MIRA INFORM REPORT

Report Date :

21.07.2014

IDENTIFICATION DETAILS

Name :	KMART AUSTRALIA LIMITED
Formerly Known As :	K MART AUSTRALIA LTD COLES KMA LIMITED
Registered Office :	C/o WESFARMERS LIMITED Level 11, Wesfarmers House 40 The Esplanade Perth Western Australia 6000
Country :	Australia
Financials (as on) :	30.06.2013
Date of Incorporation :	10.07.1967
Com. Reg. No.:	004700485
Legal Form :	Unlisted Australian Public Company
Line of Business :	Subject owns and operates a network of discount department stores
No. of Employees	31,000

RATING & COMMENTS

MIRA’s Rating :

Ba

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

Status :	Satisfactory
Payment Behaviour :	No complaints
Litigation :	Clear

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 – March 31, 2014

Country Name	Previous Rating (31.12.2013)	Current Rating (31.03.2014)
Australia	A1	A1

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

AUSTRALIA ECONOMIC OVERVIEW

The Australian economy has experienced continuous growth and features low unemployment, contained inflation, very low public debt, and a strong and stable financial system. By 2012, Australia had experienced more than 20 years of continued economic growth, averaging 3.5% a year. Demand for resources and energy from Asia and especially China has grown rapidly, creating a channel for resources investments and growth in commodity exports. The high Australian dollar has hurt the manufacturing sector, while the services sector is the largest part of the Australian economy, accounting for about 70% of GDP and 75% of jobs. Australia was comparatively unaffected by the global financial crisis as the banking system has remained strong and inflation is under control. Australia has benefited from a dramatic surge in its terms of trade in recent years, stemming from rising global commodity prices. Australia is a significant exporter of natural resources, energy, and food. Australia's abundant and diverse natural resources attract high levels of foreign investment and include extensive reserves of coal, iron, copper, gold, natural gas, uranium, and renewable energy sources. A series of major investments, such as the US$40 billion Gorgon Liquid Natural Gas project, will significantly expand the resources sector. Australia is an open market with minimal restrictions on imports of goods and services. The process of opening up has increased productivity, stimulated growth, and made the economy more flexible and dynamic. Australia plays an active role in the World Trade Organization, APEC, the G20, and other trade forums. Australia has bilateral free trade agreements (FTAs) with Chile, Malaysia, New Zealand, Singapore, Thailand, and the US, has a regional FTA with ASEAN and New Zealand, is negotiating agreements with China, India, Indonesia, Japan, and the Republic of Korea, as well as with its Pacific neighbors and the Gulf Cooperation Council countries, and is also working on the Trans-Pacific Partnership Agreement with Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam

Source : CIA

Company name and address

Verified Address

Subject name KMART AUSTRALIA LIMITED Business name / Other KMART / KMART TYRE & AUTO SERVICE Business address Level 3, 690 Springvale Road Town Mulgrave Province Victoria Zip / Postal code 3170 Country Australia Telephone +61 3 99022000 Fax +61 3 99022334 Website www.kmart.com.au

Registered address C/o WESFARMERS LIMITED Level 11, Wesfarmers House 40 The Esplanade Town Perth Province Western Australia Zip / Postal code 6000 Country Australia

SUMMARY DETAILS

Report Summary

Date registered 10/07/1967 Legal form Unlisted Australian Public Company Key personnel Gaetano Alfred Gerrard Russo Line of business The Subject’s business consist of operation a network of discount department stores in Australia and New Zealand under the name KMART and KMART TYRE & AUTO SERVICE. Staff employed 31,000 employees (Subject); 200,000 (Wesfarmers Group)

Paid-up capital AUD340,000,000.00 Sales turnover / Revenue / Income AUD59,832,000,000.00 (Group-Consolidated 12 months, 30/06/2013) Net income / loss AUD2,261,000,000.00 (Group-Consolidated 12 months, 30/06/2013) Total assets AUD43,155,000,000.00 (Group-Consolidated 12 months, 30/06/2013) Share equity AUD26,022,000,000.00 (Group-Consolidated 12 months, 30/06/2013)

Subject’s Credit Risk Analysis

Country risk Country risk is minimal Operation trend Operational trend is steady Management experience Management is adequately experienced Financial performance Group financial performance is excellent Remarks Larger credit can still be considered as the Subject's is well positioned in the market and the financial stability of the group is positive.

Organisation structure Organisational structure is consistent Detrimental No detrimental found Payment history No payment delays noted

STATUTORY DETAILS

Registry Information

Date registered 10/07/1967 Legal form Unlisted Australian Public Company Registration number Australian Company Number: 004700485 Registered authority Australian Securities and Investments Commission Tax / VAT number Australian Business Number: 73004700485

Statutory status Active Previous name K MART AUSTRALIA LTD COLES KMA LIMITED K MART (AUSTRALIA) LIMITED K MART LIMITED K MART PTY. LIMITED (initial) Change of legal form None reported.

BOARD OF MANAGEMENT

Key Personnel

Name Gaetano Alfred Gerrard Russo Designation Chief Executive Officer Name Ian Bailey Designation Chief Operating Officer Name David Graham Matheson Designation Chief Operating Officer - Store and Supply Chain Operations

BOARD OF DIRECTORS

Appointments

Name Ian Bailey Title Director Appointment date 29/01/08 Address 75 Dendy Street Brighton, VIC 3186 Australia Biography Born on 18/06/1966 in United Kingdom. Name Richard James Barr Goyder Title Director Appointment date 29/01/08 Address C/o WESFARMERS LIMITED Level 11, Wesfarmers House 40 The Esplanade Perth, WA 6000 Australia Biography Born on 18/01/1960 in Tambellup, Western Australia, Australia. Mr. Richard J.B. Goyder serves as Chief Executive Officer, Group Managing Director and Executive Director of Wesfarmers Ltd since July 13, 2005. He was appointed as Executive Director in 2002 and served as Finance Director from 2002 to July 13, 2005. He holds a Bachelor of Commerce degree from the University of Western Australia and has completed the Advanced Management Program at the Harvard Business School. He held a number of positions with Tubemakers of Australia, particularly business development roles, before joining Wesfarmers in 1993. He was Managing Director of Wesfarmers Landmark Limited in 1999. He has served as Director of Gresham Partners Holdings Ltd, Chairman of Australian B20 and Australian Football League Commissioner. Name Terence James Bowen Title Director Appointment date 01/05/09 Address C/o WESFARMERS LIMITED Level 11, Wesfarmers House 40 The Esplanade Perth, WA 6000 Australia Biography Born on 24/12/1966 in United Kingdom. Mr. Terry J. Bowen is the Finance Director, Executive Director of Wesfarmers Limited since May 1, 2009. Terry has held a number of finance positions with Tubemakers of Australia Limited. Terry joined Wesfarmers in 1996 and undertook various roles with Wesfarmers Landmark Limited, including Chief Financial Officer until 2003. He then became Chief Financial Officer for Jetstar Airways, prior to rejoining Wesfarmers as Managing Director, Wesfarmers Industrial and Safety in 2005. Terry became Finance Director of Coles in 2007. He has served as Director of Gresham Partners Holdings Ltd, President of the National Executive of the Group of 100 Inc and Deputy Chairman of Western Australian Opera Company Incorporated. Name Gaetano Alfred Gerrard Russo Title Director Appointment date 10/11/08 Address 3 Rose Craddock Place Caulfield North, VIC 3161 Australia Biography Born on 13/07/1959 in Sydney, New South Wales, Australia. Mr. Guy Russo serves as Managing Director - Kmart of Wesfarmers Limited. He was Managing Director and Chief Executive Officer of McDonald's Australia between 1999 and 2005, and President of McDonald's Greater China region between 2005 and 2007. He started at McDonalds in 1974, working his way through the ranks while completing management development training at McDonald's in-house university as well as at Macquarie University Graduate School of Management in Sydney. He held all key operations positions within the Australian business including Regional Manager of the market, NSW/ACT, from 1991; in 1995 he became a Vice President of McDonald's Australia and in 1997 was appointed advisory director to the Australian Board. During this time he also served on numerous international task forces within the global corporation. After leaving McDonalds in 2007, he ran his own consulting firm advising public and private ventures with commercial interests in China, as well as other markets. Name David Graham Matheson Title Director Appointment date 25/03/11 Address 19 Hartley Road Wonga Park, VIC 3115 Australia Biography Born on 20/06/1964 in South Africa. Name Colin Brian Pavlovich Title Director Appointment date 29/04/13 Address 11C Parker Street East Fremantle, WA 6158 Australia Biography Born on 25/12/1970 in Perth, Western Australia, Australia. Name Marnie Kronja Title Company Secretary Appointment date 04/02/11 Address 72 Carr Street West Perth, WA 6005 Ausralia Biography Born on 07/01/1975 in Subiaco, Western Australia, Australia.

Staff employed 31,000 employees (Subject); 200,000 (Wesfarmers Group)

Other Appointments

Auditor ERNST & YOUNG Ernst & Young Building 11 Mounts Bay Road Perth, WA 6000 Australia

SHARE CAPITAL

Composition

Authorized capital AUD340,000,000.00 Number / Type of shares 8,160,000 Ordinary A Shares / 7,840,000 Ordinary B Shares / 3,240,000 Redeemable Preference Shares Share par value AUD 1 for Ordinary A & Ordinary B Share / AUD 100 for Redeemable Preference Share Issued capital AUD340,000,000.00

Paid-up capital AUD340,000,000.00

OWNERSHIP / SHAREHOLDERS

Composition

How listed Full list Shareholder name WESFARMERS LIMITED Address Level 11, Wesfarmers House 40 The Esplanade Perth, WA 6000 Australia Number / Type of shares 8,160,000 Ordinary A Shares / 7,840,000 Ordinary B Shares / 3,240,000 Redeemable Preference Shares Percentage (%) of shares 100%

CORPORATE AFFILIATIONS AND RELATED COMPANIES

Structure

Company name WESFARMERS LIMITED Affiliation type Parent Company Country of business Australia Comments Wesfarmers Limited is engaged in the retail; coal mining and production; gas processing and distribution; industrial and safety product distribution; chemicals and fertilizers manufacture; and investment businesses in Australia, New Zealand, and internationally. The company operates 756 BI-LO supermarkets; 810 liquor stores trading under the Liquorland, Vintage Cellars, and First Choice Liquor Superstores brands; 92 hotels; 636 fuel and convenience store outlets under the Coles Express name; and an online supermarket. It also offers home improvement and outdoor living products through 210 warehouse stores, 67 small format stores, and 36 trade centers under the Bunnings name; office products and solutions through 150 Officeworks stores; apparel and general merchandise through 190 Kmart stores; and automotive services, repairs, and tires through 263 Kmart Tyre & Auto Service centers, as well as is involved in the retail of building materials, and office and technology products. In addition, the company is engaged in property business; and supplying and distributing maintenance, repair, and operating products, as well as industrial safety products and services. Further, it manufactures and markets industrial gases and equipment; supplies and distributes industrial safety products and services; and extracts, markets, and distributes LPG and LNG. Additionally, the company provides risk management solutions; and financial advisory, structured finance, and property and private equity funds management services. It also offers chemicals for industry, mining, and mineral processing activities; broadacre and horticultural fertilizers; industrial, medical, and specialty gases; and industrial equipment, as well as holds interests in the Curragh and Bengalla cola mines in Australia. Wesfarmers Limited was founded in 1914 and is based in Perth, Australia. Company name COLES GROUP LIMITED Affiliation type Sister Company Country of business Australia Company name BUNNINGS GROUP LIMITED Affiliation type Sister Company Country of business Australia Company name TARGET AUSTRALIA PTY. LTD. Affiliation type Sister Company Country of business Australia Company name WESFARMERS RESOURCES LIMITED Affiliation type Sister Company Country of business Australia Company name CURRAGH QUEENSLAND MINING PTY LTD Affiliation type Sister Company Country of business Australia Company name WESFARMERS CURRAGH PTY LTD Affiliation type Sister Company Country of business Australia Company name OAMPS (UK) LIMITED Affiliation type Sister Company Country of business United Kingdom Company name BENGALLA MINING COMPANY PTY LIMITED Affiliation type Sister Company Country of business Australia Company name LUMLEY GENERAL INSURANCE (NZ) LIMITED Affiliation type Sister Company Country of business New Zealand

Remarks on corporate affiliations and related companies Other companies of the Wesfarmers Limited group should be considered affiliates of the Subject.

BANK AND MORTGAGES

Bank Details

Name of bank Australia and New Zealand Banking Group Limited Address Australia Name of bank National Australia Bank Address Australia

Comments It is generally not the policy of local banks to provide credit status information to non-related parties. However, interested parties are advised to first consult with the Subject if banker''s references are required.

Mortgages

None reported.

Legal Filings

Bankruptcy filings None reported. Court judgements None reported.

Tax liens None reported. Others None reported.

FINANCIAL STATISTICS

Description

Financial statement source Public Record Sources Financial statement date 30/06/13 Style of financial statement Full audited

Currency of financial statement Australia Dollar (AUD) Exchange rate 1 USD = AUD 1.07 as of 18-07-2014

Concise Financial Data	Consolidation style	Group Consolidated	Group Consolidated
	Currency	Australia Dollar (AUD)	Australia Dollar (AUD)
	Date of financial year end	30/06/13	30/06/12
	Length of financial accounts	12 months	12 months
	Sales turnover / Revenue / Income	59,832,000,000.00	58,080,000,000.00
	Profit / Loss before tax	3,226,000,000.00	3,044,000,000.00
	Net income / loss	2,261,000,000.00	2,126,000,000.00
	Non-current assets	32,569,000,000.00	31,401,000,000.00
	Property, plant and equipment	10,164,000,000.00	9,463,000,000.00
	Current assets	10,586,000,000.00	10,911,000,000.00
	Inventories	5,047,000,000.00	5,006,000,000.00
	Cash and cash equivalents	1,333,000,000.00	1,127,000,000.00
	Accounts receivable	2,341,000,000.00	2,384,000,000.00
	Total assets	43,155,000,000.00	42,312,000,000.00
	Current liabilities	9,572,000,000.00	10,747,000,000.00
	Non-current liabilities	7,561,000,000.00	5,938,000,000.00
	Accounts payable	5,999,000,000.00	5,420,000,000.00
	Total liabilities	17,133,000,000.00	16,685,000,000.00
	Share equity	26,022,000,000.00	25,627,000,000.00
	Retained earnings	2,375,000,000.00	2,103,000,000.00
	Reserves	383,000,000.00	269,000,000.00

Remarks

The group consolidated financial statement above relates to the Subject's Ultimate Holding Company Wesfarmers Limited and all its subsidiaries. The KMART division of the WESFARMERS LIMITED group reported sales turnover of AUD 4,167,000,000 with EBIT of AUD 344,000,000 for financial year end 30-06-2013 compared to sales turnover of AUD 4,055,000,000 and EBIT of AUD 268,000,000 for financial year end 30-06-2012.

BUSINESS DETAILS

Operational Details

Main activities The Subject owns and operates a network of discount department stores in Australia and New Zealand under the brand name KMART and KMART TYRE & AUTO SERVICE. KMART engages in retail sales of apparel and general merchandise including toys, leisure, entertainment, home and consumables. KMART TYRE & AUTO SERVICE engages in the provision of automotive service, repairs and tyre service. The Subject is part of Wesfarmers Limited, which is an Australia based company. The Company’s principal activities are retailing operations, including supermarkets, general merchandise and specialty department stores; fuel, liquor and convenience outlets; retailing of home improvement and outdoor living products and supply of building materials; retailing of office and technology products; coal mining and production; gas processing and distribution; insurance; industrial and safety product distribution; chemicals and fertilizers manufacture, and investments. It operates in 10 segments: Coles; home improvement and office supplies; resources; insurance; KMART; Target; industrial and safety; energy; chemicals and fertilizers, and other. Products and services Apparels General merchandise Electronics products Toys DVDs Appliances Bathroom & Laundry products Bedding & Accessories Dining products Home Decor Indoor Furniture Kitchen products Office products: Inks and office supplies Storage Solutions Automotive repair and services Automotive products: Car Batteries, Car Cleaning, Car Interior Accessories , Oils & Coolants , Seat Covers & Car Mats, Spare Parts & Accessories , Sunshades etc Brands KMART KMART TYRE & AUTO SERVICE

Purchases

Local The Subject sources its product(s) / material(s) locally.

International The Subject sources its product(s) / material(s) from countries worldwide.

Sales

Local The Subject sells its product(s) locally.

International None reported.

Business Facilities and Assets

Premises The Subject operates from the verified heading address consisting of an administrative office.

Branches In addition, the Subject operates from 190 Kmart stores and 263 Kmart Tyre & Auto Service centres located throughout Australia and New Zealand.

SUMMARIZED COUNTRY RISK

Gross Domestic Products (GDP) and Economic Overview

Central bank Reserve Bank of Australia Reserve of foreign exchange and gold US$ 46.714 billion Gross domestic product (GDP) US$ 1.586 trillion Purchasing power parity (GPP) 954.296 billion of International dollars GDP per capita (current prices) US$ 68,916 GDP composition by sector agriculture: 4% industry: 25.6% services: 70.4% Inflation 2010: 2.8% 2011: 3.4% 2012: 2.7% Unemployment rate 2010: 5.2% 2011: 5.1% 2012: 5.2%

Public debt (general Government gross debt as percentage (%) of GDP) 2010: 20.4% 2011: 22.9% 2012: 24% Government bond ratings Standard & Poors: AAA Moodys rating: Aaa Moodys outlook: STA Market value of publicly traded shares US$1.198 trillion Largest companies HTC (Communications Equipment), Quanta Computer (Computer Hardware), Compal Electronics (Computer Hardware), Asustek Computer (Computer Hardware), Chimei Innolux (Computer Hardware), Wistron (Computer Hardware), Acer (Computer Hardware), Inventec (Computer Hardware), Lite-On Technology (Computer Storage Devices), Chinatrust Financial (Consumer Financial Services), Hua Nan Financial (Consumer Financial Services), Taiwan Cooperative Bank (Consumer Financial Services), SinoPac Financial Holdings (Consumer Financial Services), E.Sun Financial (Consumer Financial Services), Mercuries & Associates (Department Stores), Nan Ya Plastic (Diversified Chemicals), Far Eastern New Century (Diversified Chemicals), Hon Hai Precision (Electronics), AU Optronics (Electronics), Delta Electronics (Electronics), Pegatron (Electronics), WPG Holdings (Electronics), Uni-President (Food Processing), Fubon Financial (Investment services), Mega Financial Holding (Investment services), Taishin Financial Holdings (Investment services), Yuanta Financial Holding (Investment services), China Steel (Iron & Steel), Cathay Financial (Life & Health Insurance), Shin Kong Financial (Life & Health Insurance), First Financial Holding (Major Banks), Formosa Petrochemical (Oil & Gas Operations), Chang Hwa Bank (Regional Banks), Taiwan Business Bank (Regional Banks), Taiwan Semiconductor (Semiconductors), United Microelectronics (Semiconductors), Advanced Semiconductor (Semiconductors), MediaTek (Semiconductors), Formosa Chemicals (Specialized Chemicals), Formosa Plastics (Specialized Chemicals), Chunghwa Telecom (Telecommunications services), Taiwan Mobile (Telecommunications services)

Trade and Competitiveness Overview

Total exports US$263.9 billion Export commodities Coal, iron ore, gold, meat, wool, alumina, wheat, machinery and transport equipment Total imports US$239.7 billion Import commodities Machinery and transport equipment, computers and office machines, telecommunication equipment and parts; crude oil and petroleum products Best countries for doing business 10 out of 185 countries Global competitiveness ranking 20 (ranking by country on a basis of 144, the first is the best)

Major export partners China 27.4%, Japan 19.2%, South Korea 8.9%, India 5.8% Major import partners China 18.5%, US 11.4%, Japan 7.9%, Singapore 6.3%, Germany 4.7% FDI inflows 2009: US$26,554 million 2010: US$35,556 million 2011: US$41,317 million FDI outflows 2009: US$16,693 million 2010: US$12,791 million 2011: US$19,999 million

Country and Population Overview

Total population 22.68 million Total area 7,692,024 km2 Capital Canberra

Currency Australian dollars (AUD) Internet users as percentage (%) of total population 79%

PAYMENT OUTLOOK

Purchases Term

Local Prepayment, Bank transfer, D/P, Prepayment, Credit 30-120 days

International L/C, Telegraphic transfer, D/P, Prepayment, Credit 30-120 days

Sales Term

Local Cash, Credit card

Trade Reference / Payment Behaviour

Comments As local and international trade references were not supplied, the Subject's payment track record history cannot be appropriately determined but based on our research, payments are believed to be met without delay.

Investigation Note

Sources Interviews and material provided by the Subject Other official and local business sources

Attachments

Attachments Group consolidated financial statements List of affiliated companies

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.33
UK Pound	1	Rs.103.18
Euro	1	Rs.81.58

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	NIS

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	--

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%)

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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.