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

Our capital expenditure plan as per our objects for the current issue is as below: Objects of the Issue
Activities
Setting up of
new stores
Store Capex &
Deposits for Store Sites
Renovation and
expansion of
existing stores
Already
Total spent upto
Project Cost July 31,
2004
1,125
156
38
6
Amount for the period (Rs in million)
154
August 1,
2004 to
March 31,
2005
Balance Amount
Year ending
March 31,
2006
212 312
66 84
Year ending
March 31,
2007
562
-
Amount to
be raised by
way of this
Issue
1,086
Issue
Expenses
80
80 -
-
80
Total 1,361 44 358 396 562 1,316
Out of the project cost of Rs.1361 mn, we have already spent Rs.44 mn on store capex, deposits and
renovation and expansion of existing stores out of our internal accruals. The balance fund requirement in
FY05 of Rs.358 mn will be funded through the IPO proceeds and internal accruals.
We intend part financing the above fund requirements of Rs.1316 mn through the proceeds of this Issue.
In case of any shortfall/cost overrun, we intend meeting the funds requirements through our internal
accruals. Our internal accruals (our adjusted restated net profits plus depreciation) for FY 2004 as per our
last audited accounts are Rs 195 mn.
We plan opening the eleven new stores as given below:
Year ending Number of Locations tied up Area (Sq. Ft)
Stores
March 31, 2005 3 Bangalore, Pune, Mumbai 157,767
March 31, 2006 4 Bangalore, Delhi, Pune#, UP 221,314
March 31, 2007 4 Bangalore (2)#, Noida, Hyderabad 338,470
# Sites have been identified but contractual agreements have not yet been executed for three of the
proposed stores (Pune and for two of the stores in Bangalore).
Other than the above-mentioned Capital Expenditure, we intend to pursue our growth strategy of
expanding our retail chain through new stores or expansion of existing stores. Pursuant to our strategy
we have entered into a contractual agreement for three store sites, planned for opening in FY2008
Related Party Transactions
For details of related party transactions, please refer to the section entitled “Related Party Transactions”
on page 168 of this draft Red Herring Prospectus.
Financial Market Risks
Quantitative and Qualitative Disclosures about Market Risk
We are exposed to financial market risks from changes in interest rates and inflation
Interest rate risk
Our interest rate risk results from changes in interest rates, which may affect our financial expenses. We
bear interest rate risk with respect to indebtedness as on March 31, 2004 as the interest rate could vary
in the near future. Though all our loans are currently fixed, they are subject to review by both parties at
the end of every financial year. Any rise in interest rates could have our lenders push higher rates of
interest on the loans.
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