The Benetton Group Annual Report 1996

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22. ACCOUNTS PAYABLE The composition of and significant changes in this account group during the year are set out below: Bonds These consist of the following: – EuroLire bond, guaranteed by Benetton Group S.p.A., issued on July 29, 1993, by the Dutch subsidiary Benetton International N.V., for Lire 200,000 million, bearing interest at 4.5% payable annually and repayable in 1998. The bonds carried 2,520,000 warrants, each giving the holder the right to receive, at the option of the Company’s management, either (i) one Ordinary Share which the Company would have to purchase in the stock market, or (ii) an amount in Lire equal to the closing price of one Ordinary Share on the Milan Stock Exchange (“MSE”). These warrants were exercised at their maturity, on July 29, 1996. ? ?The net cost of servicing the warrants, about Lire 38,300 million, is recognized on an accrual basis that reflects the accumulation of interest. The charge for 1996 amounts to about Lire 5,700 million. – Bonds totaling LuxF 750 million (Lire 35,775 million at the December 31, 1996 exchange rate) were issued in 1994, by the subsidiary company, Benetton Finance, at a unit price of LuxF 102.25, repayable on August 4, 1999. Following an operation linked to an interest-rate swap, the bond bears interest at floating rates which, at year-end, was 8.8%. The bond is guaranteed by Benetton Group S.p.A. and listed on the Luxembourg Bourse. – Bond issued on January 27, 1992, by Benetton España S.L. for Ptas 3,000,000,000, equivalent to Lire 34,986 million at the December 31, 1996 exchange rate. This bond, bearing interest at an annual rate of 12.10%, was repaid in full on January 27, 1997. Convertible bonds – Ten-year bond, issued in 1988 by a Stefani Group company for Lire 300 million. This bond is convertible at par from January 1, 1998. Due to banks Amounts due to banks at the balance sheet date are classified as follows: 12-31-1995 12-31-1996 Current account overdrafts 50,029 34,030 Import/export advances 71,221 53,810 Lines of credit, advances on receivables and other short-term loans 446,753 698,194 Long-term loans: - due within 12 months 162,021 18,753 - due beyond 12 months 204,069 80,543 Total 934,093 885,330 Long-term loans include Lire 21,078 million and Lire 153,250 million due beyond five years as of December 31, 1996 and 1995, respectively. Amounts due to banks include around Lire 89,296 million secured by mortgages on tangible fixed assets. Group companies had the following lines of credit available at the balance sheet date: Lire 204 billion for current account overdrafts, and Lire 4,068 billion for advances on import/export transactions, the negotiation of trade notes and other short-term loans. The weighted-average interest rates at year end are as follows: - Overdrafts 9.58% - Import/export advances 5.62% - Advances against receivables and bank receipts 8.31% - Other short-term borrowings 7.00%
Long-term loans from banks outstanding as of December 31, 1996 and 1995 are as follows: Loan from Efibanca (Ente Finanziario Interbancario S.p.A.) and the European Investment Bank, disbursed in two tranches, at annual interest rates of 8.375% and 7.755%, repayable in semiannual installments in arrears through 2003, secured by mortgages on real estate Loan from Efibanca (Ente Finanziario Interbancario S.p.A.) at an annual interest rate of 9.75%, repayable in full on April 9, 1997 Loans from Efibanca (Ente Finanziario Interbancario S.p.A.) at an annual interest rate of 7.93%, repayable from 1998 through 2005, secured by mortgages on real estate Loans from Fondo Rotazione Iniziative Economiche at annual interest rates between 6% and 8%, repayable in semiannual installments through 2004, secured by mortgages on real estate Loan from IMI (Istituto Mobiliare Italiano), at a floating interest rate (7.40% at year end), repayable from 1999 through 2003, secured by mortgages on real estate 12-31-1995 12-31-1996 50,000 10,000 - 5,079 - 47,274 10,000 5,500 9,746 21,000 Other Lire loans secured by mortgages on real estate 3,144 2,463 Multicurrency loan obtained from an international banking syndicate for ECU 100,000,000, at floating interest rates that depend on the currencies chosen, repaid on February 6, 1996 Loan from Istituto Bancario San Paolo di Torino S.p.A., London branch, with the backing of leading international banks, at an annual interest rate of 8.487%, repayable in semiannual installments in arrears through 2003 but repaid early Loans from Mediocredito delle Venezie at annual interest rates between 8.25% and 11.5%, secured by mortgages on real estate and liens on machinery, repaid in 1996 Loans from Friulia at annual interest rates between 7% and 10%, repaid in 1996 Other foreign currency loans obtained by foreign consolidated companies, secured by mortgages on real estate 152,191 136,282 Total long-term loans 366,090 99,296 Less - Current portion (162,021) (18,753) Long-term loans, net of current portion 204,069 80,543 The non-current portions of these loans as of December 31, 1996 fall due as follows: 1998 12,106 1999 16,754 2000 15,349 2001 15,256 2002 and beyond 21,078 1,340 368 7,686 - - - - 3,313 80,543
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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 50 and 51: CURRENT ASSETS 9. Inventories Inven
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 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
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The Benetton Group Annual Report 1996

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