50 Waterloo Road NSW 2113 Australia For personal use only ... · alliance is underway and will improve the expanded network’s buying power and ability to serve the trade. Sales

30 November 2012 ASX Limited Company Announcements Office Level 4, Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam METCASH LIMITED – HALF YEAR RESULTS Please find attached ASX announcement and Appendix 4D pertaining to the Metcash

Limited results for the half year ending 31 October 2012.

Yours faithfully Greg Watson Company Secretary

Metcash Limited ABN 32 112 073 480

50 Waterloo Road Macquarie Park

NSW 2113 Australia

PO Box 6226 Silverwater Business Centre

NSW 1811 Australia Ph: 61 2 9751 8200 Fax: 61 2 971 3027

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30 November 2012 ASX Announcement METCASH RECORDS GROWTH IN TOUGH CONDITIONS • Reported revenue rose 3.5% from 1H12 to $6.34 billion • Wholesale sales rose 3.5% from 1H12 to $6.28 billion • EBITA grew 1.2% from 1H12 to $206.2 million • Underlying Profit After Tax grew 4% from 1H12 to $121.3 million • Reported Profit After Tax 1H13 of $82 million • Operating cash flow 1H13 of $144.7 million • Underlying earnings per share 1H13 of 14.5 cents per share • Reported earnings per share, after significant items and discontinued operations

(Franklins Retail Stores) 1H13 of 9.8 cents per share • Dividend per share 11.5 cents fully franked

Metcash Limited today released its first half results for 2013. The company announced it had lifted Earnings Before Interest, Tax and Amortisation (EBITA) 1.2 per cent from $203.7 million for 1H12 to $206.2 million for 1H13. The result was achieved on a 3.5 per cent rise in wholesale sales from $6.07 billion in 1H12 to $6.28 billion. The growth in EBITA was achieved despite continuing headwinds including, tough trading conditions, continuing price deflation and aggressive marketing campaigns being run by the major self supply chains. The company declared an interim dividend of 11.5 cents per share fully franked, consistent with the prior corresponding period. Andrew Reitzer, CEO of Metcash, said the core business remains strong and acquisitions are adding value. “Revenue, underlying earnings and cash flows are all strong. Our net working capital position has improved and our strategy of diversifying the business is beginning to show results,” he said. BUSINESS PILLARS’ PERFORMANCE Metcash Food & Grocery (F&G) The F&G business increased sales by 0.4 per cent to $4.6 billion, however EBITA fell 5.4 per cent to $175 million over the same period. Increased sales as the result of the Franklins acquisition were largely offset by the impact of the Campbells warehouse closures and the loss and closure of a number of stores including the Cornetts/Walters restructuring. Savings from the Campbells warehouse closures are expected to have a favourable impact in 2H, as the full impact of the wind down and closures are realised.


50 Waterloo Road Macquarie Park

NSW 2113 Australia

PO Box 6226 Silverwater Business Centre

NSW 1811 Australia Ph: 61 2 9751 8200

Fax: 61 2 9741 3027

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F&G experienced negative operational leverage due to elevated promotional volumes causing inefficient supply chain peaks. During the half Metcash invested heavily in large marketing programs across the country. The National Locked Down Low Price campaign, and more recently a major relaunch of Supa IGA in NSW were successfully implemented. During the half, deflation in packaged grocery was 0.7 percent and in Fresh Produce it was 13 percent. Market share in the last quarter was down 0.2 per cent on last year primarily as a result of WA where deregulation of shopping hours was introduced. During 1H13, 21 new stores were added to the IGA family with another 38 due to be completed by FY13. When conversions and extensions to existing IGA stores are taken into account this means an additional 28,273 square metres of floor space was added during the Half, that number should rise to 70,099 square metres by the end of the financial year. The growth in Fresh Produce continued with the introduction of the Harvest Market franchise concept. The first three stores are up and running with several more in the pipeline. The Franklins stores have increased our quarterly market share in NSW by 32 percent. However the 18 month delay in the Courts, and the subsequent delays with landlords and retailers, has resulted in more of the marginal Franklins stores needing to be closed than anticipated. Of the 90 Franklins stores, 58 stores have been sold and handed over or are expected to be sold, five stores are under review, while 27 stores have been closed or are likely to be closed. Investment in supply chain improvements is continuing. The KNAPP mini loader at Huntingwood has now been commissioned, it utilises the latest single pick technology and will enhance our offer to the convenience sector. The proof of concept for our warehouse automation, Project Mustang, has been successful and we will be progressing to the next stage in the New Year with an expected ‘go live’ of September 2014. Australian Liquor Marketers (ALM) ALM continued to perform strongly with sales up 14.9 per cent and EBITA growing 26.7 per cent to $16.6 million. The new LMG sales volumes began in October. IBA sales have grown by 16 per cent and volume has grown by 13 per cent. The joint venture investments in the pub sector have seen one hotel acquired with several more acquisitions expected in coming months. The strong volumes and a continued focus on CODB have resulted in a strong first half. Hardware & Automotive Sales, inclusive of the new ABG business, have increased 6.3 percent to $454.2 million compared to 1H12 while EBITA has grown 72.4 percent to $15 million. The strong performance is a result of network expansion, improved buying prices and a stronger market presence and the contribution of the new ABG business. While Mitre 10 trade sales are slightly behind the last half due to a slowing building construction sector retail sales broadly compensated for this. There have been 35 stores that converted to Mitre 10, and three new joint ventures have been set up. The Natbuild alliance is underway and will improve the expanded network’s buying power and ability to serve the trade. Sales in ABG’s retail groups are in line with expectations and growing market share. Like for like franchise sales are in the high single digit range. ABG has begun to benefit from the synergies that have come from integrating the business into Metcash.

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THE FUTURE Mr Reitzer said the results were encouraging in such challenging conditions. “The deflationary trading conditions are expected to continue and we are now expecting to maintain the higher marketing spend into the second half of the year. “Despite the conditions, IGA has seen market share marginally decline by 0.2 percent over the last quarter due to WA trading hours deregulation, JV restructures, and more former Franklins stores closing than expected. The Supa IGA launch in NSW has been very successful and we are seeing the Franklins stores performing strongly once they are in the hands of IGA retailers. The strategic importance of the Franklins purchase cannot be underestimated, it was critical to boost our presence in NSW. “The strong performance of ALM is a real highlight for the half and we are looking forward to their result being stronger in the second half as the LMG contract is bedded down. Mitre 10 has enjoyed strong retail sales and network growth. ABG has performed well and their contribution is in line with expectations,” Mr Reitzer said. Mr Reitzer said there were some negatives in the numbers which were disappointing. “The number of Franklins stores that had to be closed or will be closed was higher than anticipated and the stores had deteriorated more than expected as a result of the delay in the sale. This coupled with the loss and closure of some stores and loss of operating leverage due to ongoing deflation will have to be managed carefully in the second half of the year. Therefore due to the combined impact of these factors the company revised our Full Year Underlying EPS Guidance to -2% to -6%,” Mr Reitzer said. Management remains optimistic that the business model is adaptable to the changing market. New growth initiatives are being adopted including new concept stores, ‘go to market strategies,’ improved marketing, further supply chain automation and network expansion. Several acquisition opportunities are still being carefully considered against the company’s investment criteria. (ENDS) Stephen Woodhill Tim Allerton General Manager Corporate Affairs City Public Relations Metcash Limited 02 9267 4511 or 02 9741 3415 or 0412 715 707 0413 318 455

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Appendix 4D Page 1

Appendix 4D Half-year financial report

Rules 4.2A.3

Appendix 4D

Half-year report


and its Controlled Entities

Half-year Financial Report 31 October 2012

Lodged with the ASX under Listing rule 4.2A This information should be read in conjunction with the 30 April 2012 Annual Report

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Appendix 4D Page 2

For announcement to the market MTS for the half year ended 31 October 2012

Extracts from this report for announcement to the market (see note 1).

$Amillion illi

Revenues from ordinary activities up

3.5%

to

6,335.6

Profit (loss) from ordinary activities after tax attributable to members

down 13.1% to

82.0 Net profit (loss) for the period attributable to members

down 13.1% to

82.0

Please refer to page 3 for detailed explanation of the results

Dividends (distributions)

Amount per security

Franked amount

per security Interim dividend (Half year report only) – MTS

11.5c 11.5c

Previous corresponding period half year ended 31 October 2011 (Half year report) -

11.5c 11.5c

Record date for determining entitlements to the dividend, (in the case of a trust, distribution)

14 December 2012

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Appendix 4D Page 3

Explanatory Note on Results Earnings before interest, tax and amortisation of customer contracts for the year is 1.2% up on the prior year, whilst underlying profit after tax (before amortisation and significant items) has increased by 4.0%. Underlying earnings per share was down 4.6%. Reported profit after tax from continuing operations was up 18.5% with earnings per share calculated on the same basis up 8.7%.

EPS Equivalent

Note 2012 2011 Change 2012 2011 Change

$'m $'m % $'m $'m %

Sales

6,278.9 6,068.9 3.5

Earnings before interest, tax and amortisation (EBITA)

206.2 203.7 1.2

Net finance costs

(29.8) (32.4) (8.0) Profit before tax and amortisation

176.4 171.3 3.0

Income tax expense

(53.1) (51.3) 3.5 Non controlling interest

(2.0) (3.4) (41.2)

Underlying profit after tax 1 121.3 116.6 4.0 14.5 15.2 (4.6) Amortisation of customer relationships

(5.3) (4.1) 29.3

Significant items after tax

- (14.6) Reported profit after tax from continuing

operations

116.0 97.9 18.5 13.8 12.7 8.7 Loss after tax from discontinued operations

(34.0) (3.5)

Net profit for the period

82.0 94.4 (13.1) 9.8 12.3 (20.3) Weighted average shares outstanding (millions)

838.4 769.5

1. Underlying earnings represents reported profit after tax from continuing operations attributable to equity holders of the parent, excluding intangible amortisation and significant items after tax, as reconciled in the table above. Underlying earnings per share (EPS) is calculated by dividing underlying earnings by the weighted average shares outstanding during the period. The Directors have provided underlying earnings information after careful consideration of the requirements and guidelines contained in ASIC Regulatory Guide 230 (Disclosing non-IFRS financial information). Underlying earnings information, including this reconciliation to net profit, has been provided in order to meet the demands from users of the financial reports for information to better understand aspects of the Group’s performance. The Directors believe that underlying earnings is the most appropriate measure of the maintainable earnings of the Group and thereby best reflects the core drivers and ongoing influences upon those earnings. For this reason, the impact of significant items is excluded from the measurement of underlying earnings and specific information on these items is provided under Note 3. Underlying earnings and underlying EPS are used for the purposes of providing guidance to shareholders and the market and are calculated on a consistent basis each year.

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Appendix 4D Page 4

$-

$-

$-

Earnings per security (EPS) 1. Details of basic and diluted EPS reported separately in accordance with AASB 133: Earnings Per Share are as follows.

MTS for 6 months

Basic Earnings per share 9.78 Cents

Diluted Earnings per share 9.75 Cents

Earnings used in Basic and Diluted earnings per share = 82.0 million

· Weighted average number of ordinary shares (used in Basic EPS) 838,411,932 · There have been no changes to ordinary shares since balance date · Weighted average number of ordinary shares (used in Diluted EPS) = 841,163,778 (838,411,932 ordinary shares + 2,751,846 potential ordinary shares). · Weighted average number of converted, lapsed or cancelled potential ordinary shares included in the calculation of diluted EPS = 1,781,574 · 13,580,411 of employee options with an exercise price of $4.2672 are considered non-dilutive and excluded from potential ordinary shares. There have been no issues of potential ordinary shares after balance date.

Previous NTA backing 2. Net tangible asset backing per ordinary security (cents)

Current period

(5.32) corresponding period

(4.03)

Discontinuing Operations (Entities must report a description of any significant activities or events relating to discontinuing operations or, the details of discontinuing operations they have disclosed in their accounts).

3. Discontinuing Operations

On 30 September 2011, being the date of acquisition of the Franklins Group, Metcash announced its intention to dispose of Franklins corporate retail stores to independent retailers. These retail operations, along with a surplus property development joint venture, have been classified as discontinued operations. Accordingly, the inventory, property, plant and equipment, software intangibles and goodwill associated with the corporate retail stores and the loans and equity accounted investment in the property joint venture have been classified as disposal group assets. Metcash plans to dispose of these assets as soon as practicable. Otherwise, the wholesale operations of the Franklins Group have been classified as continuing operations within the Food and Grocery segment.

Control gained over entities having material effect 4.1 Name of entity (or group of entities) Refer note 11

4.2 Date of the gain or loss of control

4.3 C on s o l i d a t e d profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) since the date in the current period on which control was acquired (if material)

Loss of control of entities having material effect

5.1 Name of entity (or group of entities)

5.2 C on s o l i d a t e d profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) for the current period to the date of loss of control

5.3 Date to which the profit (loss) has been calculated

5.4 C on s o l i d a t e d profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) while controlled during the whole of the previous corresponding period

5.5 Contribution to consolidated profit (loss) from ordinary activities and extraordinary items from sale of interest leading to loss of control

Refer note 11

Refer note 11

N/A

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Appendix 4D Page 5

Current Year $A million Previous Year $A million 101.3 88.7

- - - -

101.3 88.7

Dividends (in the case of a trust, distributions)

6.1 Date the dividend (distribution) is payable

11 January 2013

6.2 Record date to determine entitlements to the dividend (distribution) (i.e., on the basis of registrable transfers received by 5.00 pm if securities are not CHESS approved, or security holding balances established by 5.00 pm or such later time permitted by SCH Business Rules if securities are CHESS approved)

14 December 2012

6.3 If it is a final dividend, has it been declared?

(Preliminary final financial report only)

Amount per security

N/A

(Preliminary final financial report only)

Amount per security Franked amount per security at 30% tax

Amount per security of foreign source dividend

6.4 Final dividend: Current year - MTS N/A N/A - c

6.5 Previous year – MTS N/A N/A - c

(Half yearly and preliminary final financial reports)

6.6 Interim dividend: Current year - MTS 11.5c 11.5c - c

6.7 Previous year -MTS 11.5 c 11.5c - c

Half-year financial report – interim dividend (distribution) on all securities

6.8 Ordinary securities (each class separately) 6.9 Preference securities (each class separately) 6.10 Ordinary securities (each class separately) 6.11 Total

The dividend or distribution plans shown below are in operation.

DRP suspended 8 February 2007 per shareholder mailout

The last date (s) for receipt of election notices for the dividend or N/A

Any other disclosures in relation to dividends (distributions). (For half yearly reports, provide details in accordance with AASB 134 Interim Financial Reporting)

Nil

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Details of aggregate share of profits (losses) of associates and joint venture entities

Group's share of associates' and joint venture entities': 7.1 Profit (loss) from ordinary activities before tax 7.2 Income tax on ordinary activities 7.3 Profit (loss) from ordinary activities after tax 7.4 Extraordinary items net of tax 7.5 Net profit (loss) 7.6 Adjustments 7.7 Share of net profit (loss) of associates and joint venture entities

Previous Current period corresponding period

$A million $A million (0.1) (0.4)

- - (0.1) (0.4)

(0.1) (0.4)

(0.1) (0.4)

Material interests in entities which are not controlled entities The economic entity has an interest (that is material to it) in the following entities. (If the interest was acquired or disposed of during either the current or previous corresponding period, indicate date of acquisition ("from dd/mm/yy") or disposal ("to dd/mm/yy").)

Name of entity 8.1 Equity accounted associates and joint venture entities Abacus Independent Retail Property Trust Ritchies Stores Pty Ltd BMS Retail Group Pty Ltd Dramet Pty Ltd Dart Trading Co Pty Ltd Bamlane Pty Ltd Mundin Pty Ltd G'Butt Pty Ltd Mussen Pty Ltd Ully Pty Ltd Adcome Pty Ltd Metfood Pty Ltd Progressive Trading Pty Ltd Sunshine Hardware Pty Ltd Northern Hardware Pty Ltd Plumpton Park Development Pty Ltd Watlock Pty Ltd 8.2 Total 8.3 Other material interests 8.4 Total

Percentage of ownership interest held at end of period or date of disposal

Current period 25.0% 26.0% 25.1% 26.0% 26.0% 26.0% 26.0% 26.0% 26.0% 26.0% 45.0% 50.0% 52.2% 49.0% 49.9% 50.0% 49.0%

Previous corresponding

period 25.0% 26.0% 25.1% 26.0% 26.0% 26.0% 26.0% 26.0% 26.0% 26.0% 45.0% 50.0% 52.2% 49.0% 49.9% 50.0%

-

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Appendix 4D Page 7

Issued and quoted securities at end of current period – Metcash Limited (MTS) (Description includes rate of interest and any redemption or conversion rights together with prices and dates.) Category of securities 9.1 Preference securities (description) 9.2 Changes during current period (a) Increase through issue – institutional placement (b) Increase through issue – share placement 9.3 Ordinary securities 9.4 Changes during current period (a) Increases through conversion of employee options

Total number Number quoted Issue price per security Amount paid up per (cents) security (cents)

- - - -

92,857,143 92,587,143 350.0 350.0 16,501,779 16,501,799 303.0 303.0

880,704,786 880,704,786 - -

- - - -

- - - -

(b) Decreases through returns of capital, buybacks 9.5 Convertible debt securities) (description and conversion factor) 9.6 Changes during current period

(a) Increase through issues 9.7 Options (description and conversion factor) 9.8 Issued during current period Reinstated 9.9 Exercised during current period 9.10 Expired during current period

Total number Exercise price Expiry date (if any)

13,580,411 426.7 07/02/2014

- -

- -

1,531,742 various 9.11 Debentures (description)

9.12 Changes during current period (a) Increases through issues (b) Decreases through securities matured, converted

(description)

-

-

-

-

-

9.13 Unsecured notes (description) 9.14 Changes during current period (a) Increases through issues (b) Decreases through securities matured, converted.

(description)

-

-

-

-

- (Half-Year financial report only)

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Appendix 4D Page 8

Compliance statement

1 This report has been prepared in accordance with AASB Standards, other AASB authoritative pronouncements and Urgent Issues Group Consensus Views or other standards acceptable to ASX.

Identify other standards used

2 This report, and the accounts upon which the report is based (if separate), use the same accounting policies.

3 This report does give a true and fair view of the matters disclosed.

4 This report is based on accounts to which one of the following applies. (Tick one)

The accounts have been audited. The accounts have been subject to review.

The accounts are in the process of being audited or subject to review.

The accounts have not yet been audited or reviewed.

5 If the audit report or review by the auditor is not attached, details of any qualifications are attached. (Preliminary Final only - the audit report or review by the auditor must be attached to this report if this report is to satisfy the requirements of the Corporations Act.)

6 The entity has a formally constituted audit committee.

Sign here: .................................................................................. Date: 30 November 2012 (Secretary)

Print name: Greg Watson

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Metcash Limited and its Controlled Entities

ABN 32 112 073 480

Half-Year Financial Report for the half-year ended 31 October 2012

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METCASH HALF-YEAR FINANCIAL REPORT 2012

Page 1

Contents

Contents .................................................................................................................................................................. 1

Directors’ Report ...................................................................................................................................................... 2

Statement of Comprehensive Income ..................................................................................................................... 3

Statement of Financial Position................................................................................................................................ 4

Statement of Changes in Equity .............................................................................................................................. 5

Statement of Cash Flows ........................................................................................................................................ 6

Notes to the Financial Statements ........................................................................................................................... 7

Directors' Declaration .............................................................................................................................................16

Independent Auditor's Review Report.....................................................................................................................17

Auditor's Independence Declaration .......................................................................................................................19

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Directors’ Report ABN 32 112 073 480 DIRECTORS Peter L Barnes (Chairman) Andrew Reitzer (CEO) Patrick N J Allaway (appointed 7 November 2012) Fiona E Balfour Michael R Butler Neil D Hamilton Edwin M Jankelowitz Richard A Longes (resigned 30 August 2012) Ian R Morrice (appointed 12 June 2012) V Dudley Rubin Except as noted, directors were in office for this entire period. REVIEW AND RESULTS OF OPERATIONS Consolidated net profit after income tax attributable to shareholders for the half-year was $82.0 million (2011: $94.4 million). AUDITOR INDEPENDENCE The directors have received the independence declaration on page 19 from the auditors of Metcash Limited, which forms part of the Directors' Report. ROUNDING The amounts contained in this report and in the financial report have been rounded to the nearest $100,000 (where rounding is applicable) under the option available to the company under ASIC Class Order 98/0100. The company is an entity to which the class order applies. Signed in accordance with a resolution of the directors.

Andrew Reitzer Director Sydney, 30 November 2012

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STATEMENT OF COMPREHENSIVE INCOME

For the half-year ended 31 October 2012

2012 2011 NOTES $m $m Revenue 3(i) 6,335.6 6,123.0 Cost of sales (5,694.3) (5,500.3) Gross profit 641.3 622.7 Distribution costs (204.0) (212.8) Administrative costs (232.8) (203.8) Share of loss of associates (0.1) (0.4) Significant items 3(iv) 1.1 (19.5) Finance costs 3(v) (33.3) (38.5) Profit from continuing operations before income tax 172.2 147.7 Income tax expense (54.2) (46.4) Net profit for period from continuing operations 118.0 101.3 Net loss after tax for the period from discontinued operations 5 (34.0) (3.5) Net profit for the period 84.0 97.8

Other comprehensive income Foreign currency translation adjustments 0.5 0.7 Cash flow hedge adjustment 1.4 (8.3) Income tax (benefit)/expense on items of other comprehensive income (0.4) 2.3 Other comprehensive income for the period, net of tax 1.5 (5.3) Total comprehensive income for the period 85.5 92.5

Profit for the period is attributable to: Equity holders of the parent 82.0 94.4 Non controlling interests 2.0 3.4 84.0 97.8

Total comprehensive income for the period is attributable to: Equity holders of the parent 83.5 89.1 Non controlling interests 2.0 3.4 85.5 92.5

Earnings per share for profit from continuing operations attributable to the ordinary equity holders of the company: - basic earnings per share (cents) 13.83 12.72 - diluted earnings per share (cents) 13.79 12.70 Earnings per share for loss from discontinued operations attributable to the ordinary equity holders of the company: - basic earnings per share (cents) (4.05) (0.46) - diluted earnings per share (cents) (4.04) (0.46) Earnings per share attributable to ordinary equity holders of the company: - basic earnings per share (cents) 9.78 12.26 - diluted earnings per share (cents) 9.75 12.24 The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

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STATEMENT OF FINANCIAL POSITION

As at 31 October 2012

October 2012

April 2012

NOTES $m $m ASSETS Current assets Cash and cash equivalents 42.0 51.5 Trade and other receivables 6 1,090.7 986.1 Inventories 859.8 833.6 Income tax receivable 46.0 24.4 Disposal groups and assets held for sale 5 86.2 116.5 Prepayments and other assets 5.2 6.5 Total current assets 2,129.9 2,018.6 Non-current assets Derivative financial instruments 36.2 27.8 Trade and other receivables 6 50.9 51.3 Investments in associates accounted for using the equity method 77.4 68.3 Other financial assets - 0.2 Property, plant and equipment 275.1 224.4 Net deferred tax assets 82.2 95.5 Intangible assets and goodwill 1,679.4 1,551.9 Total non-current assets 2,201.2 2,019.4 TOTAL ASSETS 4,331.1 4,038.0 LIABILITIES Current liabilities Trade and other payables 1,615.8 1,372.7 Interest bearing loans and borrowings 7.6 17.8 Derivative financial instruments 3.9 5.2 Provisions 175.9 155.1 Income tax payable - 24.9 Other financial liabilities 0.2 0.4 Total current liabilities 1,803.4 1,576.1 Non-current liabilities Interest bearing loans and borrowings 749.6 974.0 Provisions 163.5 151.4 Other financial liabilities 1.5 1.4 Total non-current liabilities 914.6 1,126.8 TOTAL LIABILITIES 2,718.0 2,702.9 NET ASSETS 1,613.1 1,335.1 EQUITY Contributed equity 7 2,284.9 1,914.7 Other equity (765.9) (765.9) Other reserves 50.0 26.0 Retained earnings 25.7 86.3 Parent interest 1,594.7 1,261.1 Non controlling interests 18.4 74.0 TOTAL EQUITY 1,613.1 1,335.1

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

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STATEMENT OF CHANGES IN EQUITY For the half-year ended 31 October 2012

Contributed equity

Other equity

Share-based

payments Retained earnings

Capital reserve

Foreign currency

translation reserve

Cash flow hedge

reserve

Owners of the parent

Non controlling

interest Total equity $m $m $m $m $m $m $m $m $m $m At 1 May 2012 1,914.7 (765.9) 23.6 86.3 12.8 (5.9) (4.5) 1,261.1 74.0 1,335.1 Total comprehensive income, net of tax − − − 82.0 − 0.5 1.0 83.5 2.0 85.5 Transactions with owners in their capacity as owners: Proceeds from equity raising 375.0 − − − − − − 375.0 − 375.0 Share issue costs net of tax (4.8) − − − − − − (4.8) − (4.8) Share-based payments − − 0.4 − − − − 0.4 − 0.4 Dividends paid − − − (142.6) − − − (142.6) (1.8) (144.4) Non controlling interest attributable to business combinations − − − − − − − − 14.2 14.2 Acquisition of 49.9% equity interest in Mitre 10 Group − − − − 22.1 − − 22.1 (70.0) (47.9) At 31 October 2012 2,284.9 (765.9) 24.0 25.7 34.9 (5.4) (3.5) 1,594.7 18.4 1,613.1 At 1 May 2011 1,904.9 (765.9) 22.3 208.0 12.8 (6.9) − 1,375.2 67.6 1,442.8 Total comprehensive income, net of tax − − − 94.4 − 0.7 (6.0) 89.1 3.4 92.5 Transactions with owners in their capacity as owners: Exercise of options 9.8 − − − − − − 9.8 − 9.8 Share-based payments − − 1.3 − − − − 1.3 − 1.3 Dividends paid − − − (123.0) − − − (123.0) (1.8) (124.8) At 31 October 2011 1,914.7 (765.9) 23.6 179.4 12.8 (6.2) (6.0) 1,352.4 69.2 1,421.6 Note 7 8

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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STATEMENT OF CASH FLOWS For the half-year ended 31 October 2012 2012 2011 NOTES $m $m Cash flows from operating activities: Receipts from customers 6,655.8 6,470.2 Payments to suppliers and employees (6,361.4) (6,058.8) Interest received 3.5 6.1 Finance costs (30.8) (36.3) Income tax paid (58.1) (58.6) Goods and services tax paid (64.3) (70.2) Net cash generated by operating activities 144.7 252.4 Cash flows from investing activities: Proceeds from sale of property, plant and equipment 1.0 6.0 Purchase of property, plant and equipment (23.7) (34.2) Payments for intangibles (24.1) (10.4) Proceeds from loans repaid by other entities 12.8 6.0 Loans to other entities (8.7) (1.8) Proceeds from sale of discontinued operations 5 35.1 - Payment on acquisition of businesses net of cash acquired 11 (88.5) (185.2) Payment on acquisition of non controlling interest 8 (47.9) - Payment on acquisition of associates (8.8) (1.0) Net cash used in investing activities (152.8) (220.6) Cash flows from financing activities: Proceeds from the issue of ordinary shares 375.0 9.8 Share issue costs (7.0) - Proceeds from borrowings – other 2,230.0 2,158.0 Repayments of borrowings – other (2,452.7) (1,997.1) Payment of dividends on ordinary shares (142.6) (123.0) Payment of dividends to non controlling interests (1.8) (1.8) Payment of refinancing costs - (3.6) Repayment of finance lease principal (2.3) (4.5) Net cash (used in)/generated by financing activities (1.4) 37.8 Net (decrease)/increase in cash and cash equivalents (9.5) 69.6 Add opening cash brought forward 51.5 152.9 Effect of exchange rate changes on cash - 0.4 Cash and cash equivalents at end of period 42.0 222.9

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

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NOTES TO THE FINANCIAL STATEMENTS For the half-year ended 31 October 2012

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of preparation The financial report of Metcash Limited (the Company) and its controlled entities (the Group) for the period ended 31 October 2012 was authorised for issue in accordance with a resolution of the Directors on 30 November 2012. The half-year financial report does not include all notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investment activities of the Group as the annual financial report. The half-year financial report should be read in conjunction with the annual financial report of Metcash Limited for the year ended 30 April 2012. It is also recommended that the half-year report be considered together with any public announcements made by Metcash Limited during the half-year ended 31 October 2012. The half-year financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, AASB 134 “Interim Financial Reporting” and other mandatory professional reporting requirements. The same accounting policies have been applied by each entity in the Group and these policies are consistent with those adopted and disclosed in the annual financial report for the year ended 30 April 2012. Metcash business is seasonal in nature, given increased trading through festive seasons of Christmas and Easter. Earnings are therefore weighted to the second half of the financial year.

2. SEGMENT INFORMATION

The Group has identified its operating segments based on the internal reports that are reviewed and used by the CEO (the chief operating decision maker) in assessing performance and in determining the allocation of resources. The operating segments are identified by management based on the differences in the products and services provided. Discrete financial information about each of these operating segments is reported to the CEO on at least a monthly basis. The reportable segments are based on the aggregated operating segments determined by the similarity of the products sold, as these are the sources of the Group’s major risks and have the most effect on the rates of return. Information reported to the Group’s Chief Executive Officer for the purposes of resource allocation and assessment of performance is more specifically focused on the category of each type of product. The Group’s reportable segments are therefore as follows:

• Food and Grocery activities comprise the distribution of dry grocery, perishable and general merchandise supplies to retail outlets.

• Liquor activities comprise the distribution of liquor products to retail outlets and hotels. • Hardware and Automotive comprises the distribution of hardware supplies and automotive parts and

accessories to retail outlets. On 25 January 2012 the Group announced the amalgamation of IGA>D, IGA Fresh, Campbells Cash and Carry and all the associated merchandising and marketing functions into a single Food & Grocery business pillar. This amalgamation facilitated a change in reporting structures with previously disclosed Food Distribution and Cash and Carry Distribution segments now combined into the Food and Grocery segment. The comparative segment information has been restated. The operating segments Automotive and Hardware business units have been combined as one reportable segment as these segments do not meet the quantitative thresholds prescribed by AASB 8 Operating Segments. The selling price between segments is at normal selling price and is paid under similar terms and conditions as any other customers of the Group. Sales revenue (wholesale sales) from the sale of goods within Franklins from its wholesale operations (Food and Grocery segment – continuing operations) to its retail operations (corporate stores – discontinued operations) have been eliminated from the Food and Grocery segment. Accordingly, the Food and Grocery segment results include wholesale sales to Franklins continuing stores but do not include sales to closing or closed stores or Franklins discontinued retail margins.

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METCASH HALF YEAR FINANCIAL REPORT 2012

NOTES TO THE FINANCIAL STATEMENTS


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2. SEGMENT INFORMATION (Continued) Business segments

Liquor

Hardware and Automotive

Results from continuing operations

Food and Grocery 2012 2011 2012 2011 2012 2011 2012 2011 $m $m $m $m $m $m $m $m Sales to external customers 4,552.1* 4,533.7* 1,272.6 1,108.0 454.2 427.2 6,278.9 6,068.9 Inter-segment revenues 14.1 13.9 16.8 42.4 - - 30.9 56.3 Total segment revenue 4,566.2 4,547.6 1,289.4 1,150.4 454.2 427.2 6,309.8 6,125.2

Segment profit/(loss) before tax 175.0 185.0 16.6 13.1 15.0 8.7 206.6 206.8 The above excludes the segment results from discontinued operations. (Refer to Note 5) * Includes wholesale sales made to Franklins retail stores that have not closed in the current period or have been identified for closure in the future of $183.3 million (2011: $35.6 million) i) Segment revenue reconciliation to the statement of comprehensive income: 2012 2011 $m $m Total segment revenue 6,309.8 6,125.2 Inter-segment revenues elimination (30.9) (56.3) Rent income 53.2 48.0 Interest from other persons/corporations 3.5 6.1 Total revenue from continuing operations 6,335.6 6,123.0

ii) Segment profit before tax reconciliation to the statement of comprehensive income: 2012 2011 $m $m Segment profit before tax 206.6 206.8 Net finance costs (29.8) (32.4) Rent income 53.2 48.0 Rent expense (53.2) (48.0) Share based payments (0.4) (1.4) Amortisation of customer relationships and licence agreements (5.3) (4.1) Significant items 1.1 (19.5) Corporate/unallocated - (1.7) Net profit from continuing operations before income tax 172.2 147.7

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3. REVENUES AND EXPENSES 2012 2011 $m $m (i) Revenue Sale of goods 6,278.9 6,068.9 Rent 53.2 48.0 Interest received 3.5 6.1 6,335.6 6,123.0 (ii) Operating lease rental Minimum lease payments – stores 53.2 48.0 Minimum lease payments – warehouse and other 51.8 46.4 (iii) Expenses Depreciation of property, plant and equipment 17.4 17.4 Amortisation of software 5.3 5.2 Amortisation of customer relationships and licence agreements 5.3 4.1 28.0 26.7 (iv) Significant items Acquisition costs for Automotive Brands Group 2.4 - Franklins acquisition and restructure costs * - Acquisition (refund)/costs (3.5) 3.1 - Distribution centre closure costs - 16.4 (1.1) 19.5 Income tax expense/(benefit) 1.1 (4.9) - 14.6 (v) Finance costs Interest expense 30.8 35.8 Deferred borrowing cost 0.8 2.2 Finance costs attributable to discounting of provisions 1.7 0.5 33.3 38.5 * Metcash completed the acquisition of the IGH Group (Franklins) on 30 September 2011. During the prior period, Metcash incurred legal and other costs in connection with the legal proceedings brought by the Australian Competition and Consumer Commission and finally in completing the acquisition. Provision was also made for the accelerated exit of the Blacktown and Silverwater distribution facilities, which was brought forward as a result of the decision to acquire Franklins in July 2010. Metcash subsequently restructured its warehouse operations by consolidating the Blacktown, Silverwater and Franklins warehouse operations at the new NSW mega distribution centre at Huntingwood. This prior period provision comprised various lease and make-good obligations and the impairment of plant and equipment at Blacktown and Silverwater. During the current period, Metcash received a reimbursement of $3.5 million of costs from the Australian Consumer and Competition Commission (ACCC) as a result of a court order in relation to the prior period legal proceedings. 4. DIVIDENDS PAID AND PROPOSED 2012 2011 $m $m Dividends paid on ordinary shares during the half year Fully franked dividends (2012: 16.5 cents, 2011: 16.0 cents) 142.6 123.0

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5. DISCONTINUED OPERATIONS On 30 September 2011, being the date of acquisition of the Franklins Group, Metcash announced its intention to dispose of Franklins corporate retail stores to independent retailers. These retail operations, along with a surplus property development joint venture, have been classified as discontinued operations. Accordingly, the inventory, property, plant and equipment, software intangibles and goodwill associated with the corporate retail stores and the loans and equity accounted investment in the property joint venture have been classified as disposal group assets. Metcash plans to dispose of these assets as soon as practicable. The wholesale operations of the Franklins Group have been classified as continuing operations within the Food and Grocery segment. 2012 2011 $m $m Revenue from sale of goods 76.3 21.9 Cost of sales and other costs (118.4) (26.9) Finance costs attributable to discounting of provisions (6.5) − Loss before income tax (48.6) (5.0) Income tax benefit 14.6 1.5 Net loss from discontinued operations (34.0) (3.5) Net loss is attributable to: Equity holders of the parent (34.0) (3.5) The net cash flows from operating and investing activities, per the Statement of Cash Flows, includes cash outflows of $42.2 million (2011: $5.0m) and inflows of $35.1 million respectively from discontinued operations. There were no financing cash flows specifically related to discontinued operations. 6. RECEIVABLES October April 2012 2012 $m $m Current Trade receivables - securitised 801.7 689.1 Trade receivables - non-securitised 187.8 194.5 Allowance for impairment loss (57.4) (43.4) 932.1 840.2 Customer loans 27.8 23.6 Allowance for impairment loss (1.6) (1.6) 958.3 862.2 Other receivables 89.9 93.4 Marketing debtors 42.5 30.5 1,090.7 986.1 Non-current Customer loans 77.3 77.3 Allowance for impairment loss (31.5) (31.5) Other receivables 5.1 5.5 50.9 51.3

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7. CONTRIBUTED EQUITY October April 2012 2012 $m $m Ordinary shares issued and fully paid 2,284.9 1,914.7 2012 Number of

shares 2012 $’m

Movements in ordinary shares on issue: At 1 May 2012 771,345,864 1,914.7 Issued during the period: - Institutional placement – at 350.0 cents per share 92,857,143 325.0 - Share placement plan – at 303.0 cents per share 16,501,779 50.0 - Equity raising costs net of tax - (4.8) At 31 October 2012 880,704,786 2,284.9 8. CAPITAL RESERVES October April 2012 2012 $m $m At 1 May 2012 12.8 12.8 Acquisition of non controlling interest* 22.1 - At 31 October 2012 34.9 12.8 * On 31 July 2012 Metcash Limited effectively acquired, through its wholly owned subsidiary Mittenmet Limited, the remaining 49.9% equity interest in the Mitre 10 Group. As part of the initial 50.1% acquisition a series of Redeemable Convertible Preference Shares (RCPS) were issued by Mittenmet to former Mitre 10 shareholders. The RCPS entitled the holders to a 49.9% equity interest in Mittenmet and gave Metcash the right to request Mittenmet redeem the RCPS for cash. On 31 July 2012 Metcash exercised its right and the RCPS were redeemed for a consideration of $46.5 million. The redemption is treated as a transaction between equity holders in accordance with AASB 127 Consolidated and Separate Financial Statements. The difference between the non controlling interest of $70 million assumed and the redemption consideration of $46.5 million and transaction costs of $1.4 million has been recognised as a credit to capital reserves. 9. GOODWILL October April 2012 2012 $m $m

The intangibles balance in the consolidated statement of financial position includes the following movements in goodwill for the half year: Carrying amount at the beginning of the period 1,283.6 1,040.3 Additions arising from business combinations (note 11) 45.3 256.0 Adjustment attributable to finalisation of Franklins acquisition (note 11)

16.2 -

Disposals

(2.4) (10.2) Impairment

- (2.5)

Carrying amount at the end of the period 1,342.7 1,283.6

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10. CONTINGENT ASSETS AND LIABILITIES

October April

2012 2012 $m $m

Bank guarantees to third parties in respect of property lease obligations 31.3 30.1 Bank guarantees in respect of Workcover 32.1 30.0 Stand by letter of credits 0.8 0.5 Face value of the outstanding charges due to American Express (a) 256.1 281.0 Put options to third parties (b) 12.9 13.3 Contingent loan to a third party (c) 0.3 0.3

(a) American Express charge card On 9 May 2007 Metcash Trading Limited entered into an agreement with American Express (Amex), due to expire on 31 January 2013, in relation to Customer Charge Cards. Under the agreement, should a customer default on payment, where Amex has previously made a payment to Metcash Trading Limited, then Metcash Trading Limited must pay Amex an amount equal to the charge outstanding. The maximum amount payable shall be limited to the actual face value of the outstanding charge due to Amex. This does not include any interest or other fees payable by the customer to Amex. Metcash Trading Limited shall have no other obligation to Amex in respect of the outstanding charge and shall not be liable for any costs, loss or liability of any nature whatsoever incurred by Amex as a result of the failure by the customer to make payment. (b) Put options for sale of retail store assets The Group has granted put options relating to the sale of retail store assets to certain customers and associates. The holders of the put option have the right to "put" these non-financial assets back to the Group within an agreed period and under certain prescribed circumstances. The estimate of the financial effect of the put options, if exercised, is the aggregate of the purchase price as defined in the option deed or business sale agreement. (c) Contingent loans The Group has granted a loan to a customer for the purchase of a supermarket business. A portion of the loan receivable has a deferred component in the amount of $0.3m which is repayable upon the achievement of certain conditions, as specified in the loan document. If the stated conditions are not achieved, the customer is released from the obligation to repay the deferred component to the Group. (d) Australian Tax Office Metcash has been subject to an income tax audit by the Australian Tax Office (ATO) covering the 2005 - 2008 income years, which has resulted in the following two disputed items. The ATO have advised Metcash that there are no other areas under consideration and that the audit has otherwise been concluded. Action Stores Metcash received notices of amended assessments dated 26 May 2011 and 13 June 2011 from the Australian Taxation Office (ATO) seeking payment of a total of $48.8 million. The amended assessments are in relation to a disputed tax liability arising from the sale of various ex-Action Supermarket retail businesses (Action Stores) during the 2007 and 2008 fiscal years that resulted in a net tax loss. The Action Stores were acquired by Metcash in fiscal 2006 as a part of the acquisition of Foodland Associated Limited (FAL), and were sold as part of Metcash’s ongoing business activities to enhance Australia’s independent retailer network. The total amount in dispute comprises primary tax of $32.9 million and then flowing from that, interest and penalties of $15.9 million. Metcash intends to challenge the amended assessments, which assert that the net tax losses from the sale of the Action Stores should be treated as being on capital account. These net tax losses were incurred as part of Metcash’s ordinary business activities and as such, Metcash has always considered the correct treatment to be on revenue account. Metcash has received external advice in relation to the dispute. Metcash has lodged objections to these amended assessments, and if necessary will appeal the decision to the Federal Court. Metcash is firmly of the opinion that the treatment it has adopted is appropriate to the circumstances. Based on the strength of its position, Metcash has not recorded an expense in relation to the amended assessments in the current or prior period results presented in these financial statements.

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10. CONTINGENT ASSETS AND LIABILITIES (Continued) In accordance with ATO policy, Metcash entered into a 50/50 payment agreement with the ATO in relation to the disputed tax liability of $48.8 million. Under the agreement, Metcash has paid the ATO 50% of the disputed tax liability ($24.4 million) in June/July 2011 and in return the ATO has agreed not to seek recovery of the balance until the Commissioner has determined the objection or when a decision is handed down by the relevant appellate tribune or court (as appropriate). The payment amount of $24.4 million has been disclosed as income tax receivable in the statement of financial position. Foreign Tax Credits Metcash received notices of amended foreign tax credit (FTC) determinations dated 29 May 2012 from the ATO seeking payment of a total of $23.4 million. The amended determinations are in relation to the imposition of what is effectively double taxation on interest income derived by Metcash’s foreign subsidiaries on intercompany loans during the 2006 and 2007 fiscal years. The ATO contends that Metcash is not entitled to any credit for taxes it has already paid on this interest income in South Africa. The total amount in dispute comprises primary tax of $23.4 million. The ATO has not sought to impose any penalties or interest in respect of this amount. Metcash has received external advice in relation to its position. Metcash is firmly of the view that:

• the imposition of double taxation is both inconsistent with the law and contrary to public policy; and • the Commissioner is in any event out of time to issue such amended

FTC determinations given the period of time elapsed since the original determinations. Metcash has lodged objections to these determinations, and if necessary will appeal the decision to the Federal Court. Based on the strength of its position, Metcash has not recorded an expense in relation to the amended determinations in the current year results presented in these financial statements. As the relevant subsidiaries subsequently became members of the Australian tax group, the FTC dispute is restricted solely to the 2006 and 2007 income years. There will be no impact in respect of the 2008 and subsequent income years in connection with this matter. 11. BUSINESS COMBINATIONS

During the period the Metcash Group acquired the following entities or assets: Date of acquisition Entity purchased % Acquired 10 May 2012 Trevisan Pty Ltd 100.0% (d) 11 May 2012 Fagg’s Geelong Pty Ltd 75.0% (d) 1 July 2012 Automotive Brands Holdings Pty Ltd (ABG) 75.1% (c) 1 October 2012 Tasmania Hardware Pty Ltd 80.0% (d) Details of the fair value of the assets and liabilities acquired are as follows: ABG Other Total $m $m $m (a) Purchase consideration: Total purchase consideration 54.7 36.0 90.7 Less: cash acquired - (2.2) (2.2) Net purchase consideration 54.7 33.8 88.5 Less: fair value of net identifiable assets acquired (b) (37.6) (5.6) (43.2) Goodwill 17.1 28.2 45.3

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11. BUSINESS COMBINATIONS (Continued) ABG Other Total $m $m $m (b) Assets acquired and liabilities assumed: The assets and liabilities arising from the acquisitions are as follows: Receivables 15.7 2.3 18.0 Inventories 16.7 11.1 27.8 Property, plant and equipment 3.2 4.0 7.2 Intangibles 45.1 - 45.1 Deferred tax (liability)/asset (9.1) 0.3 (8.8) Provisions and creditors (21.5) (5.1) (26.6) Interest bearing loans and borrowings - (5.3) (5.3) Fair value of net identifiable assets on acquisition date 50.1 7.3 57.4 Attributable to non controlling interest (12.5) (1.7) (14.2) 37.6 5.6 43.2 The fair value of the above identifiable assets and liabilities approximated their carrying values at the dates of acquisition. (c) Automotive Brands Group (ABG) Metcash acquired 75.1% of the equity of Automotive Brands Holdings Pty Ltd on 1 July 2012. The acquisition positions Metcash firmly in the automotive parts aftermarket sector. ABG is the third largest in the sector and manages the Autobarn franchise and Autopro dealership groups. In accordance with the acquisition agreement, Metcash has under certain circumstances the right to acquire the remaining 24.9% equity interest in ABG. The minority shareholder also has the right under certain circumstances to require Metcash to acquire its shareholding in ABG. The purchase consideration is to be based on a EBITDA multiple calculation. (d) Other business combinations During the current period Mitre 10 acquired various businesses in order to increase and maintain its footprint as one of the leading hardware and home improvement businesses. The total purchase consideration for these businesses was $36.0 million which resulted in goodwill of $28.2 million being recognised. The business combinations were not individually significant, and are disclosed above in aggregate. The accounting for the above business combinations is provisional as at 31 October 2012. (e) Prior period acquisition – Franklins acquisition On 30 September 2011 Metcash acquired 100% of the equity in the Franklins Group from Pick n Pay Retailers Pty Ltd. The fair value of the net assets acquired recognised in the 30 April 2012 financial statements were based on a preliminary accounting assessment. The final acquisition accounting is as follows: $m (i) Purchase consideration: Cash paid during the current and prior periods 188.4 Cash consideration accrued at the end of the period 1.2 Total purchase consideration 189.6 Less: cash acquired - Net purchase consideration 189.6 Add: fair value of net identifiable liabilities assumed (ii) 66.5 Goodwill 256.1

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11. BUSINESS COMBINATIONS (Continued) $m (ii) Assets acquired and liabilities assumed: The assets and liabilities arising from the acquisition are as follows: Receivables 7.9 Inventories 29.3 Other current assets 1.3 Disposal group assets 104.7 Property, plant and equipment - Intangibles 23.5 Deferred tax asset 74.5 Provisions and creditors (98.9) Provision for rental subsidy (178.5) Interest bearing loans and borrowings (30.3) Fair value of net identifiable liabilities assumed (66.5) The preliminary accounting assessment has been adjusted for a decrease of $4.7 million in disposal group assets, an increase of $34.1 million in the provision for rental subsidy and an increase of $22.8 million in deferred tax assets. Inclusive of other minor changes, this has resulted in a corresponding increase in goodwill of $16.2 million. 12. SUBSEQUENT EVENTS

There are no events that have occurred after the half-year end that would materially affect the reported results or would require disclosure in this half-year financial report.

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METCASH FINANCIAL REPORT 2012

DIRECTORS’ DECLARATION For the half-year ended 31 October 2012

Page 16

In accordance with a resolution of the directors of Metcash Limited, I state that: In the opinion of the directors: (a) the financial statements and notes of the consolidated entity:

(i) give a true and fair view of the financial position as at 31 October 2012 and the performance for the

half-year ended on that date; and (ii) comply with Accounting Standard AASB 134 "Interim Financial Reporting" and the Corporations

Regulations 2001; and (b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they

become due and payable. On behalf of the Board

Andrew Reitzer Director Sydney, 30 November 2012

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Liability limited by a scheme approved under Professional Standards Legislation

To the members of Metcash Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Metcash Limited, which comprises the consolidated statement of financial position as at 31 October 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time during the half-year.

Directors' Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal controls as the directors determine are necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 October 2012 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Metcash Limited and the entities it controlled during the half-year, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review we have complied with the independence requirements of the Corporations Act 2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a copy of which is included by reference in the directors’ report.

Page 17

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2

Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Metcash Limited is not in accordance with the Corporations Act 2001, including:

a) giving a true and fair view of the consolidated entity's financial position as at 31 October 2012 and of its performance for the half-year ended on that date; and

b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

Ernst & Young Michael J Wright Partner Sydney 30 November 2012

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Liability limited by a scheme approved under Professional Standards Legislation

Auditor's Independence Declaration to the Directors of Metcash Limited In relation to our review of the financial report of Metcash Limited for the half-year ended 31 October 2012, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

Ernst & Young Michael J Wright Partner 30 November 2012

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