The Benetton Group Annual Report 1996

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CURRENT ASSETS 9. Inventories Inventories, Lire 411,292 million (Lire 506,363 million as of December 31, 1995), recorded net of the related inventory writedown reserve, consist of the following: Raw materials, other materials and consumables Work in progress and semimanufactured products 12-31-1995 12-31-1996 4,501 5,292 Finished goods 9,652 5,738 Total 15,453 12,980 The valuation of closing inventories at average cost is not appreciably different from their valuation at current purchase cost. 10. Accounts receivable Trade receivables As of December 31, 1996, trade receivables amount to Lire 1,256,636 million, of which approximately Lire 788,000 million are denominated in foreign currency (approximately Lire 821,900 million as of December 31, 1995). Open forward exchange contracts as of December 31, 1996 are used to hedge receivables totaling Lire 349,550 million and firm orders worth Lire 393,184 million at year-end exchange rates. Trade receivables also include Lire 139,733 million (Lire 148,280 million as of December 31, 1995) of bank receipts and notes deposited with financial institutions for collection. Additionally, this account includes approximately Lire 424,000 million relating to sales for the spring/summer season. In accordance with normal conditions of sale, the payment terms for the above amount commence from April 1997. The allowance for doubtful accounts as of December 31, 1996 amounts to Lire 168,883 million (Lire 169,935 million as of December 31, 1995). A prudent assessment of the specific and generic collection risks associated with receivables outstanding at year-end has resulted in suitable additional provisions to take account of the aging of certain balances and the difficult economic conditions in a number of markets. Lire 79,356 million was released from the allowance for doubtful accounts to cover losses during the year, while provisions for 1996 amounted to Lire 78,304 million compared with Lire 60,839 million in 1995. Amounts receivable from subsidiary and associated companies, Lire 1,501 million and Lire 3,604 million, respectively, mainly relate to trade and financial receivables due from companies not consolidated on a line-by-line basis. Other receivables As of December 31, 1996, other receivables include: VAT recoverable from the tax authorities in the amount of Lire 36,703 million (Lire 48,222 million as of December 31, 1995); tax credits, in the amount of Lire 16,257 million (Lire 68,377 million as of December 31, 1995); and other amounts due from the tax authorities totalling Lire 8,790 million (Lire 24,128 million as of December 31, 1995). 1,300 1,950
11. Financial assets not held as fixed assets Treasury shares This caption relates to shares of the Company’s stock acquired during the year by Benetton Group S.p.A., as resolved at the ordinary stockholders' meeting held on April 30, 1996. A total of 43,500 shares were purchased during September and October 1996 for Lire 719 million. No similar transactions occured in 1995. Other securities This caption comprises: Long-term Government bonds (BTP), as of December 31, 1996, maturing through 1998 and 1999, at interest rates between 8.5% and 10.5% Consorzio di Credito per le Opere Pubbliche bonds, as of December 31, 1996, maturing through 1999 and 2002, at interest rates between 6.1% and 13.4% European Investment Bank bonds in Italian Lire, as of December 31, 1996, maturing in 2000 and 2002, at interest rates between 8.5% and 11.25% IBRD bonds in Italian Lire, as of December 31, 1996, maturing through 1998 and 2002, at interest rates between 10.4% and 11.63% ENEL bonds, maturing in 2001 and 2002, at interest rates of 11.7% and 10.63% Italian State Railway bonds, maturing in 2000 and 2002, at interest rates of 7.25% and 8.05% Treasury Certificates (CCT), as of December 31, 1996, maturing in 2001, at floating interest rates French Treasury bills (BTAN), matured in 1996, at an interest rate of 9% 12-31-1995 12-31-1996 Book value Face value Book value Face value 74,794 48,329 15,934 6,564 - - 79,667 58,476 75,000 47,000 14,955 6,274 - - 80,000 58,214 368,807 134,490 37,822 6,906 44,678 12,399 50,690 - 350,000 128,100 33,375 6,325 41,700 12,000 50,000 Other 6,317 6,279 3,508 3,508 Total 290,081 287,722 659,300 625,008 These securities have been written down by Lire 417 million to reflect their market value, determined on the basis of average stockmarket prices for the month of December. "Other" includes various securities, reflecting the temporary deployment of liquidity by subsidiary companies. Other financial receivables This caption includes: 12-31-1995 12-31-1996 Short-term financing 117,244 4,399 Amounts due on repurchase agreements 10,000 - Total 127,244 4,399 Short-term loans to employ liquidity and the repurchase agreements arranged at the end of 1995 were closed out in January 1996. The amount outstanding as of December 31, 1996 reflects short-term financing granted by subsidiary companies to third parties operating on behalf of the Group. -
Page 1: The Benetton Group Annual Report 19
Page 5: Dear Shareholders, in 1996 the Bene
Page 8 and 9: Manufacturing companies invested su
Page 11: Signori Azionisti, nell’esercizio
Page 14 and 15: Gli investimenti I programmi di inn
Page 17 and 18: Consolidated financial statements a
Page 19: The Benetton Group The Benetton Gro
Page 23 and 24: Management’s discussion and analy
Page 25: Net capital employed Net working ca
Page 28 and 29: Consolidated balance sheet as of De
Page 30 and 31: Consolidated balance sheet as of De
Page 32 and 33: Consolidated statements of income f
Page 34 and 35: Statement of changes in consolidate
Page 36 and 37: Statements of consolidated cash flo
Page 38 and 39: NOTES TO THE CONSOLIDATED FINANCIAL
Page 40 and 41: 4. Accounting policies The accounti
Page 42 and 43: Reserve for employee termination in
Page 44 and 45: OTHER INFORMATION 5. Purchase of su
Page 46 and 47: COMMENTS ON THE PRINCIPAL ASSET CAP
Page 48 and 49: 8. Financial fixed assets Equity in
Page 52 and 53: Differentials on forward transactio
Page 54 and 55: Reconciliation of the stockholders'
Page 56 and 57: 20. RESERVES FOR RISKS AND CHARGES
Page 58 and 59: 22. ACCOUNTS PAYABLE The compositio
Page 60 and 61: Due to other providers of finance A
Page 62 and 63: 23. ACCRUED EXPENSES AND DEFERRED I
Page 64 and 65: Sales of core products, by business
Page 66 and 67: Writedowns The "Writedown of curren
Page 68 and 69: Expense This caption includes: 1995
Page 70 and 71: As those proceedings continue, a se
Page 72 and 73: Generally accepted US accounting pr
Page 74 and 75: The following tables summarize the
Page 76 and 77: Differences which do not have an ef
Page 78 and 79: Companies and Groups included withi
Page 80 and 81: Consolidated balance sheets as of A
Page 82 and 83: Consolidated statements of income f
Page 84 and 85: REPORT OF THE BOARD OF STATUTORY AU
Page 87: Information for Stockholders Inform

The Benetton Group Annual Report 1996

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