MIRA INFORM REPORT

Report Date :

23.07.2011

IDENTIFICATION DETAILS

Name :	BENETTON INDIA PRIVATE LIMITED (w.e.f. 04.08.2005)
Formerly Known As :	BENETTON INDIA LIMITED (w.e.f. 03.06.2005) DCM BENTTON INDIA LIMITED
Registered Office :	Plot No. 25, Block B, Infocity, Sector 34, Gurgaon-122001, Haryana
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	18.09.1992
Com. Reg. No.:	05-035893
Capital Investment/ Paid-up Capital:	Rs. 2600.000 Millions
CIN No.: [Company Identification No.]	U74899HR1992FTC035893
Legal Form :	Private Limited Liability Company.
Line of Business :	Manufacturer and Market Clothes and Accessories.
No. of Employees:	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (26)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 5800000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having moderate track. There appears a huge accumulated losses recorded by the company. However, trade relations are reported as fair. Business is active. Payments are reported to be slow. The company can be considered for business dealings with some caution.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered/ Corporate Office :	Plot No. 25, Block B, Infocity, Sector 34, Gurgaon-122001, Haryana, India
Tel. No.:	91-124-4323333
Fax No.:	91-124-4323400- 01
E-Mail :	r.kapoor@benetton.co.in s.mohanty@benetton.co.in

DIRECTORS

As on 30.09.2010

Name :	Mr. Sanjeev Mohanty
Designation :	Managing Director
Address :	House No. 0056, Block ES, Nirvana Country, Gurgaon, Haryana, India
Date of Birth/Age :	04.05.1971
Date of Appointment :	01.05.2007
DIN No.:	01608575
Name :	Mr. Sameer Chhibber
Designation :	Director appointed in casual vacancy
Address :	B 704, 7^th Floor, Sector 43, Sanskriti, Near Amiuty Internationl School, Gurgaon-122015, Haryana, India
Date of Birth/Age :	06.10.1969
Date of Appointment :	30.12.2008
DIN No.:	02519824
Name :	Mr. Alberto Nathansohm
Designation :	Director appointed in casual vacancy
Address :	Delgi Scipioni N. 126, Roma, Italy
Date of Birth/Age :	04.10.1957
Date of Appointment :	30.06.2009
DIN No.:	02722723
Name :	Mr. Bliagio Chiarolanza
Designation :	Director appointed in casual vacancy
Address :	Via Enrico Mattei 18 31027, Spresiano- Treviso (Italy)
Date of Birth/Age :	17.07.1962
Date of Appointment :	04.06.2010
DIN No.:	00678993
Name :	Mr. Gerolamo Caccia Dominioni
Designation :	Director
Address :	Piazza S Ambrogi N, 16, Milano, Italy
Date of Birth/Age :	09.01.1955
Date of Appointment :	30.12.2008
Date of Ceasing:	04.06.2010
DIN No.:	02520157

KEY EXECUTIVES

Name :	Mr. Rohit Kappor
Designation :	Company Secretary
Address :	150, Sukhdev Vihar, Mathura Road, New Delhi-110025, India
Date of Birth/Age :	17.09.1970
Date of Appointment :	04.05.2007

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2010

Names of Shareholders	No. of Shares
Benetton International SA, Luxembourg	289999950
Bencom SRL, Italy	10
Bening Spa, Italy	10
Bentec Spa, Italy	10
Soieta Investimentie Gestioni Immobilari SRL, Italy	10
Benetton Group Spa, Italy	10
Total	290000000

Equity Share Breakup (Percentage of Total Equity)

As on 30.09.2010

Category	Percentage
Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Market Clothes and Accessories.

Products :

Product Description	ITC Code
T- Shirt	6109
Woven Shirt	6205
Readymade garments	--

Brand Names :

• ‘UNITED COLOUR OF BENETTON’
• ‘012 BENETOON’
• ‘SISTEY’
• ‘PLAYLIFE’

PRODUCTION STATUS AS ON (31.03.2010)

Particulars	Unit	Actual Production
Manufactured garments (knitted)	Pieces	1312586

GENERAL INFORMATION

Bankers :

Not Available

Facilities :

Unsecured Loans	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions
From Banks
Working Capital Loan Short term	317.500	507.500
Cash Credits	148.780	287.608
Total	466.280	795.108
Note: Coverd by Letters of comfort provided by Bentton Group S.P.A. Italy

Banking Relations :	--
Auditors :
Name :	Price Waterhouse and Company Chartered Accountant
Address :	Building 8, 7^th and 8^th Floor, Tower-B, DLF Cyber City, Gurgaon-122002, Haryana, India
Ultimate Holding Company:	Benetton Group S.P.A., Italy
Holding Company :	Benetton International SA, Luxembourg
Fellow Subsidiaries :	Bencom S.r.l Benind S.P.A Benetton Asia Pacific Limited Bentec S.P.A. United Colors Communications S.P.A. Benetton Trading Taiwan Limited Shanghai Bentton Trading Company Limited Benetton Australia Benetton Mexico

CAPITAL STRUCTURE

As on 30.09.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
360000000	Equity Shares	Rs. 10/- each	Rs. 3600.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
290000000	Equity Shares	Rs. 10/- each	Rs. 2900.000 Millions

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
360000000	Equity Shares	Rs. 10/- each	Rs. 3600.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
260000000	Equity Shares	Rs. 10/- each	Rs. 2600.000 Millions

Note:

Out of above 259999940 shares are held by the Holding Company Benetton International S.A. Luxumbourg (Previous year 219999940 shares and 10 shares are held by the Ultimated Holding Company. Benetton Group S.P.A. Previous year 10 shares.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		2600.000	2200.000	929.241
2] Share Application Money		0.000	0.000	823.759
3] Reserves & Surplus		0.000	0.000	0.000
4] (Accumulated Losses)		[1151.845]	[749.647]	[380.015]
NETWORTH		1448.155	1450.353	1372.985
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.202
2] Unsecured Loans		466.280	795.108	619.090
TOTAL BORROWING		466.280	795.108	619.292
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		1914.435	2245.461	1992.277
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1060.376	1159.217	962.447
Capital work-in-progress		13.871	19.607	25.039
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	493.989	786.084	616.989
	Sundry Debtors	955.102	792.315	394.318
	Cash & Bank Balances	44.987	69.644	246.533
	Other Current Assets	76.693	120.317	79.360
	Loans & Advances	579.402	589.870	445.029
Total Current Assets		2150.173	2358.230	1782.229
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	801.627	893.599	512.738
	Other Current Liabilities	316.202	281.012	215.449
	Provisions	192.156	116.982	49.251
Total Current Liabilities		1309.985	1291.593	777.438
Net Current Assets		840.188	1066.637	1004.791
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1914.435	2245.461	1992.277

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Turnover	363.483	3038.206	2261.232
		Other Income	3.485	18.312	25.037
		TOTAL	366.968	3056.518	2286.269
Less	EXPENSES
		Cost of Goods Sols		1477.239	1197.938
		Personnel Expenses		190.557	138.502
		Operating Expenses		952.813	663.218
		Selling and Distribution Expenses	389.732	583.486	362.465
		Impairment Loss		23.804	0.000
		Borrowing costs		83.935	41.978
		TOTAL	389.732
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		[22.764]	[255.316]	[117.832]
Less/ Add	DEPRECIATION/ AMORTISATION		17.456	109.440	70.093
	PROFIT BEFORE TAX		[40.220]	[364.756]	[187.925]
Less	TAX		[0.100]	4.876	4.645
	PROFIT AFTER TAX		[40.120]	[369.632]	[192.570]
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		[74.965]	[380.015]	[185.941]
Less	Transitional Adjustment for Employee benefits as at April 1, 2007		0.000	0.000	[1.505]
	BALANCE CARRIED TO THE B/S		[115.085]	[749.647]	[380.015]
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	254.534	366.098	199.350
		Commission Income	87.861	107.500	108.728
	TOTAL EARNINGS		342.395	473.598	308.078
	IMPORTS
		Raw Materials	8.020	12.526	3.086
		Bought out finished good and accessories	167.660	265.622	208.786
		Capital Goods	4.877	10.984	66.768
	TOTAL IMPORTS		180.557	289.132	278.640
	Earnings Per Share (Rs.)		[0.15]	[1.98]	[2.56]

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	[10.93]	[12.09]	[8.43]
Net Profit Margin (PBT/Sales)	(%)	[11.07]	[12.01]	[8.31]
Return on Total Assets (PBT/Total Assets}	(%)	[1.25]	[10.37]	[6.85]
Return on Investment (ROI) (PBT/Networth)		[0.03]	[0.25]	[0.14]
Debt Equity Ratio (Total Liability/Networth)		1.23	1.44	1.02
Current Ratio (Current Asset/Current Liability)		1.64	1.83	2.29

LOCAL AGENCY FURTHER INFORMATION

Note:

The Registered office of the company has been shifted from 7^th Floor, Tower-A, Infinity Towers DLF Cyber City, Phase-II, Gurgaon, Harana, India to present address w.e.f. 19.01.2009

Background:

Subject (formerly known DCM Benetton India Limited) )(‘the company’) was incorporated in India on September 18, 1992 to manufacture and market clothes and accessories under the brand names ‘United Colour of Benetton’ ‘012 Benetton’, ‘Sistey’, ‘Zero Tondo’ and ‘Playlife’

The name of the company was changed to Benetton India Limited on June 3^rd 2005 and was subsequently converted into a private limited company on 4^th August 2005 and the name of the company was changed to Benetton India Private Limited

Operations:

The company has completed yet another significant year in which it has and has been aggressively implementing the policy of opening the retail outlets across India to spread its retail operations notwithstanding the overall economic recession in the world.

The company has also been under tremendous pressure due to global economic crisis. However, due to sincere efforts and focused approach and changing the business model to wholesale operations, the company has been able to achieved sustained growth in terms of Turnover. The change in the business model is expected to bring more operational efficiency resulting in achieving economies of scale.

The company has for the year ended 31^st March, 2010 achieved a sales revenue of Rs. 3643.830 Millions as compared to Rs. 3038.210 Millions, an appreciable increase of approximately 20% over the corresponding sales of the previous year.

However, the company has booked a loss of Rs. 402.200 Millions during this year. This loss is after absorbing depreciation, borrowings cost, and lease equalization, provisions for bad debts impairment.

Till the date of this Report, the company has opened 39 new shops throughout the length and breadth of the country.

The company is laying emphasis on improving the operating surplus in future by focusing more on higher margins, better pricing, quality of its products, cost reduction and budgeted buying which shall yield increasing returns over the next 1-2 years.

Contingent Liabilities not provided for in respect of:

a) Claim not acknowledged as debts (to the extent quantifiable and ascertainable by the management):

i. Labour disputes Rs. 6.700 Millions (Previous year Rs. 4.850 Millions)

ii. Trade claims under disputes Rs. 4.659 Millions (Previous year Rs. 4.659 Millions)

iii. Claim by telephone department Rs. 2.800 Millions (Previous year Rs. 2.800 Millions)

iv. Stamp Duty under dispute in appeal Rs. 4.150 Millions (Previous year Rs. 4.150 Millions) The company has furnished a bank pursuant to the authorities amounting to Rs. 4.150 Millions Previous year (Rs. 2.350 Millions)

b) Sales Ta Matters Rs. 5.583 Millions (Previous year Rs. 2.627 Millions)

Fixed Assets:

· Building

· Land

· Leasehold Improvements

· Plant and Stationery

· Office Equipments

· Computer

· Furniture and Fixture

· Vehicles

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.38
UK Pound	1	Rs.72.34
Euro	1	Rs.63.87

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	2
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	2
--CREDIT LINES	1~10	2
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		26

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.