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

Setting up of new stores
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,
338,470
Hyderabad
# 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).
Setting up additional stores will help us expand our reach and serve additional customers in
existing and new geographies, and help us with our growth plans.
Store Capex & Deposits for Store Sites
We intend to enter into definitive long-term lease, leave and license, conducting or other arrangement
with the developers / property owners for the all planned new stores. We have already entered into
preliminary contractual arrangements with the developers / property owners for 7 out of the planned 11
new stores and paid them earnest moneys aggregating to Rs. 22.82 mn as on July 31, 2004. The
remaining three locations have been identified and agreements will be signed in due course.
Since we do not own any of the premises in which our stores are located, but take them on various
arrangements, deposits are payable by us on entering into the commercial arrangement with the
developers / property owners.
We estimate the total fund requirement including store deposits on our proposed 11 stores at Rs. 1,125
Million. Store capex includes electricals, lighting, air conditioning, interiors, furniture, fixtures, security
systems, in-store IT systems, display equipment and other establishment related expenses. We enter into
contracts with vendors for the supply of the same a few months before we expect the property to be
handed over to us to operate our stores. Since these are standard equipment available from various
vendors in India and overseas, we foresee no difficulty in sourcing the same even at a short notice.
We have incurred an amount of Rs 14.93 mn as on July 31, 2004 on our store capex.
Renovation and expansion of our existing stores
We intend to renovate our existing stores at Andheri (Mumbai), Bangalore and Delhi and expanding our
existing stores at Andheri (Mumbai) and Bangalore at an estimated capital outlay of Rs 156 mn. This
would include expenses on in-store electricals, lighting, air conditioning, interiors, furniture, fixtures,
security systems, in-store IT systems, display equipment civil work and other establishment related
expenses. Since these are standard equipment available from various vendors in India and overseas, we
foresee no difficulty in sourcing the same even at a short notice.
We have entered into agreements to get additional space aggregating 11,585 sq ft for expansion of our
existing stores at Bangalore and have paid an amount of Rs 1.53 mn as deposits to the property owners.
We have also incurred an amount of Rs 4.41 mn on the capex on renovation and expansion of our stores
as on July 31, 2004.
Definitive agreements for additional space for the expansion of our stores at Andheri (Mumbai) are yet to
be executed with our Promoters from whom we intend taking such additional space.
Renovation of some of our existing stores will help us enhance customer interest by providing them a
new look and enhanced shopping experience. Expansion of the stores will help us enhance our range of
offerings by providing us additional space.
We have incurred Rs 5.94 mn on our proposed expansion and renovation plans as outlined under our
Objects of the Issue till July 31, 2004 from our internal accruals. Our statutory Auditors, M/s Deloitte,
Haskins and Sells, have certified the amount spent till July 31, 2004 vide their certificate dated August 6,
2004.
General Corporate Purposes including strategic initiatives and acquisitions
We seek to further enhance our position as a leading Indian retailer. In addition to continued investments
in expansion of our retail chain, we intend to enhance our capabilities and address gaps in Indian retail
industry, technical expertise, further develop and expand our IT infrastructure to support our retail chain
and category expansion through new product offerings, strategic acquisitions, investments or joint
ventures. We also plan to continue investing in and developing the “Shoppers’ Stop” brand in Indian retail
industry.
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