Shopper's Stop Limited - Securities and Exchange Board of India

However, since these entities were co promoted by some of our Promoters and could consequently be
treated as companies promoted by our Promoters within the ambit of SEBI Guidelines. Our Promoters
alone are not in ownership and control of these entities and these are subject matter of the abovementioned
family differences and disputes.
Mumbai Undivided Properties and Entities
The Mumbai Undivided Properties and Entities comprise of various companies, partnership firms and
trusts. The registered office / office of the said Mumbai Undivided Properties and Entities continues to be
at the office of the Promoters at Construction House A, Khar, Mumbai (which used to be the registered
office of those entities even prior to the aforesaid distribution).
Since the time of the said distribution, these entities are largely dormant except for certain transactions
like repayment of borrowings, sale of stock in trade, suit filed for recovery of amounts and administrative
overheads, etc. Further members of both the families have separately operated bank accounts of some
of those entities which mainly affecting the inter entity accounts.
Both the families have separately in their possession various documents, papers, records, assets, etc. of
the said Mumbai Undivided Properties and Entities which has made the finalisation of accounts, audit,
filing of various returns and forms with different authorities and various other statutory compliances
difficult and has resulted in the same not having been completed for several years. Several filings and
compliances have not been made due to the said family disputes and the fact that the C.L. Raheja Family
alone is not in ownership and control of the said Mumbai Undivided Properties and Entities. Hence as on
the date of this draft Red Herring Prospectus our Promoters are unable to disclose information with
respect to the Mumbai Undivided Entities and further our Promoters are unable to state with certainty
about any liability or contingent liability in respect of the said entities.
In respect of some of the Mumbai Undivided Properties and Entities where returns of income (under the
I.T. Act ) were filed for some of the years, the tax and penalty demands raised have largely been paid
except in a few cases amounting to Rs. 53,32,033/-(plus interest) which tax demands and claims are
outstanding. Against the said tax demands in some of these entities there are refunds due of
approximately 14,47,380/- (plus interest) and in one case the Income Tax Authorities have attached one
of the properties of one of these companies for recovery of the said demands. Further where
assessments have not been completed the tax demands, if any, are not known.
Various private trusts were constituted, under which the members of the K. Raheja Corp Group were,
along with certain other persons, beneficiaries. These private trusts were so organized such that only one
trust was engaged in the carrying on of business. Some of these trusts were also partners in partnership
firms (for the purpose of sharing in the profits and losses, although not involved in the day to day
operation of the business of such partnership firms). The other remaining trusts were only direct or
indirect beneficiaries of the aforesaid private trust carrying on business. We understand from our
Promoters that while the affairs of the private trust which was carrying on business have been wound up
and also the trusts which were partners in some partnership firms have ceased to be partners and
complete distribution of assets has also taken place, in some of the beneficiary trusts, though the date of
distribution of assets have passed, certain assets are yet to be distributed. Our Promoters believe that
the amounts involved in these trusts are insignificant and are not expected to have any material impact
on our Company or our Promoters.
Southern Undivided Companies and Entities
The Southern Undivided Companies and Entities comprise of various companies, partnership firms and
trusts.
In respect of the South Entities, our Promoters have relied upon and fully disclosed all the details
provided by the other family members and also the information available with them in this regard.
In respect of one of such companies, the finalisation of accounts, audit, filing of various returns and forms
with different authorities and various other statutory compliances for last several years have not been
made due to family differences and disputes as mentioned above. Further, in respect of the remaining
entities some of the statutory compliances, etc. may not have been fully carried out due to the said family
differences and disputes. In view of the said differences and disputes, also the fact that C.L. Raheja
Family alone is not in ownership and control of the said Southern Undivided Companies and Entities and
due to said non-compliances (herein mentioned in this clause), our Promoters are unable to state with
certainty about any liabilities or contingent liability other than those reflected in the annual audited
accounts of those entities.
114