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

Expenditure
Cost of goods sold grew by about 18% over the previous financial year as compared to increase in gross
retail turnover of 21.4%, thus helping us in reporting higher margins in our business. .
Other Income
Other income decreased by 42.5 % from Rs. 40 mn in FY 2002 to Rs. 23 mn in FY 2003 as we reported
lower write backs of liability towards expired gift vouchers and did not have Sales Tax refunds as in the
previous financial year.
Earnings before Interest Depreciation Tax and Amortisation and exceptional items (EBIDTA)
EBIDTA margins as a percentage of Gross Retail Turnover increased to 6.5% in FY 2003from 4.3% in FY
2002. We reported an EBIDTA of Rs. 196 mn in FY 2003 as against Rs. 109 mn in FY 2002.
Finance Charges
Finance charges, as a percentage of Gross Retail Turnover, declined from about 2.1% of Gross Retail
Turnover to about 1.05% of Gross Retail Turnover. This represented a drop of about 40.7%, due to our
getting funds at lower rates.
Depreciation.
Depreciation charges accounted for 1.9% of Gross Retail Turnover due to increase in fixed assets on
account of opening of additional stores and renovation capex incurred during the year. Our depreciation
charges amounted to Rs. 58 mn in FY 2003 as against Rs. 49 mn in FY 2002.
Income tax
We provided for income tax as our profits increased and had a tax charge of about Rs. 0.17 mn.
Profit after tax as per Audited statement of Accounts
Our profit after tax margins, as a percentage of Gross Retail Turnover was about 3.5% as our profits
increased to Rs. 106 mn in FY 2003 as against Rs. 2 mn in the prior year.
Adjusted Profit
Our profit after tax has been adjusted on account of, adoption of accounting policy prescribed by AS-26,
with respect to intangible items namely preliminary expenses, brand development expenses and store
launch expenses and due to reclassification and capitalization of software consultancy cost as fixed
assets and provision of depreciation on the same at the rate of 20% each year.
Adjustment for fiscal 2003
We have adjusted our profits for fiscal 2003 to present the net effect of change in accounting policy
pursuant to adoption of AS-26 from fiscal 2004 to reallocate the cost relating to amortisation of
preliminary expenses, brand development expenses and store launch expenses to period in which they
are incurred. Also due to reclassification of software consultancy cost as fixed assets and provision of
depreciation on the same. On account of the following adjustments, we have restated our profits for
fiscal 2003 downwards by Rs.16 million.
Comparison of fiscal 2004 with fiscal 2003
Some of the key developments that occurred during 2004 include the following: We opened 2 new
stores in FY2004. Also the 3 stores that we had opened last year were now fully operational, taking
our store count to 14 stores.
Gross Retail Turnover
Our Gross Retail Turnover increased by 33.5% in FY 2004 to Rs. 4045 mn as compared to Rs. 3030 mn
in FY 2003.
Other Income
Other income decreased by 21.8 % from Rs. 23 mn in FY 2003 to Rs. 18 mn in FY 2004 as we reported
non-recurring write-ups of liability.
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