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History of Shopper Stop Ltd.

Incorporated as a private limited Comp. on June 16, 1997, we beacme a deemed public limited Comp. on December 8, 1997. Pursuant to an amendment to the Companies Act in the year 2000, our Comp. was converted from a deemed public Comp. to a full fledged public company with effect from October 6, 2003.

Prior to incorporation two of our existing stores at Mumbai and Bangalore were run by a division of Ivory Properties and Hotels Limited [IPHLs] under the brand named Shoppers' Stop. Soon after our incorporation, IPHL executed a conducting agreement with us dated November 3, 1997 giving us a right to participate in running the departmental stores which included the right to use [is] the Mumbai Shopper Stop property [iis] the Bangalore Shoppers' Stop property [iiis] the agreements & arrangements with various parties relating to purchases, sales, franchises & co-sponsorship [ivs] the brands developed [vs] the diverse modes of rendering services to the customers [vis] the data bank of Shopper Stop, the membership of First citizen Club etc; [viis] the software, various systems & training programmes [viiis]books & cassettes providing knowledge for retail trade, [ixs] the business sport systems & [xs] the names of stores and logos of stores.

This agreement was terminated & a fresh Conducting Agreement was executed with IPHL dated March 31, 2000.

IPHL signed a Deed of Assignment dated March 31, 2000 with us for transferring the ownership of certain trademarks, trade names, goodwill and brand names in our favour known as SHOPPER' STOP [labels], STUDIO KRT [labels], STOP [label with color schemess]STOP[devices], STOP[labels], FIRSTCITIZENS'CLUB, BLUESBIZAAR, BLUES BIZARRE, BLUESBIZAR [word & labels] BLUES BIZAAR [word and complete labels] i[in-house brands], i[in-house brands], B [in-house brands].

Out of various trademarks under which we presently market our in-house products only six are registered in our name. Three of the trademarks we presently market some of our in-house products are registered in the name of our Promoter, Ivory Properties & Hotels Pvt. limited & applications are yet to be made to register them in the name of our Company. For the rest, applications for registration of these trademarks in the name of our Comp. have been submitted to the relevant trademark authorities & are still pending with them.

We initially acquired 790 equity shares of Rs 100 each in UTL from some of the existing shareholders & increased our stake in the Comp. to 1265 Equity Shares [25.3% of equity capitals] on March 23, 1999 at a purchase price of Rs.100 per share. UTL was a trading company, & was one of our suppliers for garments & accessories. We enhanced our stake in UTL to 100% in February 2000.

UTL has discontinued its trading operations from January 2003. UTL handles our distribution & logistic function since February 2000 and now operates through four distribution centers located in Mumbai, Bangalore, New Delhi & Kolkata.

Shoppers' Stop Services [Indias] Ltd was incorporated as our wholly owned subsidiary in March 2000 to provide shared services and consultation, in accounting & logistics operations. Currently, this subsidiary has limited operations.

Shoppers' Stop.Com [Indias] Ltd was incorporated in February 2000 as our wholly owned subsidiary to provide on-line shopping facilities to our customers. As this venture did not yield desired results, its operations were discontinued in February 2001.

Profound Readers' Choice Trading [Indias] Ltd was incorporated in November 1999 as our subsidiary & acquired `Crossword', a chain of books & music stores, from India Book House Ltd [IBHLs] under trademark & style of Crossword, as a going concern by way of slump sale on March 31, 2000. The Crossword Division from IBHL was acquired at a purchase consideration of Rs.137.5 mn for whole of the acquired business undertaking. The Deeds of Assignment between IBHL and Profound Readers' Choice Trading [Indias] Ltd were signed on March 31, 2000 and July 5, 2000 for assignment of trademarks of Crossword.

Profound Readers' Choice Trading [Indias] Ltd changed its name to Crossword Bookstores Ltd [Crosswords] & has ICICI Trusteeship Services Ltd a/c ICICI Emerging Sectors Fund as it equity investor holding 49% of its equity, & is governed by a separate shareholders' agreement.

Milestones of Our Business

Year Events

1991 IPHL opened its first Shoppers' Stop store selling men wear at Andheri [Mumbais]

1992 Ladies section added

1993 Children & non apparel accessories sections added

Disney carnival organized, with official Disney characters [Mickey, Minnie, Donald & Goofys] participating, In house Retail Management Trainee Programme started

1994 First Citizen Club loyalty card launched

1995 Second store opened [Bangalores]

1996 Festival of Britain celebrated in association with the Commercial Department of British Consulate

1997 Shopper Stop Limited was incorporated on June 16

1997 Festival of Indian tradition & culture,`Parikrama', launched Co-branded credit card launched for FCC members in partnership with HSBC

1998 Third store opened [Hyderabads], the then largest with 72,287 sq. ft of retail area SSL co-opted as India only member to the Intercontinental Group ot Department Stores [IDGSs]

1999 Implemented JDA Retail ERP [a global leader in retail ERP packagess] Fourth & Fifth stores launched [Jaipur and Delhis]

2000 Sixth and Seventh stores opened [Chennai and Chembur, Mumbais]

Placed equity with external investors to raise Rs 600 mn

Acquired Crossword, one of India leading book retailing chain, from India Book House in partnership with ICICI Trusteeship Services Limited [A/c ICICI Emerging Sectors Funds]

2001 Implemented Warehousing Module of JDA, Auto Replenishment & Auto Purchase Order system & business to business connectivity

Eight & Ninth store launched [Pune and Bandra, Mumbais]

Profit Linked Reward System [PLRSs] introduced [or all employees

2002 Tenth store opened [Kandivali, Mumbais]

2003 Received various industry awards from CMAI [including Best Retailer of Years] & from Nasscom [Best IT Practice in Retail Categorys] Signed Austin Reed licence for men outerwear for India exclusively Three stores launched taking the total number of stores to 13 [Mulund, Mumbai, Gurgaon & Kolkatas]

2004 Fourteenth, fifteenth & sixteenth stores launched in February 2004 [Malad, Mumbais], June 2004 [Salt Lake City, Kolkattas] & October 2004 [Bangeratta Bangalores] respectively taking total retail area to 752,848 sq ft Received Superbrand status for 2003 & 2004

Received Images Retail award for 'Most favoured retail destination of year' - September, 2004

Received the 'Organization With Innovative HR Practices' award at the HR Excellence Awards organized by Mid-Day, Big Break and Daks - November 2004

Reveived Top retailer 2004 India Bronze award given by Retail Asia-Pacific Top 500 awards

Auditor Qualifications': Statutory Auditor 'Deloitte Haskins and Sells' vide its report dated February 23, 2005 has mentioned the following qualification in respect of operations of Upasna Trading Limited which is being reproduced from their report as follows:

[is] The operations of Upasna, a 100% subsidiary of SSL are entirely dependent on SSL & SSL is committed to provide the necessary level of financial support to Upasna to enable it to operate & pay its debts, if required. We are informed that management plans to enhance Upasna's role in the distribution & logistics operations of group companies and it will therefore be able to repay SSL dues in the near future. Of the Rs.39.30 million & Rs.39.84 million outstanding as at 30 November 2004 & 31 March 2004 respectively, Rs.26.42 million and Rs.25.30 milion respectively, had been advanced to meet certain disputed liabilities which have been paid by Upasna under protest and SSL has correspondingly included such amounts under contingent liabilities, [see note 2 in Annexure III [as]]. In respect of the balance of Rs. 12.88 million & Rs. 14.54 million respectively, since the impact of non-recovery, if any, can't be quantified the Summary Statements [Annexures i [as] & II [as]] have not been adjusted.

For further details, please refer to section 'Consolidated Financial Information' in this Red Herring Prospectus.

Our corporate structure:

Our existing corporate structure is as under:

Shopper Stop Ltd

Crossword Upasna Shopper Stop.Com Shopper Stop Bookstores limited Trading limited [Indias] limited Services [Indias] Ltd

51%* 100% 100% 100%

* An agreement dated February 28, 2005 has been entered into between Shoppers Stop, ICICI Trusteeship Services limited [in its capacity as trustee of ICICI Emerging Sectors Fund a scheme of ICICI Emerging Sectors Trust/Mutual Funds] [hereinafter 'ICICI's] & Crossword Bookstores Limited. Pursuant to the provisions of said agreement our Comp. has agreed to purchase 4685625 equity shares of Crossword from ICICI not later than June 30, 2005. Pursuant to clause 4 of the said agreement in the event that the sale & purchase of the abovmentioned shares is not completed by June 30, 2005 [unless otherwise extended by mutual consents] the said agreement shall terminate & cease to have effect.

2005

-Shoppers' Shop has fixed the price band for its maiden public offer of 69.46 lakh shares between Rs 210 & Rs 250 per share. The issue is slated to open on April 27 & close on May 3. This price band allows the Comp. to raise a maximum of Rs 173 crore. Post-issue, the promoters' stake would touch around 67 per cent from the existing 79.75 per cent holding. The book-running lead managers are Enam Financial Consultants Pvt Ltd, JM Morgan Stanley Pvt Ltd, Kotak Mahindra Capital Comp. Ltd, ICICI Securities Ltd & co-book running manager is IL&FS Investmart Ltd.

-The IPO of Shopper Stop is oversubscribed by 5.3 times on the first day of offer, with bids received for 3.04 crore shares as against 57.6 lakh shares on offer in the price band of Rs 210 to Rs 250.

- The Shoppers' Stop IPO, which began on April 28 & closed on May 4, is subscribed 8.6 times.

- Shoppers' Stop scrip made a sparkling debut on the bourses on May 23. The counter closed at Rs 372.60 on the Bombay Stock Exchange [BSEs], 56.60 per cent higher than its issue price of Rs 238. The counter opened at Rs 335 on the BSE a 40.9 per cent premium over the issue price.

-Shoppers Stop enters into franchisee agreement with Mothercare PLC, UK

-Shoppers' Stop sets up new outlet in Bangalore