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

an item from the concession store. The Company in turn sells the item to the customer and is
accordingly included under Retail Sales.
The property in the merchandise of third party consignment stock does not pass to the Company.
Since, however, the sale of such stock forms a part of the Gross Retail Turnover of the Company's
stores, the gross sales values and the cost of the merchandise are displayed separately in the Profit
and Loss Account.
The Company also displays, separately, “Gross Retail Turnover” in the Profit and Loss Account so
as to indicate gross volume of business and operations.
In respect of gift vouchers and point award schemes operated by the Company, sales are
recognised when the gift vouchers or points are redeemed and the merchandise is sold to the
customer.
Revenue from store displays and sponsorships are recognised based on the period for which the
products or the sponsor’s advertisements are promoted/displayed. Facility management fees are
recognised pro-rata over the period of the contract.
f) Inventories
Inventories are valued at the lower of cost and net realisable value. Cost of inventories comprise of
all costs of purchase incurred in bringing the inventories to their present condition and location. Cost
is determined by the weighted average cost method.
Merchandise received under consignment and concessionaire arrangements belong to the
consignors/ concessionaires and are therefore excluded from the Company’s inventories.
g) Retirement benefits
Retirement benefits to employees comprise of gratuity, provident fund contributions and leave
encashment entitlements. Retirement benefit costs are expensed to revenue, as incurred.
The Company's employees are covered under the group gratuity scheme with the Life Insurance
Corporation of India ('LIC'). This scheme is a defined benefit scheme and is funded in line with the
LIC’s yearly actuarial valuation.
Contributions to the provident fund, a defined contribution scheme, are made in accordance with the
rules of the fund.
Liability for leave encashment, a defined benefit scheme, is provided for based on an actuarial
valuation carried out by an independent actuary at the year-end.
h) Foreign currency transactions
Foreign currency transactions are recorded at the exchange rates prevailing on the date of the
transaction. Foreign currency assets and liabilities (except those covered by forward contracts) are
translated into Indian Rupees at the exchange rate prevailing at the balance sheet date. All
exchange differences are dealt with in the Profit and Loss Account, except those relating to the
acquisition of fixed assets, which are adjusted to the carrying cost of the related fixed asset.
i) Income Tax
Income taxes are accounted for in accordance with Accounting Standard 22 on “Accounting for
Taxes on Income”. Taxes comprise both current and deferred tax.
Current tax is measured at the amount expected to be paid/recovered from the taxation authorities,
using the applicable tax rates and tax laws.
The tax effect of the timing differences that result between taxable income and accounting income
and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset
or deferred tax liability. They are measured using the substantively enacted tax rates and tax
regulations. The carrying amount of deferred tax assets at each balance sheet date is reduced to the
extent that it is no longer reasonably certain that sufficient future taxable income will be available
against which the deferred tax asset can be realised.
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