SHOPPERS STOP Share price

OUR HISTORY CORPORATE MATTERS AND EVOLUTIONIncorporated as a private limited company on June 16 1997 we beacme adeemed public limited company on December 8 1997. Pursuant to anamendment to the Companies Act in the year 2000 our Company wasconverted from a deemed public company to a full fledged public companywith effect from October 6 2003.Prior to incorporation two of our existing stores at Mumbai andBangalore were run by a division of Ivory Properties & Hotels Limited(IPHL) under the brand named Shoppers' Stop. Soon after ourincorporation IPHL executed a conducting agreement with us datedNovember 3 1997 giving us a right to participate in running thedepartmental stores which included the right to use (i) the MumbaiShopper's Stop property (ii) the Bangalore Shoppers' Stop property(iii) the agreements and arrangements with various parties relating topurchases sales franchises and co-sponsorship (iv) the brandsdeveloped (v) the diverse modes of rendering services to the customers(vi) the data bank of Shopper's Stop the membership of the Firstcitizen's Club etc; (vii) the software various systems and trainingprogrammes (viii)books and cassettes providing knowledge for retailtrade (ix) the business sport systems and (x) the names of the storesand logos of the stores.This agreement was terminated and a fresh Conducting Agreement wasexecuted with IPHL dated March 31 2000.IPHL signed a Deed of Assignment dated March 31 2000 with us fortransferring the ownership of certain trademarks trade names goodwilland brand names in our favour known as SHOPPER' STOP (label) STUDIOKRT (label) STOP (label with color schemes)STOP(device) STOP(label)FIRSTCITIZENS'CLUB BLUESBIZAAR BLUES BIZARRE BLUESBIZAR (word &label) BLUES BIZAAR (word & complete label) i(in-house brand)i(in-house brand) B (in-house brand).Out of the various trademarks under which we presently market ourin-house products only six are registered in our name. Three of thetrademarks we presently market some of our in-house products areregistered in the name of our Promoter Ivory Properties and HotelsPvt. Ltd. and applications are yet to be made to register them in thename of our Company. For the rest applications for the registrationof these trademarks in the name of our Company have been submitted tothe relevant trademark authorities and are still pending with them.We initially acquired 790 equity shares of Rs 100 each in UTL from someof the existing shareholders and increased our stake in the company to1265 Equity Shares (25.3% of the equity capital) on March 23 1999 at apurchase price of Rs.100 per share. UTL was a trading company and wasone of our suppliers for garments and accessories. We enhanced ourstake in UTL to 100% in February 2000.UTL has discontinued its trading operations from January 2003. UTLhandles our distribution and logistic function since February 2000 andnow operates through four distribution centers located in MumbaiBangalore New Delhi and Kolkata.Shoppers' Stop Services (India) Ltd was incorporated as our whollyowned subsidiary in March 2000 to provide shared services andconsultation in accounting and logistics operations. Currently thissubsidiary has limited operations.Shoppers' Stop.Com (India) Ltd was incorporated in February 2000 as ourwholly owned subsidiary to provide on-line shopping facilities to ourcustomers. As this venture did not yield desired results itsoperations were discontinued in February 2001.Profound Readers' Choice Trading (India) Ltd was incorporated inNovember 1999 as our subsidiary and acquired `Crossword' a chain ofbooks and music stores from India Book House Ltd (IBHL) undertrademark and style of Crossword as a going concern by way of slumpsale on March 31 2000. The Crossword Division from IBHL was acquiredat a purchase consideration of Rs.137.5 mn for the whole of theacquired business undertaking. The Deeds of Assignment between IBHL andProfound Readers' Choice Trading (India) Ltd were signed on March 312000 & July 5 2000 for assignment of trademarks of Crossword.Profound Readers' Choice Trading (India) Ltd changed its name toCrossword Bookstores Ltd (Crossword) and has ICICI Trusteeship ServicesLtd a/c ICICI Emerging Sectors Fund as it's equity investor holding 49%of its equity and is governed by a separate shareholders' agreement.Milestones of Our BusinessYear Events1991 IPHL opened its first Shoppers' Stop store selling men's wear at Andheri (Mumbai) 1992 Ladies section added1993 Children and non apparel accessories sections added Disney carnival organized with official Disney characters (Mickey Minnie Donald and Goofy) participating In house Retail Management Trainee Programme started1994 First Citizen Club loyalty card launched1995 Second store opened (Bangalore)1996 Festival of Britain celebrated in association with the Commercial Department of the British Consulate 1997 Shopper's Stop Limited was incorporated on June 161997 Festival of Indian tradition and culture`Parikrama' launched Co-branded credit card launched for FCC members in partnership with HSBC 1998 Third store opened (Hyderabad) the then largest with 72287 sq. ft of retail area SSL co-opted as India's only member to the Intercontinental Group ot Department Stores (IDGS)1999 Implemented JDA Retail ERP (a global leader in retail ERP packages) Fourth and Fifth stores launched (Jaipur & Delhi)2000 Sixth & Seventh stores opened (Chennai & Chembur Mumbai) Placed equity with external investors to raise Rs 600 mn Acquired Crossword one of India's leading book retailing chain from India Book House in partnership with ICICI Trusteeship Services Limited (A/c ICICI Emerging Sectors Fund)2001 Implemented Warehousing Module of JDA Auto Replenishment and Auto Purchase Order system and business to business connectivity Eight and Ninth store launched (Pune & Bandra Mumbai) Profit Linked Reward System (PLRS) introduced (or all employees2002 Tenth store opened (Kandivali Mumbai)2003 Received various industry awards from CMAI (including Best Retailer of the Year) and from Nasscom (Best IT Practice in Retail Category) Signed Austin Reed licence for men's outerwear for India exclusively Three stores launched taking the total number of stores to 13 (Mulund Mumbai Gurgaon and Kolkata) 2004 Fourteenth fifteenth and sixteenth stores launched in February 2004 (Malad Mumbai) June 2004 (Salt Lake City Kolkatta) and October 2004 (Bangeratta Bangalore) respectively taking total retail area to 752848 sq ft Received Superbrand status for 2003 and 2004 Received Images Retail award for the "Most favoured retail destination of the year" - September 2004 Received the "Organization With Innovative HR Practices" award at the HR Excellence Awards organized by Mid-Day Big Break & Daks - November 2004 Reveived Top retailer 2004 India Bronze award given by Retail Asia-Pacific Top 500 awardsAuditor Qualifications': Statutory Auditor "Deloitte Haskins & Sells"vide its report dated February 23 2005 has mentioned the followingqualification in respect of operations of Upasna Trading Limited whichis being reproduced from their report as follows:(i) The operations of Upasna a 100% subsidiary of SSL are entirelydependent on SSL and SSL is committed to provide the necessary level offinancial support to Upasna to enable it to operate and pay its debtsif required. We are informed that management plans to enhance Upasna'srole in the distribution and logistics operations of group companiesand it will therefore be able to repay SSL's dues in the near future.Of the Rs.39.30 million and Rs.39.84 million outstanding as at 30November 2004 and 31 March 2004 respectively Rs.26.42 million andRs.25.30 milion respectively had been advanced to meet certaindisputed liabilities which have been paid by Upasna under protest andSSL has correspondingly included such amounts under contingentliabilities [see note 2 in Annexure III (a)]. In respect of thebalance of Rs. 12.88 million and Rs. 14.54 million respectively sincethe impact of non-recovery if any cannot be quantified the SummaryStatements [Annexures I (a) and II (a)] have not been adjusted.For further details please refer to section "Consolidated FinancialInformation" in this Red Herring Prospectus.Our corporate structure:Our existing corporate structure is as under: Shopper's Stop LtdCrossword Upasna Shopper's Stop.Com Shopper's Stop Bookstores Ltd. Trading Ltd. (India) Ltd. Services (India) Ltd51%* 100% 100% 100%* An agreement dated February 28 2005 has been entered into betweenShoppers Stop ICICI Trusteeship Services Ltd. (in its capacity astrustee of ICICI Emerging Sectors Fund a scheme of ICICI EmergingSectors Trust/Mutual Fund) (hereinafter "ICICI") and CrosswordBookstores Limited. Pursuant to the provisions of the said agreementour Company has agreed to purchase 4685625 equity shares of Crosswordfrom ICICI not later than June 30 2005. Pursuant to clause 4 of thesaid agreement in the event that the sale and purchase of theabovmentioned shares is not completed by June 30 2005 (unlessotherwise extended by mutual consent) the said agreement shallterminate and cease to have effect.