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

Effect of Inflation
In line with changing inflation rates, we alter our margins to absorb the inflationary impact.
Information required as per Clause 6.8 of SEBI Guidelines
1. Unusual or infrequent events or transactions
The following events/transactions were infrequent:
1) Write off relating to Shoppers Stop Services (India) Ltd FY 2002 amounting to Rs0.5 mn and
Rs.3.5mn relating to Shoppers Stop .Com (India) Ltd.
2) Write off in FY 2004 relating to Shoppers Stop .Com (India) Ltd and Upasna Trading Ltd amounting
to Rs. 1 mn.
3) Write back of liability towards expired gift vouchers in FY 2002 of Rs. 7 mn
4) Refund of Sales Tax in FY 2002 of Rs.5 mn
2. Option Agreement
We have an option to acquire upto 51% of the equity share capital of Rainbow Retail Private Limited,
which has been set up to venture into food and value retailing. For further details please refer to
section titled “Our Business” on page no_45 of this draft Red Herring Prospectus.
3. Known trends or Uncertainties
Other than as described elsewhere in this draft Red Herring Prospectus, to the best of our
knowledge, there are no known trends or uncertainties that have or had or are expected to have a
material adverse impact on revenue or income of the Company from continuing operations.
4. Future relationship between costs and income
We are continuously working to create efficient processes resulting in cost reduction and have a
better control over our supply chain. We expect to continue this effort of improving our technology
initiatives and try and realise better margins in the future.
Other than as described elsewhere in this draft Red Herring Prospectus, to the best of our
knowledge, there are no known factors, which will affect the future relationship between the costs
and income, or which will have a material impact on the operations and finances of the Company.
5. Turnover for the industry segment in which we operate.
Please refer to the discussions in the paragraphs entitled “Industry Overview” in this draft Red
Herring Prospectus on page 31
6. New Products or business segments
We are in the business of selling aspirational products and thus have only one segment of operation.
We believe that the department store format offers significant opportunities in the country with the
changing consumer aspirations and drive for a better lifestyle. We believe that a younger population
with higher disposable income would drive customer aspirations for lifestyle products.
We are thus focused on the Indian markets in the department store format. At the same time, we
consistently evaluate other opportunities and may look at alternative delivery formats or product
categories should we find the opportunity compelling or to strengthen our existing format.
Our growth strategy is based on:
1. Increasing our penetration in existing cities and expanding our reach across our country.
2. Furthering Shoppers’ Stop as an experiential retail brand through unique national and
international promotions
3. Enhancing our merchandise width by adding product categories
4. Introducing new brands and developing private labels to offer a better depth in each
category
5. Increasing our First Citizen base
6. Utilising economies of scale as we grow in size and expand our reach
7. Enhancing our operational efficiencies
8. Enhancing our human capital
155