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

effective ownership control is retained. Sales include amounts recovered towards sales tax, as
applicable, and are net of sales returns and discounts.
In respect of gift vouchers and point award schemes operated by the company, Sales are recognised
when the gift voucher or points are redeemed and merchandise is sold to the customer. Franchisee
income is recognised in accordance with the rates specified in the franchisee agreements and based
on the sales recorded by the franchisees for the year.
(f) Retirement benefits:
Retirement benefits to employees comprise payments to provident fund and gratuity. Retirement
benefit costs are expensed to revenue as incurred. Annual contributions to the provident fund, a
defined contribution scheme, are made as per the rules of the fund. The company participates in the
group gratuity cum life assurance scheme administered by Life Insurance Corporation of India (LIC).
The scheme is funded in accordance with LIC’s yearly actuarial valuation.
(g) Miscellaneous expenses:
Miscellaneous expenses comprise start-up costs as incurred for the launch of a new store. These
expenses are amortized equally over a period of three years.
(h) 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.
(i) Contingent Liabilities:
These are disclosed by way of notes on the Balance Sheet. Provision is made in the accounts in
respect of those liabilities, which are likely to materialize after the year end till the finalization of
accounts and have material effect on the position stated in the Balance Sheet.
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