MIRA INFORM REPORT

Report Date :

28.07.2014

IDENTIFICATION DETAILS

Name :	MARKS AND SPENCER RELIANCE INDIA PRIVATE LIMITED (w.e.f.17.06.2008)
Formerly Known As :	TAPTI TRADING PRIVATE LIMITED
Registered Office :	4th Floor, Court House, Lokmanya Tilak Marg, Dhobi Talao, Mumbai – 400002, Maharashtra
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	05.11.2007
Com. Reg. No.:	11-175711
Capital Investment / Paid-up Capital :	Rs. 769.680 Millions
CIN No.: [Company Identification No.]	U51900MH2007PTC175711
TAN No.: [Tax Deduction & Collection Account No.]	MUMM34463C
PAN No.: [Permanent Account No.]	AAFCM5990Dz
Legal Form :	Private Limited Liability Company
Line of Business :	Retailing of Garments and Accessories.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (50)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 9400000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a joint venture between Marks and Spencer PLC (UK) and Reliance Retail. It is an established company having satisfactory track record. Company has incurred loss from its operation in 2013. However, company networth appears to be strong and healthy. Liquidity position seems to be good. Company is operating on its owned funds. Trade relations are reported to be fair. Business is active. Payment terms are reported to be regular and as per commitment. The company can be considered for business dealings at usual trade terms and conditions.

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 – June 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
India	A1	A1

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

INDIAN ECONOMIC OVERVIEW

N E W S

As per the latest IMF study, the total weigh of emerging markets in the GDP of the world on a purchasing power parity basis has seen a sizeable shift. It highlights how as against 51 % in 2005, the emerging economies now account for close to 56 % of the global purchasing power GDP as per the latest survey. And with the emerging economies growing at a faster rate than their developed counterparts, there are every possibility that the their share goes up further in the coming years.  China may surpass the US over the next few years.

Politics and economics are very intricately connected. They tend to influence each other in ways that could be very complex and far-reaching. The prospects of the India’s economy have been seriously compromised due to political corruption. High inflation, poor standard of living are to a great extent a result of rampant corruption in the country. China on the other hand, seems to be facing diametrically opposite challenge. American hedge fund manager Jim Chanos has been keenly following the political and economic development in the dragon economy and has figured out something that is quite worrying. He is of the view that the Chinese economy could be heading toward trouble on account of new Chinese President Xi Jingping’s very aggressive anti-corruption drive. Chanos believes tat many things such as apartment sales, luxury products, etc. were largely bought with dirty money. And it is now beginning to impact consumption. This may indeed be bad news for an economy that is struggling to transition from an investment-driven export-oriented economy to a domestic consumption-driven economy.

A study published by Firstpost has revealed that asset classes like real estate and equities were the biggest beneficiaries of the liberalization policies.  A firm called Ciane Analytics studied returns from assets including equities, gold, fixed deposits, G-Secs and real estate since 1991. Real estate outperformed every other asset classes during the 23-year period with an annualized return of 20 % ! Equities came in second with annualized return of 15.5 % ! However, while these returns may seem mouthwatering, the fact is that the return from equities adjusted for inflation came down to just 7.1 %.

Some brief news are as under

. R-Power to buy Jaypee’s hydro assets

. Investors await justice in NSEL case

. India seeks MFN status from Pakistan ahead of meeting

. Ukrain’s clashes with rebels hinder MH17 crash investigation

. India exploring merger of state-owned hydro PSUs

..Higher costs weigh down profit growth to slowest in 9 quarters

..Wal-Mart to expand wholesale business in India

. GMR group moves to strengthen balance sheet

. Central Bank to sell 4 % stake to Life Insurance Corporation

. Tata Chemicals plans to raise up to Rs 10000 mn.

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

INFORMATION DECLINED

Management Non Cooperative (91-22-67673800)

LOCATIONS

Registered Office :	4th Floor, Court House, Lokmanya Tilak Marg, Dhobi Talao, Mumbai – 400002, Maharashtra, India
Tel. No.:	91-22-67673800
Fax No.:	91-22-44771882
E-Mail :	indu.kardam@marks-and-spencer.in ravi.mediratta@marks-and-spencer.in tarun.tandon@marks-and-spencer.in
Website :	http://www.global.marksandspencer.com http://www.marks-and-spencer.in
Head Office :	Infinity Tower C, Ground Floor, Phase-3, Gurgaon - 122002, Haryana, India

DIRECTORS

AS ON 12.09.2013

Name :

Mr. Venugopal Gopinathan Nair

Designation :

Managing director

Address :

A-103, Purva Fairmont, 24^th and 25^th Cross, HSR Layout, 2^nd Sector, Bangalore – 560034, Karnataka, India

Date of Birth/Age :

10.10.1967

Qualification :

M.BA (Marketing), B. Tech (Mechanical)

Experience :

20 Years

Date of Appointment :

24.07.2012

PAN No.:

ADWPN8580H

DIN No.:

00046163

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U51909KA2005PTC050069	MARKS AND SPENCER (INDIA) PRIVATE LIMITED	Director	16/08/2005	16/08/2005	13/04/2012	Active	NO
2	U51900MH2007PTC175711	MARKS AND SPENCER RELIANCE INDIA PRIVATE LIMITED	Managing director	24/07/2012	16/04/2012	-	Active	NO

Name :

Mr. Rakesh Kumar Gupta

Designation :

Whole-time director

Address :

902, 29 Seawoods Estate, NRI Complex, Nerul, Navi Mumbai – 400706, Maharashtra, India

Date of Birth/Age :

04.11.1963

Date of Appointment :

13.09.2013

DIN No.:

00031074

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U85100MH1998PTC114935	RELIANCE HOSPITAL MANAGEMENT SERVICES PRIVATE LIMITED	Director	14/05/2005	14/05/2005	30/09/2009	Active	NO
2	U23201MH2007PTC168747	RELIANCE BIOFUELS PRIVATE LIMITED	Director	05/09/2008	11/06/2008	29/08/2009	Strike off	NO
3	U24239MH2007PTC168750	RELIANCE DIAGNOSTICS PRIVATE LIMITED	Director	05/09/2008	11/06/2008	29/08/2009	Strike off	NO
4	U51900MH2007PTC175711	MARKS AND SPENCER RELIANCE INDIA PRIVATE LIMITED	Whole-time director	13/09/2013	15/05/2013	-	Active	NO

Name :

Mr. Thomas Owen Mackay

Designation :

Director

Address :

65, Atbara Road, Teddington, Middlesex, United Kingdom TW119PA

Date of Birth/Age :

30.03.1975

Date of Appointment :

13.09.2013

DIN No.:

03010885

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U85110KA1998PTC023830	LOGICA PRIVATE LIMITED	Additional director	31/03/2010	31/03/2010	24/07/2012	Active	NO
2	U51900MH2007PTC175711	MARKS AND SPENCER RELIANCE INDIA PRIVATE LIMITED	Director	13/09/2013	11/12/2012	-	Active	NO

Name :

Johannes Gijsbertus Heere

Designation :

Director

Address :

Apartment 512, 50 Bolsover Street, London, United Kingdom

Date of Birth/Age :

22.04.1970

Date of Appointment :

24.07.2012

DIN No.:

03606664

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U51900MH2007PTC175711	MARKS AND SPENCER RELIANCE INDIA PRIVATE LIMITED	Director	24/07/2012	06/09/2011	Active	NO

Name :

Nicholas Charles Bullock

Designation :

Director

Address :

14 High Road, Ickenham Uxcbridge London UB108LJ United Kingdom

Date of Birth/Age :

25.12.1959

Date of Appointment :

24.07.2012

DIN No.:

05124798

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U51900MH2007PTC175711	MARKS AND SPENCER RELIANCE INDIA PRIVATE LIMITED	Director	24/07/2012	30/11/2011	Active	NO

Name :

Mr. Martin Pascal Denis Jean

Designation :

Alternate director

Address :

House 3, Coral Villas 27 Horizon Drive, Chung Hom Kok, Hong Kong

Date of Birth/Age :

13.06.1960

Date of Appointment :

11.12.2012

DIN No.:

06415604

Name :

Mr. Sriram Srinivasan

Designation :

Director

Address :

354, 6^th Main, I Block, Koramangala, Bangalore – 560034, Karnataka, India

Date of Birth/Age :

02.12.1955

Date of Appointment :

04.08.2011

DIN No.:

00473346

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U51900MH2007PTC175637	RELIANCE-VISION EXPRESS PRIVATE LIMITED	Director	07/07/2010	28/04/2010	Active	NO
2	U51109MH2007PTC176276	RELIANCE-GRANDVISION INDIA SUPPLY PRIVATE LIMITED	Director	07/07/2010	28/04/2010	Active	NO
3	U51900MH2007PTC175711	MARKS AND SPENCER RELIANCE INDIA PRIVATE LIMITED	Director	04/08/2011	08/12/2010	Active	NO
4	U51909MH2006PLC166165	RELIANCE TRENDS LIMITED	Director	04/08/2012	24/03/2012	Active	NO

Name :

Mr. Anurup Singh Pruthi

Designation :

Director

Address :

Flat No. 1202A, 1202B, 1202C, 12^th Floor, Odyssey II Hiranandani Gardens, Powai, Mumbai – 400076, Maharashtra, India

Date of Birth/Age :

24.09.1968

Date of Appointment :

13.09.2013

DIN No.:

06631657

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U51900MH2007PTC175711	MARKS AND SPENCER RELIANCE INDIA PRIVATE LIMITED	Director	13/09/2013	25/07/2013	Active	NO
2	U51109MH2007PTC176276	RELIANCE-GRANDVISION INDIA SUPPLY PRIVATE LIMITED	Additional director	03/10/2013	03/10/2013	Active	NO
3	U51900MH2007PTC175637	RELIANCE-VISION EXPRESS PRIVATE LIMITED	Additional director	03/10/2013	03/10/2013	Active	NO

KEY EXECUTIVES

Name :	Mr. Ravi Mohan
Designation :	Secretary
Address :	C-1/355, C1 Block, Yamuna Vihar, Delhi – 110053, India
Date of Birth/Age :	27.04.1972
Date of Appointment :	15.09.2010
PAN No.:	AGTPM4230H
Name :	Mr. Jatin Luthra
Designation :	Finance Director
Date of Birth/Age :	49 Years
Qualification :	FCA FCS
Experience :	28 Years
PAN No.:	ABBPL4917H
Name :	Luke Banks
Designation :	Head of Buying and Merchandising
Date of Birth/Age :	32 Years
Qualification :	Heriot Watt University, Edinburgh; MSC Fashion Retail Marketing
Experience :	12 Years
Name :	James Munson
Designation :	Head Retail and Marketing
Date of Birth/Age :	34 Years
Experience :	14 Years
Name :	Shalini Naagar
Designation :	Head Human Resources
Date of Birth/Age :	40 Years
Qualification :	Post Graduate, MBA(HR)
Experience :	17 Years
Name :	Maneesh Gaur
Designation :	Head of Property and Projects
Date of Birth/Age :	43 Years
Qualification :	Post Graduate-Hotel Management
Experience :	18 Years

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 12.09.2013

Names of Shareholders	No. of Shares
Reliance Retail Limited*, India	Class A - 1891302 Class C - 71646036
Marks and Spencer International Holdings Limited, United Kingdom	Class A - 39598 Class B - 731082
Marks and Spencer (Singapore) Investment Pte Limited, Singapore	Class A - 1929900 Class B - 36554100

* Pursuant to the Scheme of Arrangement and Amalgamation as sanctioned by the Bombay High Court, the shares have vested with the Company.

AS ON 12.09.2013

Equity Share Breakup	Percentage of Holding
Category
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others]	51.00
Bodies corporate	49.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Retailing of Garments and Accessories.

Products/ Services :

ITC Code No.	Product Descriptions
62179090	Apparels
33049900	Beauty or Make up-others

GENERAL INFORMATION

No. of Employees :	Not Available
Bankers :	Not Available

Banking Relations :	--
Auditors :
Name :	Price Waterhouse Chartered Accountants
Address :	Building No. 8, 7^th and 8th Floor, Tower - B, DLF Cyber City, Gurgaon - 122002, Haryana, India
Income-tax PAN of auditor or auditor's firm :	AAEFP5579P
Joint venture :	· Reliance Retail Limited [U17120MH1998PLC114010] Marks and Spencer, Plc
Subsidiary Company :	Supreme Tradelinks Private Limited [U51311RJ2002PTC017552]
Joint Venturer :	Spencer India Private Limited
Fellow Subsidiary of Holding Company :	Marks and Spencer India Private Limited [U51909KA2005PTC050069]
Subsidiary of Holding Company :	Marks and Spencer Singapore Investments Pte Limited
Holding Company :	Marks and Spencer International Holdings Limited

CAPITAL STRUCTURE

AS ON 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
5000000	Equity Shares [Class A]	Rs. 10/- each	Rs. 50.000 Millions
48450000	Equity Shares [Class B]	Rs. 10/- each	Rs. 484.500 Millions
93100000	Equity Shares [Class C]	Rs. 5/- each	Rs. 465.500 Millions
	Total		Rs. 1000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
3859800	Equity Shares [Class A]	Rs. 10/- each	Rs. 38.598 Millions
37285182	Equity Shares [Class B]	Rs. 10/- each	Rs. 372.852 Millions
71646036	Equity Shares [Class C]	Rs. 5/- each	Rs. 358.230 Millions
	Total		Rs. 769.680 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	769.680	595.100	595.100
(b) Reserves & Surplus	1581.447	1175.380	1201.341
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	370.400	0.000
Total Shareholders’ Funds (1) + (2)	2351.127	2140.880	1796.441
(3) Non-Current Liabilities
(a) long-term borrowings	0.000	0.000	0.000
(b) Deferred tax liabilities (Net)	0.000	0.000	0.000
(c) Other long term liabilities	317.782	203.040	120.353
(d) long-term provisions	12.282	13.850	7.503
Total Non-current Liabilities (3)	330.064	216.890	127.856
(4) Current Liabilities
(a) Short term borrowings	0.000	0.000	0.000
(b) Trade payables	317.181	187.440	296.775
(c) Other current liabilities	178.138	76.590	58.383
(d) Short-term provisions	18.798	9.630	10.481
Total Current Liabilities (4)	514.117	273.660	365.639
TOTAL	3195.308	2631.430	2289.936
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	769.090	449.930	230.283
(ii) Intangible Assets	24.920	37.010	38.822
(iii) Capital work-in-progress	25.159	25.810	7.662
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	516.000	516.000	516.003
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	646.964	416.210	419.210
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	1982.133	1444.960	1211.980
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	1047.372	942.680	550.993
(c) Trade receivables	17.313	9.350	2.668
(d) Cash and cash equivalents	73.743	166.810	471.719
(e) Short-term loans and advances	74.747	67.630	52.576
(f) Other current assets	0.000	0.000	0.000
Total Current Assets	1213.175	1186.470	1077.956
TOTAL	3195.308	2631.430	2289.936

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Income	3551.680	2768.670	1945.360
		Other Income	21.140	25.060	34.220
		TOTAL	3572.820	2793.730	1979.580
Less	EXPENSES
		TOTAL	3747.410	2819.690	2070.900
	PROFIT/ (LOSS) BEFORE TAX		(174.590)	(25.960)	(91.320)
Less	TAX		0.000	0.000	0.000
	PROFIT/ (LOSS) AFTER TAX		(174.590)	(25.960)	(91.320)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(364.620)	(338.660)	(247.340)
	BALANCE CARRIED TO THE B/S		(539.210)	(364.620)	(338.660)
	IMPORTS
		Traded Goods	872.590	814.110	530.976
		Capital Goods –Tangible Assets	43.080	12.470	3.950
	TOTAL IMPORTS		915.670	826.580	534.926
	Earnings/ (Loss) Per Share (Rs.)		(2.55)	(0.44)	(1.53)

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	(4.89)	(0.93)	(4.61)
Net Profit Margin (PBT/Sales)	(%)	(4.92)	(0.94)	(4.69)
Return on Total Assets (PBT/Total Assets}	(%)	(6.58)	(1.24)	(5.17)
Return on Investment (ROI) (PBT/Networth)		(0.07)	(0.01)	(0.05)
Debt Equity Ratio (Total Debt/Networth)		0.00	0.00	0.00
Current Ratio (Current Asset/Current Liability)		2.36	4.34	2.95

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Share Capital	595.100	595.100	769.680
Reserves & Surplus	1201.341	1175.380	1581.447
Net worth	1796.441	1770.480	2351.127
long-term borrowings	0.000	0.000	0.000
Short term borrowings	0.000	0.000	0.000
Total borrowings	0.000	0.000	0.000
Debt/Equity ratio	0.000	0.000	0.000

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	1945.360	2768.670	3551.680
		42.322	28.281

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	1945.360	2768.670	3551.680
Profit / (Loss)	(91.320)	(25.960)	(174.590)
	(4.69%)	(0.94%)	(4.92%)

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	No
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	--
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	--
22]	Litigations that the firm / promoter involved in	--
23]	Banking Details	No
24]	Banking facility details	No
25]	Conduct of the banking account	--
26]	Buyer visit details	--
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	Yes
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	No

INDEX OF CHARGES: NO CHARGES EXIST FOR COMPANY

OPERATIONAL REVIEW:

The Company experienced another year of continuous growth, fueled by ongoing innovation and investment in product, marketing and retail space.

The Company opened 6 new retail outlets and at year end was operating from 29 retail outlets. The Company also saw satisfactory improvement in like for like sales and the gross sales grew on a year to year basis by 28%.

The Company continues its march towards being a leading player in retailing of apparel and similar products and in making “Marks and Spencer’ a preferred brand in the Indian market.

FIXED ASSETS:

· Furniture and fixtures

Office equipment

Computer equipments

Other equipments

Leasehold improvements

Computer software

As Per Website

Press Releases

FOOD RETAILERS INCLUDING RELIANCE, ADITYA BIRLA RETAIL, WAL-MART, BHARTI ACCUMULATE RS 130000.000 MILLIONS LOSS IN FY14: CRISIL

28 May, 2014, 

NEW DELHI: The top 10 food retailers in the country suffered losses worth Rs 130000.000 Millions in 2013-14, according to a Crisil Ratings analysis. These include Aditya Birla Retail Limited - owned More stores, Hypercity Retail, Heritage Foods BSE 0.02 %, Easy Day stores, Metro Cash and Carry, Reliance Retail-owned Reliance Fresh, Spencer's Retail and Landmark Group-owned Max Hypermakets. 

These retailers accounted for 40% of the food and grocery (F&G) segment revenue of around Rs 235000.000 Millions last fiscal. 

"The losses were caused by large-scale expansions even as business models were being fine-tuned. To reduce the bleeding, retailers have undertaken several initiatives, but these will yield results only gradually," said Ramraj Pai, president, Crisil. 

"While losses will mount by about 30% over the medium term, they are likely to peak in 2017 as we foresee at least half of the 10 players breaking even by then," Pai added. 

The biggest challenge for food retailers still comes from kirana stores, which can be overcome only by getting a grip on local tastes and preferences, a task that makes food retailing a more nuanced business than any other retail vertical. Price sensitivity and low margins, makes profitability a tough proposition. "Retailers therefore would need a lot of time and investment to perfect the model and positioning and to scale up to the required critical mass. Hence, the gestation period in this vertical is among the highest in retailing,"Crisil BSE -2.60 % said. 

Anuj Sethi, Director, Crisil Ratings, said: "Retailers are now moving away from large-scale expansions and instead streamlining models to achieve faster break-evens. Exits from unprofitable categories, rightsizing of stores, closure of unviable and non-performing stores, focused and calibrated expansion and a renewed focus on private labels are some of the initiatives which the analysed retailers are undertaking to achieve faster break-even." 

What will keep these food retailers going however, is the backing of promoters betting on the immense market potential. Food and grocery retail accounts for 69% of total modern retail in India, which is estimated at Rs 25.3 trillion. 

The two large retailers seen as profitable by Crisil Ratings are Future Value Retail (Big Bazaar, Food Bazaar) and Avenue Supermarts (D-Mart). 

Future Value Retail attained profitability due to the first-mover advantage, low real estate costs and less competition from other modern food retailers at the time of inception. Avenue Supermarts adopted a low-cost business model by operating out of own and making the best of low rentals, Crisil said. 

MARKS AND SPENCER PLANS TO OPEN 100 STORES IN INDIA BY 2016

MUMBAI Tue May 20, 2014

May 20 (Reuters) - Britain's largest clothing retailer Marks and Spencer on Tuesday said it will open a hundred stores in India by 2016 instead of 86 as planned last year.

The clothing retailer, which runs 40 stores in the country, said its Indian same-store-sales grew 13 percent in the fiscal year ended March 2014.

Same-stores-sales is a key performance metric for retailers and measures sales growth at stores open for more than a year. Comparative figures from a year earlier were not available.

Three years ago, M&S identified India as a priority market and Chief Executive Marc Bolland last year said the company planned to offer more stylish and fashionable clothes to Indians after years of struggling with brand positioning in the country.

M&S faces tough competition in India from the world's biggest fashion retailer Inditex SA and its Zara brand.

Marks and Spencer operates in India in a joint venture with Reliance Retail, a unit of billionaire Mukesh Ambani's Reliance Industries.

"Together with our partner Reliance Retail, we are continuing to invest into accelerating our growth in India as we build a leadership position in the market," said Venu Nair, Managing Director of Marks and Spencer Reliance India. (Reporting by Nandita Bose; Editing by Anupama Dwivedi)

Marks and Spencer Indian unit reports same-store sales growth of 13%

Marks and Spencer plans to open 100 stores in India by 2016, including 20 M&S lingerie and beauty stores

Mumbai: The Indian unit of British retailer Marks and Spencer Group Plc. (M&S) posted strong sales growth in the year ended March, as it seeks to expand its presence in a market where it plans to more than double its stores in two years.

Same-store sales in India, or sales at stores that have been open at least for a year, rose 13% in the last fiscal year, said M&S, which has a partnership with Reliance Retail, the retail arm of Reliance Industries Ltd.

The company, which announced its global earnings on Tuesday, did not provide a break-up of revenue or profit earned by its Indian arm.

Asia led growth for the retailer with sales increasing close to 16% while global sales rose 6.2% and group sales were up by 2.7% to £10.3 billion.

Indian retailers such as Future Lifestyle Fashions Limited and Shoppers Stop Limited have been hit by an economic downturn that has caused sales growth to slow in recent times.

Same-store sales at Future Lifestyle Fashions rose 10.5% and Shoppers Stop by 8.4% in the March quarter.

M&S, which has a much smaller network than its rivals, is looking to scale up in India. In fiscal 2014, it opened 10 new stores, taking its store count to 40 across 500,000 sq. ft.

The expansion included doubling its presence in Mumbai and extending its reach to smaller cities such as Kochi, Kanpur and Surat.

“As M&S penetrates and opens more stores in the same city, close to existing locations, there will be cannibalization, and its same-store growth will stabilize at a lower rate,” said Abhishek Ranganathan, vice-president at Phillip Capital India Private Limited, a securities house based in Mumbai.

M&S plans to build a leadership position in the Indian market, targeting a total of 100 stores by 2016, including 20 M&S lingerie and beauty stores, the company said in a press statement.

During the fiscal year, Shoppers Stop added 13 department stores. In the new financial year, Shoppers Stop plans to open eight new stores, taking its store count to 76; and Trent Limited, which operates West Side, plans to open 10 outlets, taking its store count to around 90.

The availability of quality real estate is a challenge in India and M&S is struggling to find good locations as it looks at expanding, said Harminder Sahni, founder and managing director, Wazir Advisors.

Earlier this month, M&S opened its first stand-alone lingerie and beauty store in the Infinity II shopping mall in Mumbai.

M&S saw its lingerie and beauty sales increase by 38% and 26%, respectively, in the previous year, the company statement said.

“During the year, our stores in India delivered a good performance with strong double digit growth. Our exceptional quality, stylish products continue to resonate with our customers in India and the strong performance of our lingerie and beauty offers presents us with an exciting growth opportunity,” Venu Nair, managing director of M&S Reliance India, said in a statement.

The overall apparel market in India grew 11% to $50 billion in fiscal 2014 from $45 billion in the previous year, led by high growth in the organized apparel sector that expanded 21%.

As India’s economic growth slumped to under 5% in the last two fiscal years, retailers increased sales durations and promotions, offering consumers a chance to buy better brands at a cheaper price. “Bigger brands from organized retail witnessed higher growth in comparison to the smaller ones,” said Sahni.

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FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.14
UK Pound	1	Rs.102.22
Euro	1	Rs.81.02

INFORMATION DETAILS

Information Gathered by :	HET
Analysis Done by :	SUB
Report Prepared by :	NTH

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	5
--CREDIT LINES	1~10	6
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTERS
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		50

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