MIRA INFORM REPORT

Report Date :

21.03.2014

IDENTIFICATION DETAILS

Name :	K-CITYMARKET OY
Registered Office :	Kutojantie 4, Espoo, 02630
Country :	Finland
Financials (as on) :	01.12.2012
Date of Incorporation :	1998
Com. Reg. No.:	15077246
Legal Form :	Private Subsidiary
Line of Business :	Subject is engaged in retail sale of a large variety of goods of which food products, beverages or tobacco should not be predominant; and activities of department stores carrying a general line of merchandise including wearing apparel, furniture, appliances, hardware, cosmetics, jewellery, toys, sporting goods
No. of Employees :	2,865

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	Slow but correct
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 – September 30, 2013

Country Name	Previous Rating (30.06.2013)	Current Rating (30.09.2013)
Finland	A2	A2

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

FINLAND - ECONOMIC OVERVIEW

Finland has a highly industrialized, largely free-market economy with per capita output almost as high as that of Austria, Belgium, the Netherlands, and Sweden. Trade is important with exports accounting for over one third of GDP in recent years. Finland is strongly competitive in manufacturing - principally the wood, metals, engineering, telecommunications, and electronics industries. Finland excels in high-tech exports such as mobile phones. Except for timber and several minerals, Finland depends on imports of raw materials, energy, and some components for manufactured goods. Because of the climate, agricultural development is limited to maintaining self-sufficiency in basic products. Forestry, an important export earner, provides a secondary occupation for the rural population. Finland had been one of the best performing economies within the EU in recent years and its banks and financial markets avoided the worst of global financial crisis. However, the world slowdown hit exports and domestic demand hard in 2009, with Finland experiencing one of the deepest contractions in the euro zone. A recovery of exports, domestic trade, and household consumption stimulated economic growth in 2010-11, however, continued recession the the EU dampened the economy in 2012-13. The recession affected general government finances and the debt ratio, turning previously strong budget surpluses into deficits, but Finland took action to ensure it that it met the EU deficit targets in 2013 and retained its triple-A credit rating. Finland's main challenge will be to stimulate growth while faced with weak export demand in the EU and its own government austerity measures. Longer-term, Finland must address a rapidly aging population and decreasing productivity that threaten competitiveness, fiscal sustainability, and economic growth.

Source : CIA

Company name and address

K-CITYMARKET OY

Kutojantie 4
Espoo, 02630
Finland
Tel:	358-105311
Fax:	358 10 5323492
www.citymarket.fi

Employees:	2,865
Company Type:	Private Subsidiary
Corporate Family:	67 Companies
Ultimate Parent:	Kesko Oyj
Incorporation Date:	1998

Financials in:
Fiscal Year End:	01-Dec-2012
Reporting Currency:	Euro
Annual Sales:	853.0
Net Income:	(0.5)
Total Assets:	267.9

Business Description

K-Citymarket Oy is primarily engaged in retail sale of a large variety of goods of which food products, beverages or tobacco should not be predominant; and activities of department stores carrying a general line of merchandise including wearing apparel, furniture, appliances, hardware, cosmetics, jewellery, toys, sporting goods

Industry

Industry	Department Stores
ANZSIC 2006:	4260 - Department Stores
ISIC Rev 4:	4719 - Other retail sale in non-specialized stores
NACE Rev 2:	4719 - Other retail sale in non-specialised stores
NAICS 2012:	452112 - Discount Department Stores
UK SIC 2007:	4719 - Other retail sale in non-specialised stores
US SIC 1987:	5311 - Department Stores

Key Executives

Name	Title
Antti Jussi Ollila	Managing director
Jukka Koivunen	Vice President
Petri Mäntysalo	Store Functions Director
Hanne Lehtovuori	HR Director
Matti Veikko Iisakki Halmesmäki	Chairman

Registered No.(FIN): 15077246

1 - Profit & Loss Item Exchange Rate: USD 1 = EUR 0.7779654

2 - Balance Sheet Item Exchange Rate: USD 1 = EUR 0.772118

Corporate Overview

Location
Kutojantie 4
Espoo, 02630
Finland

Tel:	358-105311
Fax:	358 10 5323492

www.citymarket.fi

Sales EUR(mil):	663.6
Assets EUR(mil):	206.8
Employees:	2,865
Fiscal Year End:	01-Dec-2012

Industry:	Retail (Department and Discount)

Incorporation Date:	1998
Company Type:	Private Subsidiary
Quoted Status:	Not Quoted
Registered No.(FIN):	15077246

Vice President:	Jukka Koivunen

Industry Codes

ANZSIC 2006 Codes:
4260	-	Department Stores

ISIC Rev 4 Codes:
4719	-	Other retail sale in non-specialized stores

NACE Rev 2 Codes:
4719	-	Other retail sale in non-specialised stores

NAICS 2012 Codes:
452112	-	Discount Department Stores

US SIC 1987:
5311	-	Department Stores

UK SIC 2007:
4719	-	Other retail sale in non-specialised stores

Business Description

Departmental Stores Operating Services

More Business Descriptions

K-Citymarket Oy is primarily engaged in retail sale of a large variety of goods of which food products, beverages or tobacco should not be predominant; and activities of department stores carrying a general line of merchandise including wearing apparel, furniture, appliances, hardware, cosmetics, jewellery, toys, sporting goods, etc.

Department Stores

Financial Data

Financials in:	EUR(mil)
Revenue:	663.6
Net Income:	-0.4
Assets:	206.8
Current Assets:	184.7
Issued Capital:	16.8
Net Worth:	64.4
Date of Financial Data:	01-Dec-2012

1 Year Growth

NA

NA

NA

Corporate Family

Total Corporate Family Members: 67

Company Name	Company Type	Location	Country	Industry	Sales (USD mil)	Employees
Kesko Oyj	Parent	Helsinki	Finland	Grocery Stores	12,366.0	23,200
Kesko Finance and Administration	Division	Helsinki	Finland	Sporting Goods and Recreation Stores		10,000
K-instituutti Oy	Subsidiary	Espoo	Finland	Miscellaneous Educational Services		60
Anttila Oy	Subsidiary	Kesko	Finland	Department Stores	597.0	1,935
Anttila AS	Subsidiary	Viljandi	Estonia	Electronics Wholesale		30
Antti SIA	Subsidiary	Riga	Latvia	Electronics and Appliances Stores		8
Keslog Ltd	Subsidiary	Vantaa	Finland	Trucking	341.7	1,541
Rautakesko Ltd.	Subsidiary	Vantaa	Finland	Residential and Commercial Building Construction	1,591.1	1,201
Raukaesko	Subsidiary	Tallinn	Estonia	Road Transportation Services		500
Rautakesko As	Subsidiary	Tallinn Harjumaa	Estonia	Home and Garden Retail	88.5	409
Rautakesko A/S	Subsidiary	Riga	Latvia	Road Transportation Services		400
Kesko Svenska AB	Subsidiary	Sollentuna	Sweden	Clothing and Apparel Stores		150
Byggmakker Norge AS	Subsidiary	Ski	Norway	Construction and Hardware Materials Wholesale	721.0	82
Norgros Handel AS	Subsidiary	Lillestrøm	Norway	Miscellaneous Wholesale	149.0	432
Byggmakker Distribusjon AS	Subsidiary	Langhus, Akershus	Norway	Home and Garden Retail	41.9	31
ZAO Stroymaster	Subsidiary	Saint Petersburg	Russian Federation	Home and Garden Retail		26
K-maatalouskaupat Oy	Subsidiary	Vantaa	Finland	Machinery Wholesale	24.8	19
Loimaan Maatalous- Ja Rautakauppa Oy	Subsidiary	Vantaa	Finland	Home and Garden Retail
Kesko Food Ltd.	Division	Helsinki	Finland	Grocery Stores		800
Carrols Oy	Subsidiary	Turku	Finland	Restaurants and Bars		4,000
SIA Konekesko Latvia	Subsidiary	Riga	Latvia	Road Transportation Services
Kesko Resource Management Division	Division	Helsinki	Finland	Miscellaneous Professional Services		484
Kesko Real Estate Division	Subsidiary	Helsinki	Finland	Sporting Goods and Recreation Stores
Hameenkylan Kauppa Oy	Subsidiary	Helsinki	Finland	Real Estate Agents and Brokers		1,100
Kesko Information & Logistics Management Division	Subsidiary	Helsinki	Finland	Miscellaneous Professional Services
Ruokakesko LTD	Subsidiary	Helsinki	Finland	Grocery Stores	4,650.5	400
K-citymarket Oy	Subsidiary	Espoo	Finland	Department Stores	853.0	2,865
Kespro Oy	Subsidiary	Vantaa	Finland	Food Manufacturing	1,011.0	508
Pikoil Oy	Subsidiary	Kesko	Finland	Gasoline Stations and Fuel Dealers	1.3
Konekesko Oy	Subsidiary	Vantaa	Finland	Miscellaneous Wholesale	271.3	256
Konekesko Ltd.	Division	Vantaa	Finland	Construction Machinery Manufacturing		250
Kesko Agro Eesti A/S	Subsidiary	Harjumaa	Estonia	Machinery Wholesale		60
Konekesko OOO	Subsidiary	Saint Petersburg	Russian Federation	Machinery Wholesale		1
Intersport Finland LTD	Subsidiary	Espoo	Finland	Sporting Goods and Recreation Stores	233.2	242
VV-Auto Group Oy	Subsidiary	Vantaa	Finland	Motor Vehicle Wholesale	756.7	141
Vv-Autotalot Oy	Subsidiary	Vantaa	Finland	Motor Vehicle and Parts Dealers	440.9	516
Turun VV Auto Oy	Subsidiary	Turku	Finland	Motor Vehicle and Parts Dealers	104.8	95
VV-Autotalot Oy	Subsidiary	Vantaa	Finland	Motor Vehicle and Parts Dealers		20
Auto-Span Oy	Subsidiary	Helsinki	Finland	Motor Vehicle Wholesale		8
Kesko-Western Finland	Division	Tampere	Finland	Sporting Goods and Recreation Stores		100
Kr Fastigheter i Eskilstuna AB	Subsidiary	Sollentuna	Sweden	Commercial Real Estate Leasing		90
Konekesko Eesti AS	Subsidiary	Harjumaa	Estonia	Machinery Wholesale		75
Musta Porssi LTD	Subsidiary	Espoo	Finland	Electronics Wholesale	73.6	74
SIA Konekesko Latvija	Subsidiary	Riga	Latvia	Miscellaneous Wholesale		72
K-Plus Oy	Subsidiary	Helsinki	Finland	Advertising Services	143.0	30
Kenkäkesko Oy	Subsidiary	Espoo	Finland	Clothing and Apparel Wholesale	30.1	29
Bansemko OOO	Subsidiary	Moscow	Russian Federation	Grocery Stores		5
Kesko-Southeastern Finland	Division	Lahti	Finland	Sporting Goods and Recreation Stores		3
Kestra Kiinteistopalvelut Oy	Subsidiary	Helsinki	Finland	Real Estate Agents and Brokers	58.5
K-talouspalvelukeskus Oy	Subsidiary	Tampere	Finland	Consulting Services
Eastern Finland-Kuopio	Division	Kuopio	Finland	Food Manufacturing
Kesko-Southwestern Finland	Division	Turku	Finland	Sporting Goods and Recreation Stores
Kesko-Northern Finland	Division	Oulu	Finland	Road Transportation Services
K rauta SIA	Subsidiary	Riga	Latvia	Architecture and Engineering
Fiesta Real Estate AS	Subsidiary	Tallinn	Estonia	Real Estate Agents and Brokers
K-maatalous Experimental Farm	Subsidiary	Hauho	Finland	Research and Development Services
K-rauta AB	Subsidiary	Taby	Sweden	Home and Garden Retail
Kr Fastigheter i Uppland AB	Subsidiary	Sollentuna	Sweden	Real Estate Agents and Brokers
Agro Trade Latvija SIA	Subsidiary	Jelgava	Latvia	Miscellaneous Wholesale
Interstroy OOO	Subsidiary	Arkhangelsk	Russian Federation	Wood Product Manufacturing
Tampereen Lansikeskus Oy	Subsidiary	Tampere	Finland	Commercial Real Estate Leasing
Kiinteisto Oy Valivainion Ostoskeskus	Subsidiary	Oulu	Finland	Real Estate Agents and Brokers
Kiinteisto Oy Lahden Karisma	Subsidiary	Helsinki	Finland	Commercial Real Estate Leasing
Limingan Portti 1 Oy	Subsidiary	Liminka	Finland	Commercial Real Estate Leasing
Loimaan Maatalous- ja Rautakauppa Oy	Subsidiary	Loimaa	Finland	Machinery Wholesale
Kiinteisto Oy Vantaan Kiitoradantie 2	Subsidiary	Vantaa	Finland	Real Estate Agents and Brokers
Kiinteisto Mesta Oy	Subsidiary	Helsinki	Finland	Grocery Wholesale

Executives Report

Board of Directors

Name	Title	Function
Matti Veikko Iisakki Halmesmäki	Chairman	Chairman
Jukka Henrik Erlund	Board member	Director/Board Member
Minna Annukka Kurunsaari	Board member	Director/Board Member
Jorma Antero Rauhala	Board member	Director/Board Member

Executives

Name	Title	Function
Antti Jussi Ollila	Managing director	Managing Director
Jukka Koivunen	Vice President	Senior Management (General)
Hanne Lehtovuori	HR Director	Human Resources Executive
Petri Mäntysalo	Store Functions Director	Merchandise Management Executive

Annual Profit & Loss

	01-Dec-2012	01-Dec-2011
Period Length	12 Months	12 Months
Filed Currency	EUR	EUR
Exchange Rate (Period Average)	0.777965	0.718922
Consolidated	No	No
Total income	853.0	893.0
Cost of goods sold	574.9	648.7
Other operating costs	90.3	94.9
Total operating costs	771.0	900.9
Interest received from loans	0.2	0.3
Profit before tax	-0.4	-0.4
Total taxation	-	0.0
Income before depreciation	78.1	40.9
Depreciation	7.1	8.5
Profit before financial items	71.0	32.4
Other financial expenses	0.3	0.1
Income/profit after financial items	70.9	32.6
Extraordinary items	71.3	33.0
Income before allocations	-0.5	-0.2
Net income	-0.5	-0.3

Annual Balance Sheet

Financials in: USD (mil)

	01-Dec-2012	01-Dec-2011
Filed Currency	EUR	EUR
Exchange Rate	0.772118	0.74239
Consolidated	No	No
Issued capital	21.8	22.7
Untaxed/reserves allocations	1.6	1.6
Non restricted equity	50.4	52.9
Total stockholders equity	83.4	87.2
Trade creditors	54.4	56.8
Other current liabilities	127.5	115.1
Total current liabilities	182.8	172.1
Machinery and tools	22.9	25.8
Depreciable assets	28.7	26.6
Total non-current assets	28.7	26.6
Stocks	140.6	148.2
Trade debtors	53.4	45.9
Cash and liquid assets	45.2	40.2
Short-term investments	0.0	0.0
Shares in associated companies	0.0	0.0
Total current assets	239.2	234.3
Total assets	267.9	261.0

Annual Ratios

Financials in: USD (mil)

	01-Dec-2012	01-Dec-2011
Period Length	12 Months	12 Months
Filed Currency	EUR	EUR
Exchange Rate	0.772118	0.74239
Consolidated	No	No
Current ratio	1.30	1.40
Quick ratio	0.70	0.60
Asset turnover	0.03%	0.03%
Profit margin	0.08%	0.04%
Equity ratio	0.37%	0.39%
Interest on liabilities	0.02%	-
Risk margin	656.65%	659.81%
Net worth	83.4	87.2
Number of employees	2,865	2,983

DIAMOND INDUSTRY – INDIA

- From time immemorial, India is well known in the world as the birthplace for diamonds.  It is difficult to trace the origin of diamonds but history says that in the remote past, diamonds were mined only in India. Diamond production in India can be traced back to almost 8^th Century B.C.  India, in fact, remained undisputed leader till 18^th Century when Brazilian fields were discovered in 1725 followed by emergence of S. Africa, Russia and Australia.

- The achievement of the Indian diamond industry was possible only due to combination of the manufacturing skills of the Indian workforce and the untiring and unflagging efforts of the Indian diamantaires, supported by progressive Government policies.

- The area of study of family owned diamond businesses derives its importance from the huge conglomerate of family run organizations which operate in the diamond industry since many generations.

- Some of the basic traits of family run business enterprises include spirit of entrepreneurship, mutual trust lowers transaction costs, small, nimble and quick to react, information as a source of advantage and philanthropy.

- Family owned diamond businesses need to improve on many fronts including higher standard of corporate governance, long-term performance – focused strategies, modern management and technology.

- Utmost caution is to be exercised while dealing with some medium and large diamond traders which are usually engaged in fictitious import – export, inter-company transactions, financially assisted by banks. In the process, several public sector banks lost several hundred million rupees. They mostly diverted borrowed money for diamond business into real estate and capital markets.

- Excerpts from Times of India dated 30^th October 2010 is as under –

- Gem & Jewellery Export Promotion Council in its statistical data has shown the export of polished diamonds to have increase by 28 % in February 2013. Compared to $ 1.4 bn worth of polished diamond export in February, 2012, India exported $ 1.84 billion worth of polished diamonds in February 2013. A senior executive of GJEPC said, “Export of cut and polished diamonds started falling month-wise after the imposition of 2 % of import duty on the polished diamonds. But February, 2013 has given a new ray of hope to the industry as the export of polished diamonds has actually increased by 28 %. It means the industry  is on the track of recovery and round tripping of diamonds has stopped completely.” Demand has started coming from the US, the UK, Japan and China. India’s polished diamond export is expected to cross $ 21 bn in 2013-14.

- The banking sector has started exercising restraint while following prudent risk management norms when lending money to gems and jewellery sector. This follows the implementation of Basel III accord – a global voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.13
UK Pound	1	Rs.101.17
Euro	1	Rs.84.59

INFORMATION DETAILS

Report Prepared by :

NNA

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.