crossword, as a going concern by way of slump
 sale on March 31, 2000. The Crossword Division from IBHL was
 acquired
 at a purchase consideration of Rs.137.5 mn for the whole of the
 acquired business undertaking. The Deeds of Assignment between IBHL
 and
 Profound Readers' Choice Trading (India) Ltd were signed on March
 31,
 2000 & July 5, 2000 for assignment of trademarks of Crossword.
 
 Profound Readers' Choice Trading (India) Ltd changed its name to
 Crossword Bookstores Ltd (Crossword) and has ICICI Trusteeship
 Services
 Ltd a/c ICICI Emerging Sectors Fund as it's equity investor holding
 49%
 of its equity, and is governed by a separate shareholders'
 agreement.
 
 Milestones of Our Business
 
 Year   Events
 
 1991   IPHL opened its first Shoppers' Stop store selling men's wear
 
        at Andheri (Mumbai)                       
 
 1992   Ladies section added
 
 1993   Children and non apparel accessories sections added
 
        Disney carnival organized, with official  Disney characters 
        (Mickey, Minnie,  Donald and Goofy) participating, In
        house Retail Management Trainee Programme started
 
 1994   First Citizen Club loyalty card launched
 
 1995   Second store opened (Bangalore)
 
 1996   Festival of Britain celebrated in association with the 
        Commercial Department of the British Consulate         
 
 1997   Shopper's Stop Limited was incorporated on June 16
 
 1997   Festival of Indian tradition and culture,`Parikrama',
 launched
        Co-branded credit card launched for FCC members in 
        partnership with HSBC                            
 
 1998   Third store opened (Hyderabad), the then largest with 
        72,287 sq. ft of retail area SSL co-opted as India's only 
        member to the Intercontinental Group ot Department Stores
 (IDGS)
 
 1999   Implemented JDA Retail ERP (a global leader in retail 
        ERP packages)                              
        Fourth and Fifth stores launched (Jaipur & Delhi)
 
 2000   Sixth & Seventh stores opened (Chennai & Chembur, Mumbai)
 
        Placed equity with external investors to raise Rs 600 mn
 
        Acquired Crossword, one of India's leading book retailing
 chain, 
        from India Book House in partnership with ICICI Trusteeship 
        Services Limited (A/c ICICI Emerging Sectors Fund)
 
 2001   Implemented Warehousing Module of JDA, Auto Replenishment and
 
        Auto Purchase Order system and business to business
 connectivity
 
        Eight and Ninth store launched (Pune & Bandra, Mumbai)
 
        Profit Linked Reward System (PLRS) introduced (or all
 employees
 
 2002   Tenth store opened (Kandivali, Mumbai)
 
 2003   Received various industry awards from CMAI (including Best 
        Retailer of the Year) and from Nasscom (Best IT
        Practice in Retail Category)
        Signed Austin Reed licence for men's outerwear for India 
        exclusively                          
        Three stores launched taking the total number of stores to 
        13 (Mulund,  Mumbai, Gurgaon and Kolkata)     
 
 2004   Fourteenth, fifteenth and sixteenth stores launched in 
        February 2004 (Malad, Mumbai), June 2004 (Salt Lake City,
        Kolkatta) and October 2004 (Bangeratta Bangalore) respectively
 
        taking total retail area to 752,848 sq ft    
        Received Superbrand status for 2003 and 2004
 
        Received Images Retail award for the Most favoured retail 
        destination of the year - September, 2004      
 
        Received the Organization With Innovative HR Practices 
        award at the HR Excellence Awards organized by Mid-Day, Big 
        Break & Daks - November 2004
 
        Reveived Top retailer 2004 India Bronze award given by Retail
 
        Asia-Pacific Top 500 awards
 
 Auditor Qualifications': Statutory Auditor Deloitte Haskins & Sells
 vide its report dated February 23, 2005 has mentioned the following
 qualification in respect of operations of Upasna Trading Limited
 which
 is being reproduced from their report as follows:
 
 (i) The operations of Upasna, a 100% subsidiary of SSL are entirely
 dependent on SSL and SSL is committed to provide the necessary level
 of
 financial support to Upasna to enable it to operate and pay its
 debts,
 if required. We are informed that management plans to enhance
 Upasna's
 role in the distribution and logistics operations of group companies
 and it will therefore be able to repay SSL's dues in the near
 future.
 Of the Rs.39.30 million and Rs.39.84 million outstanding as at 30
 November 2004 and 31 March 2004 respectively, Rs.26.42 million and
 Rs.25.30 milion respectively, had been advanced to meet certain
 disputed liabilities which have been paid by Upasna under protest
 and
 SSL has correspondingly included such amounts under contingent
 liabilities, [see note 2 in Annexure III (a)]. In respect of the
 balance of Rs. 12.88 million and Rs. 14.54 million respectively,
 since
 the impact of non-recovery, if any, cannot be quantified the Summary
 Statements [Annexures I (a) and II (a)] have not been adjusted.
 
 For further details, please refer to section Consolidated Financial
 Information in this Red Herring Prospectus.
 
 Our corporate structure:
 
 Our existing corporate structure is as under:
 
                          Shopper's Stop Ltd
 
 Crossword       Upasna        Shopper's Stop.Com  Shopper's Stop 
 Bookstores Ltd. Trading Ltd.  (India) Ltd.        Services (India)
 Ltd
 
 51%*               100%                100%              100%
 
 * An agreement dated February 28, 2005 has been entered into between
 Shoppers Stop, ICICI Trusteeship Services Ltd. (in its capacity as
 trustee of ICICI Emerging Sectors Fund a scheme of ICICI Emerging
 Sectors Trust/Mutual Fund) (hereinafter ICICI) and Crossword
 Bookstores Limited. Pursuant to the provisions of the said agreement
 our Company has agreed to purchase 4685625 equity shares of
 Crossword
 from ICICI not later than June 30, 2005. Pursuant to clause 4 of the
 said agreement in the event that the sale and purchase of the
 abovmentioned shares is not completed by June 30, 2005 (unless
 otherwise extended by mutual consent) the said agreement shall
 terminate and cease to have effect.
 
 2005
 
 -Shoppers' Shop has fixed the price band for its maiden public offer
 of 69.46 lakh shares between Rs 210 and Rs 250 per share. The issue
 is slated to open on April 27 and close on May 3. This price band
 allows the company to raise a maximum of Rs 173 crore. Post-issue,
 the promoters' stake would touch around 67 per cent from the existing
 79.75 per cent holding. The book-running lead managers are Enam
 Financial Consultants Pvt Ltd, JM Morgan Stanley Pvt Ltd, Kotak
 Mahindra Capital Company Ltd, ICICI Securities Ltd and co-book
 running manager is IL&FS Investmart Ltd.
 
 -The IPO of Shopper's Stop is oversubscribed by 5.3 times on the
 first day of the offer, with bids received for 3.04 crore shares as
 against 57.6 lakh shares on offer in the price band of Rs 210 to Rs
 250.
 
 - The Shoppers' Stop IPO, which began on April 28 and closed on May
 4, is subscribed 8.6 times.
 
 - Shoppers' Stop scrip made a sparkling debut on the bourses on May
 23. The counter closed at Rs 372.60 on the Bombay Stock Exchange
 (BSE), 56.60 per cent higher than its issue price of Rs 238. The
 counter opened at Rs 335 on the BSE  a 40.9 per cent premium over the
 issue price.
 
 -Shoppers Stop enters into franchisee agreement with Mothercare PLC,
 UK
 
 -Shoppers' Stop sets up new outlet in Bangalore