March 12, 2013 Mumbai

Mrs.Bectors Food Specialities Limited

Rated Amount Enhanced
Total Bank Loan Facilities Rated Long-Term Rating Short-Term Rating CRISIL A-/Stable (Reaffirmed) CRISIL A2+ (Reaffirmed)
(Refer to Annexure 1 for details on facilities)

Rs.1700 Million (Enhanced from Rs.1420 Millio

CRISILs ratings on the bank facilities of Mrs.Bectors Food Specialities Ltd (Bector) continue to reflect Bectors growing market presence with the Cremica brand of biscuits in North India, its strong financial r profile marked by a healthy capital structure and debt protection metrics, and its established relationship with large players such as McDonalds Corporation (McDonalds), ITC Ltd (ITC), Cafe Coffee Day (a divisi Amalgamated Bean Coffee Trading Company Ltd.), Dominos India ( a Jubilant FoodWorks Ltd. company) and others. These rating strengths are partially offset by Bectors modest scale of operations in the inten competitive biscuit industry, and susceptibility to increase in raw material prices and volatility in foreign exchange rates, given that more than 20 per cent of its revenues are from exports.

Bector received private equity funding of Rs.720 million from Goldman Sachs Private Equity (Goldman S in 2006-07 (refers to financial year, April 1 to March 31), of which Rs.520 million was against compulsor convertible preference shares (class A shares), and Rs.200 million against optionally convertible preferen shares (class B shares). In September 2010, Goldman Sachs sold its 22 per cent stake, in the form of cl shares to IL&FS Trust Company Ltd (acting trustee for Business Excellence Trust-India Business Excellen Fund) and India Business Excellence Fund-1, two Motilal Oswal companies; the Class B shares were converted into equity. Bector is now planning to induct a new investor to take over the stake held by the two companies.

Bector is also considering the hiving off of its food supplements division into a separate company which w the case prior to the equity investment. Both these changes are likely to be completed in 2013-14, and t effect on Bectors credit risk profile will be a key rating sensitivity factor.

Outlook: Stable CRISIL believes that Bector will maintain a steady revenue growth over the medium term, supported by strong brands, Cremica and Mrs. Bectors. Its financial risk profile will also remain strong as the planned capital expenditure (capex) will be funded through a prudent mix of internal accruals and debt. The outlo may be revised to Positive if Bector reports a significant improvement in its operating income and profitability, while maintaining its healthy capital structure. Conversely, the outlook may be revised to Negative if Bectors capital structure deteriorates, most likely driven by larger -than-expected debt-fund capex, or if the proposed business and shareholder restructuring has a detrimental impact on its credit r profile.

About the Company Mrs. Rajni Bector set up Bector as a joint venture (JV) with Quaker Oats, USA (now a subsidiary of Pepsi Inc) to supply packaged ketchup to McDonalds in addition to buns, batter, and bread. Quaker Oats withd from the JV in 1999; however, Bector continues to be the sole supplier of buns, packaged ketchup, and o condiments to McDonalds. In 2006-07, Bector bought over the assets of group company Cremica Agro F Ltd, which was engaged in manufacturing biscuits and buns, in a slump sale. Since then, Bector has bee manufacturing and marketing biscuits, breads, sauces, spreads, salty snacks ( namkeens), and ready-tocurries for both institutional and retail clients under the Cremica brand. Bector derives about 80 per cent its revenues from its biscuit and bakery division while food supplements (sauces, spreads, and namkeen account for the remainder.

Bectors customers include the Indian Army (biscuits), Indian Railways (biscuits, packaged sauce), World Food Programme (biscuits), Jet Airways, Taj Hotels, and Caf Coffee Day. The company also has a long-

agreement with ITC and Mondelez International Inc (formerly part of Kraft Foods Inc) for contract manufacturing biscuits. It also supplies bread and other bakery products to retailers under the English O brand.

Bector reported a profit after tax (PAT) and operating income of Rs.169.6 million and Rs.5.6 billion, respectively, for 2011-12, as against a PAT of Rs.71.5 million on an operating income of Rs.4.7 billion fo 2010-11. Annexure 1 Details of various bank facilities Current facilities Facility Bill Discounting Cash Credit Corporate Loan Letter of credit & Bank Guarantee Standby Line of Credit Term Loan Total Media Contacts Mitu Samar Director, Communications and Brand Management CRISIL Limited Tel: +91-22- 3342 1838 E-mail: mitu.samar@crisil.com Tanuja Abhinandan Communications and Brand Management CRISIL Limited Tel: +91-22- 3342 1818 Email: tanuja.abhinandan@crisil.com Amount (Mln) 150 530 75 247.5 30 667.5 1700 Rating CRISIL A2+ CRISIL A/Stable CRISIL A/Stable CRISIL A2+ CRISIL A/Stable CRISIL A/Stable -Analytical Contacts Facility Bill PurchaseDiscounting Facility Cash Credit Letter of credit & Bank Guarantee Proposed Term Loan Standby Line of Credit Term Loan Total Previous facilities Amount (Mln) 225 442.5 155 252.1 20 325.4 1420 Rating

CRISIL A /Stable

CRISIL A /Stable

CRISIL A2

CRISIL A /Stable

CRISIL A /Stable

CRISIL A /Stable --

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banks and leading corporations.

About CRISIL Ratings CRISIL Ratings is India's leading rating agency. We pioneered the concept of credit rating in India in 1987. W tradition of independence, analytical rigour and innovation, we have a leadership position. We have rated ove 50,000 entities, by far the largest number in India. We are a full-service rating agency. We rate the entire ran of debt instruments: bank loans, certificates of deposit, commercial paper, non-convertible debentures, bank hybrid capital instruments, asset-backed securities, mortgage-backed securities, perpetual bonds, and partial guarantees. CRISIL sets the standards in every aspect of the credit rating business. We have instituted sever innovations in India including rating municipal bonds, partially guaranteed instruments and microfinance institutions. We pioneered a globally unique and affordable rating service for Small and Medium Enterprises (SMEs).This has significantly expanded the market for ratings and is improving SMEs' access to affordable finance. We have an active outreach programme with issuers, investors and regulators to maintain a high lev transparency regarding our rating criteria and to disseminate our analytical insights and knowledge.

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