1

UCHUMI SUPERMARKETS LIMITEDIncorporated in Kenya under the Companies Act (Cap. 486, Laws of Kenya)

(Registration Number C.6/92)

Lead Transaction Advisor

Faida Investment Bank Ltd

Sponsoring Stock Brokers

Faida Investment Bank Ltd (Kenya), Faida Securities Rwanda (Rwanda), UAP Financial Services Ltd

(Uganda), Rasilimali Ltd (Tanzania)

Legal Advisor

Hamilton Harrison & Mathews

Reporting Accountant

Ernst & Young

Receiving Bank

Equity Bank Limited

Share Registrars

Funguo Registrars Limited

PR and Advertising Consultant

Hill & Knowlton Strategies

The date of this Information Memorandum is 7 November 2014

ABRIDGED INFORMATION MEMORANDUM

The Rights Issue of 99,534,980 New Ordinary Shares Fully Paid At An Offer Price of KShs 9.00 In The Ratio Of 3 New Ordinary

Shares For Every 8 Ordinary Shares Held

2

TRANSACTION ADVISORSLEAD TRANSACTION ADVISOR

SPONSORING STOCK BROKERS

LEAD LEGAL ADVISOR REPORTING ACCOUNTANT

RECEIVING BANK REGISTRARS

PR & COMMUNICATION AND ADVERTISING CONSULTANT

3

TABLE OF CONTENTS

1 TRANSACTION ADVISERS....................................................................................................................................3

2 IMPORTANT NOTICE.............................................................................................................................................4

3 CHAIRPERSON’S STATEMENT ............................................................................................................................7

4 DIRECTORS’ STATEMENT....................................................................................................................................9

5 EXECUTIVE SUMMARY.........................................................................................................................................9

6 KEY FEATURES OF THE RIGHTS ISSUE ..........................................................................................................17

7 DETAILS OF THE RIGHTS ISSUE .......................................................................................................................20

1 TRANSACTION ADVISERS

Lead Transaction Advisor & Sponsoring Broker Lead Legal Advisers

Faida Investment Bank Ltd

P.O Box 45236-00100 Nairobi, Kenya

Tel: +254 20 7606026

Email: david.mataen@fib.co.ke

David Mataen

Hamilton Harrison & Mathews

P.O Box 30333-00100 Nairobi, Kenya

Tel: +254 20 3258000

Email: romwela@hhm.co.ke

Richard Omwela

Reporting Accountant Receiving Bank

Ernst & Young Ltd

P.O Box 44286-00100 Nairobi, Kenya

Tel: +254 20 2715300

Email: joseph.k.cheboror@ke.ey.com

Joseph Cheboror

Equity Bank Ltd

P.O Box 75104-00200 Nairobi, Kenya

Tel: +254 20 2262477/0711026477

Email: George.mwangi@equitybank.co.ke

George Mwangi

PR & Advertising Consultant Registrar

Hill & Knowlton Strategies Ltd

P.O Box 34537-00100 Nairobi, Kenya

Tel: +254 20 4440829

Email: Samuel.karanja@hkstrategies.co.ke

Samuel Karanja

Funguo Registrars Ltd

P.O Box 45519-00100 Nairobi, Kenya

Tel: +254 20 2771227

Email: ochoi@icdc.co.ke

Richard Ochoi

4

2 IMPORTANT NOTICE

The Directors, having made all reasonable inquiries, confirm that this Information Memorandum contains all information with respect to the Company and the Shares and which is material in the context of the Shares. The Directors further confirm that the information contained in this Information Memorandum is true and accurate in all material respects and is not misleading and that the opinions and intentions expressed in this Information Memorandum are honestly held by them and that there are no other facts, the omission of which, would make any of such information or the expression of any such opinions or intentions misleading. The Directors accept responsibility accordingly.

The professional advisors and other agents engaged by the Company to deal with the Rights Issue have relied on information provided by the Company.

Neither this Information Memorandum nor any other information supplied in connection with the Rights Issue is intended to provide the complete basis of any credit or other evaluation. This Information Memorandum should not be considered as a recommendation by the professional advisors to the Rights Issue that any recipient of this Information Memorandum or any other information supplied in connection with this Rights Issue should exercise or purchase the Rights. Each investor contemplating to exercise or purchase the Rights once they become available to the public should make his or her own independent investigation of the financial condition and affairs, and his or her own appraisal of the creditworthiness, of the Company.

The delivery of this Information Memorandum does not at any time imply that the information contained herein concerning the Company is correct at any time subsequent to the date hereof or that any other information supplied in connection with the Rights Issue is correct at any time subsequent to the date indicated in the document containing the same.

No person has been authorised to give any information or make any representation other than those contained in this Information Memorandum and if given or made, such information or representation should not be relied upon as having been authorised by or on behalf of the Company, the professional advisors, or the other agents (if any) to the Rights Issue.

Without limitation, this Information Memorandum cannot be sent or passed or otherwise be distributed outside East Africa and it is not intended to, constitute an offer for the Rights in any place outside East Africa. In that regard, this Information Memorandum may not be used for or in connection with any offer to, or solicitation by, anyone in any jurisdiction or in any circumstances where such offer or solicitation is unauthorised or is unlawful. The distribution of this Information Memorandum outside of East Africa may be restricted by law and persons who come into possession of this Information Memorandum should seek advice on and observe those restrictions. Any failure to comply with those restrictions may constitute a violation of applicable securities laws. Any such recipient must not treat this Information Memorandum as constituting an offer to him, unless in the relevant jurisdiction, such invitation or offer could be made lawfully to him without contravention of any unfulfilled registration or legal requirements.

Investors outside East Africa wishing to exercise or purchase the Rights must satisfy themselves as to the full observance of the laws of the relevant territory and governmental and other consents to ensure that all requisite formalities are adhered to, and pay any issue, transfer or other taxes due in such territory. Before exercising or purchasing the Rights, investors outside East Africa are advised to consult their own professional advisers as to whether they require any governmental or other approvals or need to observe any applicable legal or regulatory requirements.

Permissions and ApprovalsA copy of this Information Memorandum together with the documents required to be attached hereto, have been delivered to the Capital Markets Authority of Kenya (CMA-Kenya), Capital Markets Authority of Uganda (CMA-Uganda), Capital Markets & Securities Authority of Tanzania (CMSA-Tanzania) and the

5

Capital Market Authority of Rwanda (CMA-Rwanda) for approval and to the Registrar of Companies in Kenya for registration.

Permission has been granted by the Capital Markets Authority Kenya (CMA) to offer the New ordinary shares to the public, through a Rights Issue at the Nairobi Securities Exchange (NSE), The Rights Issuehas not been approved nor disapproved by the CMA-Kenya, CMA-Uganda, CMSA-Tanzania or CMA-Rwanda. As a matter of policy, none of them assume responsibility for the correctness of any of the statements made or opinions or reports expressed or contained in this Information Memorandum.

Approval of this Information Memorandum by the CMA-Kenya, is not to be taken as an indication of the merits of Uchumi or of the Rights Issue.

Permission has been given by the NSE, to admit the New ordinary shares to the Official List of the NSE, comprising in aggregate 99,534,980 issued ordinary shares fully paid of Kshs. 5/- each. It is expected that Rights Issue will become effective and that dealings in the Shares on the NSE will commence on 29 December 2014.

The NSE assumes no responsibility for the correctness of any of the statements made or opinions or reports expressed or contained or referred to in this Information Memorandum. Admission of the Shares to the Official List is not to be taken as an indication of the merits of Uchumi or of the Rights Issue.

Risk FactorsEach prospective investor should carefully consider the matters set forth under the caption Risk Factors in Section 14 of this Information Memorandum. Please consult your investment advisor, fund or asset manager, bank manager, stockbroker, lawyer, accountant or other professional advisor on the meaning and impact of the contents of this Information Memorandum, and as to what action to take.

Forward Looking StatementsThis Information Memorandum contains forward-looking statements relating to the Company’s business. These forward looking statements can be identified by the use of forward-looking terminology such as believes, expects, may, is expected to, will, will continue, should, would be, seeks or anticipates or similar expressions or the negative thereof or other variations thereof or comparable terminology, or by discussion of strategy, plans or intentions.

These statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements that may be expressed or implied by such forward-looking statements.

Some of these factors are discussed in more detail under Risk Factors in Section 14 of this Information Memorandum. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Information Memorandum as anticipated, believed, estimated or expected.

The Company does not intend, and does not assume any obligation, to update any industry information or forward looking statements set out in this Information Memorandum.

Financial InformationFinancial information presented in this Information Memorandum is derived from the audited consolidated financial statements of the Company and its subsidiaries for the years ended 30 June 2010, 2011, 2012, 2013 and 2014 respectively.

6

ConsentsFaida Investment Bank Limited as the Lead Transaction Advisor and the Lead Sponsoring Stockbroker;Faida Securities Rwanda as the Sponsoring Stockbroker in Rwanda, UAP Financial Services as the Sponsoring Stockbroker in Uganda, Rasilimali Limited as the Sponsoring Stockbroker in Tanzania, Hamilton Harrison & Mathews as Legal Advisors; Ernst & Young Certified Public Accountants as Reporting Accountants; Equity Bank Limited as the Receiving Bank; Hill & Knowlton Strategies as PR and Advertising Consultants and Funguo Registrars as Registrar of the Company have consented in writing to act in the stated capacities and to their names being included in this Information Memorandum and have not withdrawn their consents prior to the publication of this Information Memorandum.

None of the above advisors have been employed on a contingent basis by Uchumi and none of themowns an amount of shares in Uchumi or its subsidiaries which is material to that person or has a material, direct or indirect economic interest in Uchumi.

Legal OpinionHamilton Harrison & Mathews have given and have not withdrawn their consent to the inclusion in this Information Memorandum of their Legal Opinion, and the references to their names, in the form and context in which they appear, and they have authorized the contents of the said Legal Opinion.

Reporting Accountant’s OpinionThis Information Memorandum contains statements from Ernst & Young, the Reporting Accountants, which constitute a statement made by an expert in terms of the relevant regulation in the respective jurisdiction. The Reporting Accountants have given and have not before delivery of this Information Memorandum withdrawn their consent to the issue of the said statements in the form and context in which they are included in the Information Memorandum.

7

3 CHAIRPERSON’S STATEMENT

Dear Investor,

On behalf of the Directors of Uchumi Supermarkets Limited, I have great pleasure in presenting to you this Information Memorandum for the Rights Issue of new ordinary shares in Uchumi Supermarkets at the Nairobi Securities Exchange, Uganda Securities Exchange, Dar es Salaam Stock Exchange and the Rwanda Stock Exchange.

BackgroundThis Rights Issue follows approval by the annual general meeting of the Company held on 11 December 2012 that the company seeks new capital from its existing shareholders to finance branch network expansion in Kenya and within the East African region as well as refurbishment and modernization of some existing branches in Kenya. This Rights Issue follows successful cross listing in the Rwanda Stock Exchange, the Uganda Securities Exchange and the Dar es Salaam Stock Exchange which were completed in the second part of 2013 and 2014.

Purpose of the Rights IssueThe purpose of the Rights Issue is to enable Uchumi meet working capital requirements necessitated by the planned opening of new branches in the region as follows: opening another 4 branches in Kenya, 1 in Uganda and 3 in Tanzania all by 2014/15. And, also to refurbish and modernize 5 existing branches in Kenya.

Rights OfferThe company now offers, by way of rights up to 99,534,980 new ordinary shares at KShs 09.00 eachpayable in full upon acceptance not later than 3.00 pm on the 5 December 2014. The procedure for acceptance, payment or renunciation of the Rights is contained in this Information Memorandum and the Provisional Allotment Letter.

The Rights Issue will be on the basis of Three (3) new ordinary shares fully paid for every Eight (8) Existing Shares held by each shareholder on the register at 3.00 pm on 22 October 2014. The offer is subject to, and in accordance with, the terms and conditions contained in this Information Memorandum, the Provisional Allotment Letter and the Company’s Memorandum and Articles of Association.

The new ordinary shares fully paid will, when fully paid, rank pari passu in all respects with the Existing Shares. All rights attached to the Existing Shares with regard to voting, dividends, liquidation proceeds and the pre-emption in future capital increases are set out in the company’s Articles of Association and otherwise in accordance with the provisions of the Company’s Act.

Latest DevelopmentsUchumi is currently on the GROWTH phase having successfully completed its recovery. Since 2006, we have opened a total of twelve new branches, namely: Thika Road Jipange, Embu, Nakuru, Kericho, Kisii,Taj Mall and Ongata Rongai in Kenya, Quality Mall in Tanzania and Gulu, Kabalagala, Natete and Freedom City in Uganda.

In addition, we have embarked on refurbishment of old (existing) stores in a re-merchandising exercise and ambience improvement. We are also replacing old equipment (e.g. in the bakeries) to enhance efficiency in operations.

All the above-mentioned developments were financed through internally generated funds due to the healthy cash position realized with progressive top-line and bottom-line growth since 2006.

8

In the 2011/12 financial year, we invested up to Kshs 513 million in new branches, existing stores refurbishment and old equipment replacement. Kshs 50 million was used for refurbishments/replacements while Kshs 463 million on opening new branches. The total fixed assets of the Company grew by Kshs 213 million during the 2011/12 financial year.

Uchumi shares are now trading at stock markets in the region through Cross Listing, starting with Rwanda Stock Exchange which was completed on the 14 October 2013, and subsequently at the Uganda Securities Exchange which was completed a month later on the 13 November 2013 and Dar es Salaam Stock Exchange on 15 August 2014.

Future OutlookIn the 2014/15 and 2015/16 financial years, we plan to open a minimum of sixteen (16) branches across East Africa in a bid to competitively position our business. We also intend to undertake detailed refurbishment of existing stores over the same period. This expansion and refurbishment will require substantial capital expenditure.

This Information Memorandum is designed to provide detailed information and disclosures on Uchumi and its subsidiaries. I invite you to read this Information Memorandum in its entirety and take appropriate action as you have the opportunity to participate in the growth of our Company through the regional exchanges where we are listed.

RecommendationPlease read in full the Information Memorandum and Provisional Allotment Letter and take action within the timetable as detailed therein.

It is important that you as a shareholder exercise your Rights to increase your investment in the Company. With the discount offered, you are being offered a good opportunity with resultant capital value should you wish to offload the shares in future. Should you not wish to take up your Rights, you can bequeath them to a close relative through private arrangement or sell them through the respective exchange. Do not, therefore, let your Rights lapse.

New investors from across the Region are also welcome and should be able to purchase Rights to the New ordinary shares fully paid that may be renounced through the NSE.

ConclusionThe Board of Directors considers the Rights Issue to be in the best interest of the Company and looks to the future with optimism that the Company will defend its rightful place as a market leader in the retail industry and achieve its vision as “Your Home of Value!”

Yours faithfully

Ms. Khadija MireCHAIRPERSON

9

4 DIRECTORS’ STATEMENT

The Directors accept responsibility for the information contained in this Information Memorandum. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this Information Memorandum is in accordance with facts and does not omit anything that is likely to affect the import of such information.

The Directors confirm that in their opinion the working capital available to the Company and its subsidiaries is sufficient for its present requirements. The Company is not in breach of any of its loan covenants.

Signed by:

Ms. Khadija Mire Dr. Jonathan CianoChairperson Chief Executive Officer

5 EXECUTIVE SUMMARY

5.1 Company Overview

Uchumi Supermarkets Limited is a public limited liability company incorporated in Kenya under the Companies Act and with registration number C.6/92.

The Government of Kenya is the largest shareholder with a 13.4% stake. The rest of the shares in the Company are owned by local and foreign retail and institutional investors.

Uchumi has four fully-owned subsidiaries namely Uchumi Supermarkets (Uganda) Limited; USL Tanzania Limited; Kasarani Mall Limited; and Uchumi Holdings Limited

The principal activity of Uchumi Supermarkets (Uganda) Limited and USL Tanzania Limited is the operation of retail supermarkets. The principal activity of Kasarani Mall Limited is property management. Uchumi Holdings Limited is dormant.

In addition to the abovementioned subsidiaries, Uchumi has registered a branch in Uganda, South Sudanand Tanzania.

5.2 Rights of Shareholders

The Shareholders exercise their rights by participating and voting at the general meetings of the Company. At these meetings the decisions that require the approval of Shareholders include: creation of

10

new ordinary shares fully paid, increase in share capital, variation of shareholder rights, alteration of the Memorandum and Articles of Association, election of directors, appointment of auditors, fixing the remuneration of directors and the auditor, adoption of financial statements and declaration of dividends. These rights are enshrined in the Memorandum and Articles of Association.

5.3 Legal Opinion

Hamilton Harrison & Mathews has given and have not withdrawn their consent to the inclusion in this Information Memorandum of their Legal Opinion, and the references to their names, in the form and context in which they appear, and have authorized the contents of the said Legal Opinion.

5.4 Directors’ Information

As disclosed in sub-section 11.5 of this Information Memorandum, the Board of Directors of the Company is comprised of six members, drawn from different areas of Kenya and having diverse skills and experience.

5.5 Share Capital of Uchumi

The authorised share capital of the Company is Kshs. 3,000,000,000 divided into 500,000,000 ordinary shares of Kshs. 5 each and 25,000,000 redeemable preference shares of Kshs. 20 each.

The issued share capital of the Company is Kshs. 1,327,133,070 divided into 265,426,614 ordinary shares of Kshs. 5 each.

Uchumi has an unissued share capital of Kshs. 1,672,866,930 divided into 234,573,386 ordinary shares of Kshs. 5 each and 25,000,000 redeemable preference shares of Kshs. 20 each.

5.6 Debt of Uchumi

By a loan agreement dated 1 November 2006 and made between the Government of Kenya (GoK) and Uchumi, the Government acting in public interest and as an indirect shareholder agreed to advance Kshs. 675,000,000 in accordance with the Framework Agreement dated 7 July 2006. This loan has now been paid back fully as of 30 June 2014.The Framework Agreement was made between Eastern and Southern African Trade and Development Bank (PTA), Kenya Commercial Bank (KCB), the government of Kenyaand Uchumi. This Framework Agreement related to the business recovery plan of Uchumi and provided for, among other things, the provision of a loan by GoK, the restructuring of the bank loans and the establishment of an advisory committee to work with a special receiver manager.

By a subsequent loan restructuring agreement that commenced on 30 June 2010 and made between GoKand Uchumi, the loan agreement dated 1 November 2006 was restructured and partially repaid with Kshs. 407,000,000 being retained as a term loan for a period of 5 years with interest calculated on the outstanding principal amount at the rate of 9.5% per annum.

Kenya Commercial Bank gave a facility of Kshs. 800,000,000 to Uchumi. This facility involves an overdraft facility of Kshs. 200,000,000/- and short term loan facility of Kshs. 600,000,000/-. This facility is secured by a charge dated 23 May 2014 over property land reference number 209/399/3. The charge is duly executed, stamped and registered at both the lands and companies registries. KShs 150 million was paid in August 2014, and the balance now stands at KShs 650 million.

Uchumi has also borrowed Kshs. 300,000,000 from ICDC for short term financing. The interest rate for this facility is ICDC’s base rate. This facility is secured by a charge issued by Uchumi to ICDC over Land Reference No. 209/12593 dated 9 September, 2013. The charge is duly executed, stamped and registered at both the lands and companies registries. KShs 109 million has since been paid and the balance stood at KShs 191 million as at 30 September 2014.

11

5.7 Risk Factors

Uchumi conducts retail business operations in Kenya, Uganda and Tanzania. It therefore faces both macro and micro-economic risks such as social-political, weather, exchange rate fluctuations, pricing risks amongst others.

5.8 Transaction Overview

Transaction Rights Issue of 99,534,980 New Ordinary Shares at a ratio of 3 for every 8 heldIssuer Uchumi Supermarkets LimitedStatus Upon listing, freely transferable ordinary shares ranking pari passu with each otherTrades Only of Rights immobilised prior to tradingCompliance The Capital Markets Legislation.Rights Issue Date 10 November 2014Governing Law The Laws of Kenya

5.9 Group Corporate Structure

The Group Structure is as follows:

* In addition to the abovementioned subsidiaries, Uchumi has registered a branch in Uganda, South

Sudan and in Tanzania.

All subsidiaries are owned 100% by Uchumi.

5.10 Description of the Company’s Business and Products

Uchumi deals in retail trade and provides consumers with a wide range of goods and services through a network of supermarket stores in Kenya, Uganda and Tanzania.

The products are broadly categorized into five divisions including:-

i. Foods (food stuff for human consumption);ii. Non-Food groceries (non-food fast moving consumer goods);

12

iii. General merchandise (non-food general products);iv. Textiles (clothing and fabric-made products); and v. Services (specialty products & services offered by the Company and/or partners).

The divisions are broken down into a number of categories which are made up of similar or related products as perceived by customers and these are managed as strategic business units through the category management principle.

5.11 Company Profile

Registered OfficeThe Company has its registered office at KNTC Complex, Yarrow Road, off Nanyuki Road, P.O. Box 73167-00200 Nairobi, Kenya.

Company SecretaryThe company secretary is Mr. John Wambugu, of KNTC Complex, Yarrow Road, off Nanyuki Road, P.O Box 73167-00100 Nairobi, Kenya.

AuditorThe auditors of the Company are Ernst & Young, of Kenya Re Towers at Upper Hill, P.O. Box 44286–00100 Nairobi, Kenya.

Shares RegistrarThe shares registrar of the Company is Funguo Registrars Limited of Uchumi House, Moi Avenue, P.O. Box 1133-00200 Nairobi, Kenya.

Legal AdvisorsThe legal advisors of the Company are Hamilton Harrison & Mathews, of ICEA Building Kenyatta Avenue, P.O. Box 30333 - 00100 Nairobi, Kenya.

BankersThe bankers to the company are shown in the table below:Country Bank Branch Postal Address Kenya Kenya Commercial Bank Limited Moi Avenue P.O. Box 48400-00100 Nairobi

Barclays Bank of Kenya Limited Westlands P.O. Box 30120-00100 NairobiEquity Bank Limited Community P.O. Box 75104-00200 NairobiCommercial Bank of Africa Limited Mama Ngina St. P.O. Box 30437-00100 NairobiCooperative Bank of Kenya Enterprise Rd P.O. Box 17928-00500 Nairobi

Tanzania KCB – Tanzania Oyster P.O. Box 804 Dar es SalaamEquity Bank – Tanzania Quality Centre P.O. Box 110183 Dar es Salaam

Uganda Barclays Bank Uganda Limited Jinja Road P.O. Box 7101 KampalaStanbic Bank Uganda Limited Garden City P.O. Box 7131 Kampala

Source: USL

Principal ActivitiesThe principal activity of the Company is that of operating retail supermarkets.

5.12 Board of Directors

The Board consists of the following members, drawn from different areas of Kenya and having diverse skills and experience:

13

Name Position

Ms. Khadija Mire Chairperson; Non-executive and Independent

Dr. Ibrahim Mohamed(with Mrs Joyce A.Ogundo as alternate to the PS)

Director; Non-executive. Representing the Ministry of East Africa Affairs, Commerce & Tourism

Ms. Mbatha Mbithi Director; Non-executive. Representing the ICDC

Mr. James R. Murigu Director; Non-executive and Independent

Mr. Bartholomew Ragalo Director; Non-executive and Independent

Dr. Jonathan Ciano Managing Director/ Chief Executive Officer; Executive

Source: USL

5.13 Senior Management Team

Uchumi’s senior management team consists of the following:

Name Position

Dr. Jonathan Ciano Managing Director/Chief Executive Officer

John Wambugu Company Secretary/ Legal Officer

Chadwick Okumu Finance Manager

Owino Ayodo General Manager Operations

John Peter Kariuki Security Services Manager

Michael Kibbe Human Resource Manager

David Mboya Internal Auditor

Sam Murigi IT Manager

Ben Sila Head of BuyingSource: USL

5.14 Employee Numbers

The aggregate number of permanent and contract staff in Uchumi has grown as follows in the last five years:

2010 2011 2012 2013 20142,028 2,549 3,125 3,349 4,503

Source: USL

5.15 Uchumi’s Corporate Milestones

Strategic growth across the East African region – Branch Network – From 25 supermarkets in the year 2012 it has grown to a total of 37 shops currently, with another 5 supermarkets to be opened shortly.

Strategic growth in its Operations - Uchumi accepts payment in all its forms - plastic, paper and virtual money. It has upgraded its system to include online local purchase order processing and payments to promote efficiency in ordering and stock management levels.

Improving the living standards of more than 4,500 people across East Africa - Uchumi is the proud employer of more than 4,500 Kenyan, Ugandan and Tanzanian nationals.

Increased shareholder value – Uchumi’s shares rose to a high of Kshs 21.50/- over the past 12 months. The Company’s revenue grew to Kshs. 14.5 billion by close of financial year 2013/2014.

14

Customer loyalty – U-Card & Gift Card - Uchumi shops see an average of 70,000 customers walking through its doors every day. Currently the loyalty programme has over half a million active members and continues to grow every day.

Efficient supplier channel to distribute goods and services - Uchumi handles more than 4,000 suppliers from multi-national firms and large local manufacturers to small and medium-sized enterprises (SME’s). The Company’s pride remains being devoted to SME’s.

5.16 Key Success Factors

Uchumi’s success factors are attributable to three overall points;

Branda) Uchumi enjoys strong loyalty in East Africa. b) Uchumi has a policy of engaging local suppliers and entrepreneurs as the main part of its supply

chain.c) Uchumi marshals all its stakeholders in its operation with an endeavour to maintain brand

positioning/equity.

Corporate Governancea) Uchumi is the only listed supermarket in the East Africa regionb) Uchumi operates with principles of integrity and transparency as part of its core valuesc) Uchumi pays taxes in an open and timely manner.d) Uchumi prioritises giving back to the community in and around its areas of operations.

Operational Policy

a) Uchumi has improved inventory management; shrinkage is below 1.0% compared to global average of 4.0%.

b) Uchumi undertakes research useful for making decisions for outlet strategic locations, competitive rental rates, purchasing equipment and product profit margins mixes.

c) Uchumi takes customer service and dialogue seriously.d) The Company’s investment in an ERP system has led to business process improvements, customer

service, and streamlined inventory management.e) Value in pricing driven by customer need and trust and overall shareholder valuef) Specialty business model that promotes small and medium entrepreneurs, giving them a fair chance

through their participation in the formal retail business value chain.

5.17 Drivers of Change in the Company

There are a number of factors driving change in the Company: Demographic Dynamics

Increasing population, increasing purchasing power and infrastructural development has resulted in an increased demand for formal retail shopping outlets.

Competitive PricingUchumi prides itself in offering value for money, thus enhancing customer trust – home of value.

Shopping Experience and Convenience Uchumi endeavours to competitively position its outlets in line with the demographic movement, creating convenience for its customers.

Varied Range of MerchandiseUchumi offers its customers a varied range of merchandise.

15

Robust Training ProgramThe Company has put a robust human resource training program to enhance service delivery.

Technology and InnovationInvestment in the ERP and its continued enhancement contributes to efficiency and innovation in management of customer service, inventory management and suppliers interface.

5.18 Uchumi’s Competitive Positioning

Product Categories Depending on LocationUchumi’s long history in formal retail gives it an edge in appreciating the local retail market. Consequently, the Company makes available different products and services in different geographical locations to meet the varied needs of customers.

Uniform PricingThe Company prides itself in offering value for money through a practice of uniform national pricing.

Focus on Locally Produced ProductsThe Company’s supplies are locally sourced thereby promoting local entrepreneurs and service providers, which was the founding objective of the Uchumi Supermarket chain.

Improving Shareholder ValueThe growth and sustainability of the Company is managed with the objective of increasing shareholder value.

5.19 Summary of Shareholding Structure

The Company had a total of 17,835 shareholders in the register as at 31 August 2014. The composition of the shareholding at that date was as follows:-

Classification Shares % Holding

Local Companies 79,724,735 30.0%

Local Individuals 102,839,515 38.7%

Foreign Companies 79,182,357 29.8%

Foreign Individuals 3,680,007 1.4%

Total 265,426,614 100.0%Source: USL

5.20 Summary of Group 5 Years Financial Performance

The Group’s profit and loss account for each of the last five years to 30 June 2014 is summarized below:

Group Financial Summary30-Jun-10 30-Jun-11 30-Jun-12 30-Jun-13 30-Jun-14Kshs '000 Kshs '000 Kshs '000 Kshs '000 Kshs '000

Gross sales 9,559,682 10,770,961 13,802,191 14,270,598 14,364,844Net sales 9,608,926 10,840,728 13,918,530 14,368,643 14,457,687

Cost of sales (7,912,857) (8,943,513) (11,407,227) (11,600,148) 11,643,604 Profit from operating activities 536,750 518,463 428,425 501,964 517,389Finance costs (103,558) (3,630) (25,082) (16,062) (64,640)Profit before tax 433,192 514,833 403,343 485,902 452,749Income tax credit/(expense) 431,907 (124,408) (129,366) (128,892) (68,461)Profit for the year 865,099 390,425 273,977 357,010 384,288

Source: USL annual reports

16

Group Balance Sheet SummaryThe Group’s audited Balance Sheet for each of the five years to 30 June 2014 is shown in the table below:

Kshs '000 30-Jun-10 30-Jun-11 30-Jun-12 30-June-13 30-Jun-14

Non-current assets

1,959,944

2,607,070

3,347,742 3,848,218 4,634,417

Current assets

1,193,567

1,397,650

1,594,146 1,725,315 2,250,436

Total assets

3,153,511

4,004,720

4,941,888 5,573,533 6,884,853

Non-current liabilities

320,140

183,368

80,309 200,000 177,370

Current liabilities

1,294,438

1,542,187

2,203,769 2,448,121 3,350,169

Total liabilities

1,614,578

1,725,555

2,284,078 2,649,347 3,527,539

Shareholders' funds

1,538,933

2,279,165

2,657,810 2,925,412 3,357,314Source: USL annual reports

17

6 KEY FEATURES OF THE RIGHTS ISSUE

This Section contains a synopsis of the Rights Issue. You should read this Information Memorandum in full before deciding to participate in the Rights Issue.

6.1 Rights Issue Statistics

Subscription Price KShs 9.00Total number of new ordinary shares fully paid being issued 99,534,980Gross amount to be raised KShs 895,814,820Ratio of entitlement 3 for every 8

6.2 Reasons for the Rights Issue

The purpose of the Rights Issue is to raise funds to meet working capital requirements necessitated by the planned opening of new branches in the region as well to refurbish and modernize some of the existing stores. Uchumi’s growth plans anticipate: a) The opening of up to 5 new branches in Kenya by the end of 2014/15 financial yearb) The opening of up to 3 new branches in Tanzania by the end of 2014/15 financial yearc) The opening up of 1 new branch in Uganda by the end of 2014/5 financial yeard) The opening up of 2 new branches in Rwanda by end of 2014/15 financial yeare) The refurbishment and modernization of 5 existing branches in Kenya by end of 2014/15 financial year.

6.3 Timetable of Principal Events

Event Date and Time1 Record Date (Register Closure Date) 3.00 pm 22 Oct 20142 Upload of rights into CDSC system and distribution of

Information Memorandum and PALs to Uchumi shareholders07 Nov 2014

3 Issue Opens and commencement in trading of rights at the NSE 9.00 am 10 Nov 20144 Last date of renunciation (by way of private transfer)/ Last date

for splitting3.00 pm 21 Nov 2014

5 Last date for trading in Rights 3.00 pm 28 Nov 20146 Last date and time for acceptance and payment for new

ordinary shares3.00 pm 05 Dec 2014

7 Announcement of Rights Issue results 17 Dec 20148 Last date and time for payment for Additional Shares for

applications using irrevocable bank guarantee19 Dec 2014

9 Electronic crediting of CDS accounts for new ordinary sharesand processing of refunds (applicable if applications are received in excess of the number of untaken Rights) from

24 Dec 2014

10 Date of listing and commencement of trading of new ordinary shares at the NSE

29 Dec 2014

6.4 Minimum Success

The Rights Issue is subject to a minimum subscription level of fifty percent (50%) of the New Shares that is Kshs [447,907,410] or [49,767,490] New Shares. The Directors reserve the right not to proceed with the final allotment of the New Shares unless this minimum threshold is achieved. Also, should there be an under-subscription on the offer, but one above the minimum subscription threshold, the Directors will seek to utilize the funds raised in a manner that will still achieve the objectives set out in the Information Memorandum.

6.5 Major Shareholder Undertaking and UnderwritingThe Government of Kenya has undertaken in writing to take up in full all the shares it will qualify for under this Rights Issue. The Rights Issue is not underwritten.

18

6.6 Basis of Subscription Price

The Subscription Price has been determined from the trading history at the NSE of Uchumi and the following factors:

a) Recent performance of the index and turnover at the NSE;b) Recent announcements of financial results of Uchumi and the proposed Rights Issue;c) Past performance of Rights Issues at the NSE;d) Current political environment;e) Current macro-economic environment;f) Retail sector environment;g) Uchumi`s unique competitive strengths;h) Uchumi`s strategic plan

The Subscription Price of Kshs 09.00/- represents a discount of 12.6% of the closing price of Uchumi at the NSE on Friday 17 October 2014 of Kshs 10.30, as well as a discount of 27.3% to the six months average market price of KShs 12.38

6.7 Uchumi Share Price Vs NSE 20 Share Index

6.7.1 The following chart illustrates the performance of Uchumi share price against the NSE 20 Share Index.

Monthly Performance

Share Price

NSE 20 Index

Quarterly Performance

Share Price

NSE 20 Index

30-Apr-12 14.25 3546.66 30-Sep-11 8.55 3284.0631-May-12 17.40 3650.85 30-Dec-11 7.70 3205.0229-Jun-12 15.90 3703.94 30-Mar-12 12.20 3366.8931-Jul-12 15.35 3832.42 29-Jun-12 15.90 3703.9431-Aug-12 15.25 3865.76 28-Sep-12 17.85 3972.0328-Sep-12 17.85 3972.03 31-Dec-12 19.10 4133.0231-Oct-12 19.65 4147.28 29-Mar-13 22.00 4860.8330-Nov-12 19.50 4083.52 28-Jun-13 19.90 4598.1631-Dec-12 19.10 4133.02 30-Sep-13 19.90 4793.231-Jan-13 19.15 4416.60 31-Dec-13 19.45 4926.9728-Feb-13 19.30 4518.59 31-Mar-14 14.55 4945.7829-Mar-13 22.00 4860.83 30-Jun-14 12.30 4885.0430-Apr-13 19.75 4765.23 30-Sep-14 10.40 5255.6231-May-13 20.50 5006.9628-Jun-13 19.90 4598.1631-Jul-13 19.60 4787.5630-Aug-13 19.15 4697.7530-Sep-13 19.90 4793.2031-Oct-13 21.25 4992.8829-Nov-13 20.25 5100.8831-Dec-13 19.45 4926.9731-Jan-14 17.95 4856.1528-Feb-14 18.10 4933.4131-Mar-14 14.55 4945.7830-Apr-14 14.20 4948.9730-May-14 12.80 4881.5630-Jun-14 12.30 4885.0431-July-14 12.10 4906.0929-Aug-14 12.45 5139.3930-Sep-14 10.40 5255.62

Sources: NSE, Bloomberg

19

6.7.2 Graph of Uchumi share price vs. NSE 20 Share Index

Uchumi’s shares were suspended from trading on the NSE on 2 June 2006. The Company’s suspension from the NSE was subsequently lifted and trading of the Company’s shares resumed on 31 May 2011.

The following chart illustrates the performance of Uchumi’s share price against the NSE 20 share index since Re-listing up to 30 September 2014.

Source: Bloomberg

6.8 Pertinent Financial Data

1 Total number of authorized shares of Uchumi 500,000,0002 Total number of issued and fully paid before rights issue 265,426,6143 Per value of each share KShs 5/=4 Fully paid up share capital of Uchumi before the rights issue Kshs 1,327,133,0705 Net profits for the year ended 30 June 2014 KShs 384,288,0007 EPS for the year ended 30 June 2014 KShs 1.459 DPS for year ended 30 June 2014 KShs 0.3010 Net Asset Value for the year ended 30 June 2014 KShs (1,099,733,000)11 Implied historic P/E based on the offer price and EPS for year ended 30

June 20146.2x

12 Market capitalization based on the closing price of KShs 10.30 at the NSE on 17 October 2014

KShs 2,733,894,124

13 Total number of issued and fully paid up shares after the rights issue assuming full subscription

364,961,594

14 Fully paid up share capital of Uchumi after rights issue assuming full subscription

KShs 1,824,807,970

15 Post rights issue EPS (adjusted 2014) assuming full subscription KShs 1.05

6.9 Acceptance and application procedures

Eligible Shareholders may take up all, some or none of their Rights. Eligible Shareholders wishing to take up all of their Rights are required to observe the procedures set out in paragraph 7 (Acceptance Procedure) of Section 8 (Details of the Rights Issue).

Eligible Shareholders wishing to renounce some or all of their Rights are invited to follow the steps set out in paragraph 9 (Renunciation of Rights) of Section 8 (Details of the Rights Issue). Please note that Eligible Shareholders may renounce their Rights by way of private transfer or selling the same in accordance with the said paragraph.

Eligible Shareholders wishing to apply for Additional Shares must do so in the manner set out in paragraph 8 (Additional Shares) of Section 8 (Details of the Rights Issue).

20

7 DETAILS OF THE RIGHTS ISSUE

1. Offer1.1. Uchumi hereby offers to Eligible Shareholders, by way of renounceable Rights, a total of

99,534,980 New ordinary shares at the Subscription Price of Kshs 9.00/- per New Share payable in full on acceptance in the terms set out below. The New ordinary shares will be duly listed.

1.2. Persons who are not Eligible Shareholders as of the Record Date will not be entitled to participate in the Offer.

1.3. The Rights Issue is on the basis of a ratio of Three (3) New Shares for every Eight (8) Existing Shares, being the Entitlement Ratio. The Entitlement Ratio, once declared, will not be altered.

1.4. The number of New ordinary shares that an Eligible Shareholder is entitled to (i.e. your Entitlement or your number of Rights) is shown on the PAL.

1.5. Rights are renounceable and may be sold or transferred to third parties subject to the provisions of this Information Memorandum. Information on how Rights may be sold or transferred is set out in paragraph 9 below.

1.6. Eligible Shareholders may also, at their option, choose not to take any action at all and untaken Rights will be allocated by the Directors in accordance with the Allocation Policy.

2. Reasons for the Rights IssueThe purpose of the Rights Issue is to raise funds to meet working capital requirements necessitated by the planned opening of new branches in the region as well to refurbish and modernize some of the existing stores. Uchumi’s growth plans anticipate:

a) The opening of up to 5 new branches in Kenya by the end of 2014/15 financial yearb) The opening of up to 3 new branches in Tanzania by the end of 2014/15 financial yearc) The opening up of 1 new branch in Uganda by the end of 2014/5 financial yeard) The opening up of 2 new branches in Rwanda by end of 2014/15 financial yeare) The refurbishment and modernization of 5 existing branches in Kenya by end of 2014/15 financial

year.

3. Status of the New ordinary shares The New ordinary shares will rank pari passu in all respects with the Existing Shares including the right to receive in full all dividends and other distributions declared, made or paid in respect of Uchumi shares, in the subsequent periods.

4. Opening and Closing Date of the Rights IssueThe Rights Issue will open at 9.00 am on 10 November 2014 and close at 3.00 pm on 28 November 2014.

5. Entitlement5.1 Your Entitlement is shown on the accompanying PAL.

5.2 The number of New ordinary shares offered to Eligible Shareholders has been calculated pro rata on the basis of the Entitlement Ratio and no restrictions are placed on the number of Existing Shares to be held before your Entitlement accrues. However, mathematically, this might result in fractional entitlements to New ordinary shares and in such an event; fractions will be rounded downwards to the nearest whole number. Kindly therefore note that where this occurs, the Eligible Shareholder will be allotted the number of New ordinary shares after rounding down.

5.3 Fractions of New ordinary shares that result from applying the Entitlement Ratio will form part of the Untaken Rights.

5.4 Eligible Shareholders with CDS Accounts will have such accounts credited with the applicable Entitlement. In this regard, the Registrar will notify the Eligible Shareholders of their credited Entitlement through the PAL.

5.5 Eligible Shareholders without CDS Accounts will be notified of their Rights by the Registrar through the PAL.

21

5.6 Investors who wish to become shareholders in Uchumi via this Rights Issue can purchase Rights being sold on the NSE by Eligible Shareholders. Such investors will be issued with a Form E (see below) from their Authorized Agent which requires to be duly completed, accepted and fully paid for as per the Acceptance Procedure below. These investors can apply for Additional Shares provided they take up their Entitlement in full.

5.7 Eligible Shareholders and other investors are required to note that if they wish to take any action other than (a) full acceptance of their Entitlement or (b) to allow their Entitlement to lapse in full are asked to note that the following further documents are available for collection and due completion from Authorized Agents:

Form R Form of renunciation for Private Transfers to be used by Eligible Shareholders renouncing or transferring their rights by way of private transfer and by renouncing to take up their new ordinary shares

CDS Form 7 To be used in connection with a private transfer by eligible shareholders with CDS Accounts

Form Z To be completed by Eligible Shareholders wishing to appoint third party as their lawful attorney or agent to act on their behalf in connection with the Rights Issue

Form E Form of entitlement for purchased Rights to be used in the case of Rights purchased on the NSE by any person and issued in favor of such a person

CDS Form 5 To be used by investors utilizing loan facilities to subscribe for new ordinary shares

6. Effect of not having a CDS AccountIt is now mandatory for all investors in the NSE to have CDS Accounts because of the implementation of dematerialisation. Without a CDS Account, Eligible Shareholders will not be able to trade his or her Rights on the NSE. Eligible Shareholders who do not already have CDS Accounts are requested to submit duly completed and signed CDS Account opening forms, together with their PAL to the Authorized Agents to enable crediting of Entitlements to the newly opened accounts. Renouncees in whose favour Rights may have been renounced would be subject to the same constraints. However, it is not mandatory for investors to have a CDS account in the other markets where Uchumi shares are currently trading as they have not dematerialised their listed securities.

7. Acceptance ProcedureAcceptance of the Offer, once given is irrevocable. Full details of the procedure for acceptance and payment are set out below:

7.1 Acceptance may only be communicated by submitting a duly completed Entitlement and Acceptance Form together with Application Money for the number of New ordinary shares applied for, which form cannot be withdrawn and constitutes a binding application for the number of New ordinary shares (including any Additional Shares) specified in the Entitlement and Acceptance Form on the terms set out in this Information Memorandum. The Entitlement and Acceptance Form must be signed so as to be binding.

7.2 If the Entitlement and Acceptance Form is not completed correctly, Uchumi may in its absolute discretion reject it or treat it as valid, and Uchumi’s decision as to whether to accept or reject, or how to construe, amend or complete an Entitlement and Acceptance Form shall be final.

7.3 The Entitlement and Acceptance Form, once duly completed and signed, must be returned to the Receiving Bank either directly or through any Authorized Agent, together with the Application Money for the number of New ordinary shares. Payment of the Application Money by all Eligible Shareholders must be made by way of banker’s or stockbroker’s cheque or Electronic Funds Transfer (“RTGS”) and must be received by the Receiving Bank or the relevant Authorized Agent not later than 3.00 pm on 5 December 2014

7.4 New ordinary shares in respect of which duly completed and signed Entitlement and Acceptance Forms together with the Application Money, paid in accordance with paragraph 7.3 above, which are not received by the Receiving Bank or an Authorized Agent by the dates and times stipulated

22

in paragraph 7.3 above will be deemed not to have been duly subscribed for and any rights in connection with the same will have lapsed.

7.5 Eligible Shareholders who wish to take up their full Entitlement are required to duly complete the section entitled “Full Acceptance of New ordinary shares” as well as other relevant sections of the PAL. Eligible Shareholders wishing to accept only part of their entitlement are required to duly complete the section of the PAL entitled “Partial Acceptance of New ordinary shares” as well as other relevant sections of the PAL. Please note that partial acceptance will not be permitted for less than One hundred (100) New ordinary shares.

8. Application for Additional Shares and Allocation Policy8.1 Eligible Shareholders (except in the case of those that wish to effect payment in the manner set

out in 8.2 below) who have taken up all their Entitlement may apply for Additional Shares by completing the section for Application for Additional Shares on their Entitlement and Acceptance Form and signing and returning the duly completed and signed Entitlement and Acceptance Form together with the Application Money. These should be received by the Receiving Bank or the relevant Authorized Agent not later than 3.00 pm on 5 December 2014.

8.2 Any eligible Shareholder applying for any Additional Shares may, in lieu of payment by chequeprovide an irrevocable bank guarantee in the form stipulated in Appendix II to this Information Memorandum, for the full amount of the Additional Shares. Upon notification by the Registrar, such Eligible Shareholder will be required to effect payment for Additional Shares to the Receiving Bank by 3.00 pm on 19 December 2014.Such payment may be made by RTGS to such bank account of Uchumi designated in the said notification.

8.3 Additional Shares applied for by Eligible Shareholders will be allocated by Uchumi in accordance with the Allocation Policy to the extent only of any Untaken Rights. The allocation of Additional Shares (if any) will be published on or about 17 December 2014. Please note that payment in respect of any Additional Shares applied for and not allocated will be refunded in accordance with paragraph 12 and will be free of interest. There will be no changes once the basis of allocation has been announced.

8.4 The press announcement publishing the result of the Rights Issue will include the basis of allocation of any Additional Shares and will be published on or about 17 December 2014.

8.5 Subject to paragraph 8.6 of this Section, the Untaken Rights will be allocated on a pro rata basis to Eligible Shareholders who have applied for Additional Shares in accordance with this paragraph 8 (Application for Additional Shares and Allocation Policy).

8.6 If any person applies for Additional Shares which might trigger the regulatory restrictions and obligations set out in paragraph 18 (Regulatory Restrictions) of this Section, the Directors reserve the right, at their sole discretion, not to allocate any Additional Shares to any such person unless all required regulatory approvals are duly obtained and attached with the PAL before 3.00 pm on 5 December 2014.

8.7 Eligible Shareholders wishing to take up Additional Shares are required to duly complete the section entitled “Application for Additional Shares” as well as other relevant sections of the PAL.

9. Renunciation of RightsThe Rights are renounceable. Accordingly, Eligible Shareholders may elect to (a) give up their Rights in full or in part or (b) to transfer their rights in full or in part or (c) sell their Rights in full or in part, all in accordance with the procedures set out below.

9.1 Renunciation by way of Trading in Rights9.1.1 The Rights constitute a security in the form of an option and are tradable on the NSE for a

value but only by Eligible Shareholders with CDS Accounts. The Rights shall be listed on the NSE under the MIMS.

9.1.2 Eligible Shareholders will be notified of their Rights through the PAL.

23

9.1.3 In addition, Eligible Shareholders with CDS Accounts will have such accounts credited with their Rights.

9.1.4 Only Eligible Shareholders with CDS Accounts will be permitted to trade in Rights. In suchan event, Eligible Shareholders who wish to renounce some or all of their Rights in this way may instruct any Authorized Agent to dispose of any or all of such Rights and must duly complete the section entitled “Immobilization for trading in the Rights” as well as other relevant sections of the PAL.

9.1.5 Eligible Shareholders without CDS Accounts who wish to trade in Rights in this way must first open CDS Accounts and immobilize such Rights prior to trading and must duly complete the section entitled “Immobilization for trading in the Rights” as well as other relevant sections of the PAL. The CDS Account opening forms may be obtained from any Authorized Agent.

9.1.6 Rights may be traded on the NSE from 10 November 2014 to 28 November 2014.9.1.7 Please note that trading of Rights on the NSE will attract a brokerage commission plus

other statutory costs payable by the seller and buyer of such Rights.9.1.8 The CMA-Kenya, and the NSE have approved the trading of Rights.

9.2 Renunciation by way of Private Transfer9.2.1 Eligible Shareholders wishing to transfer their Rights to a particular Renouncee may do so

by way of private transfer, subject to (a) Section 31 of the Capital Markets Act (b) Regulations 57 to 61 of the Capital Markets (Licensing Requirements) General) (Amendment) Regulations 2002 and (c) Rule 31 of the Central Depository Rules, 2004. Regulation 57 allows a transfer, inter alia, of Rights by an Eligible Shareholder to a close relation in the form of a gift. In such a case, any Authorized Agent, being a stockbroker, is required to assess, endorse and submit to the NSE a written application for such a transfer with the required information and supporting documents stating the reason for the proposed private transfer. A close relation means a relationship supported by documentary evidence of a spouse, parent, sibling, child, father-in-law, son-in-law,daughter-in-law, mother-in-law, brother-in-law, son-in-law, grandchild or spouse of a grandchild.

9.2.2 In order to effect a private transfer, an Eligible Shareholder must duly complete a CDS Form 7 (in the case of Eligible Shareholders with CDS Accounts) as well as Form R. Both these forms are available from Authorized Agents. By executing the relevant form, an Eligible Shareholder is deemed to renounce subject to approval from the NSE and the CMA-Kenya, as applicable and, subject to paragraph 9.2.1, transfer the relevant Rights.

9.2.3 Eligible Shareholders who have CDS Accounts may only transfer Rights in favour of a Renouncee with a CDS Account.

9.2.4 The last date and time for renunciation by way of private transfer is 3.00 pm on 21 November 2014.

9.2.5 Eligible Shareholders are advised to contact any Authorized Agent for the purposes of effecting the renunciation by way of private transfer.

9.2.6 If an Eligible Shareholder accepts some of his Rights and renounces the remainder by way of private transfer in the manner specified in this paragraph 9.2 (Renunciation by way of Private Transfer), such Eligible Shareholder shall be required to submit the Entitlement and Acceptance Form to the Receiving Bank or the relevant Authorized Agent not later than 3.00 pm on 21 November 2014 both duly completed and signed and accompanied with the Application Money in connection with the Accepted Rights.

9.3 Renunciation by decliningEligible Shareholders who wish to decline their Rights need not do anything. Any Rights not taken up by such Eligible Shareholders will form part of the Untaken Rights.

10. Restriction on Renunciation of Rights10.1 Paragraph 18 (Regulatory Restrictions) of this Section sets out certain regulatory restrictions

and obligations that may be relevant to any Eligible Shareholder or Renouncee.

10.2 Please note that any renunciation by way of trading of Rights through the NSE or by way of private transfer of Rights in accordance with paragraph 9.1 (Renunciation by way of Trading in

24

Rights) and paragraph 9.2 (Renunciation by way of Private Transfer) of this Section is only permitted if such renunciation does not trigger the said regulatory restrictions and obligations.

11. Application Money11.1 Payment for the New ordinary shares shall be made in the form of:

a) A banker’s or stockbroker’s cheque or via RTGS for values less than Kenya Shillings one million (KShs 1,000,000), (or equivalent in local currency). Such cheques must be in the currency of the respective country where the shares are listed and drawn on a licensed commercial bank that is a member of the Central Bank Clearing House in that country, and should be made payable to “Uchumi Supermarkets Limited Rights Issue-PAL No { Insert No } ” and be crossed “A/C Payee Only”. Each banker’s cheque received by the Receiving Bank will be deposited immediately for collection. Please note that no interest will be payable by Uchumi on money received.

b) RTGS for values exceeding Kenya Shillings one Million (KShs 1,000,000), (or equivalent in local currency) to a specific bank account as provided by Uchumi.

c) An Authorised Selling Agent on behalf of Eligible Shareholders (Global Payment System or GPS).

11.2 Any Banker’s cheque received by the Receiving Bank via the Registrar will be deposited immediately for collection. Any Eligible Shareholders applying for any Shares may provide an Irrevocable Bank Guarantee (IBG) in the form stipulated in Appendix 20.5: in the Information Memorandum, for the full amount of the Shares, provided that such application is for a value of KES 1,000,000 and above (or equivalent in local currency). The IBG must be authenticated by the guaranteeing bank via a SWIFT message sent to the Receiving Bank before 3:00p.m. 19 December 2014. The Eligible Shareholder must attach the IBG to the Entitlement and Acceptance Form at the time of submission by 3.00p.m. on 19 December 2014.

11.3 Payments made in accordance with paragraph 11.1 above will, upon receipt by Uchumi of the relevant amount in cleared funds, constitute acceptance of the Rights Issue upon the terms and conditions set out in this Information Memorandum and in the Entitlement and Acceptance Form.

11.4 Eligible Shareholders with CDS Accounts in Kenya are required to pay the Subscription Price per New Share in accordance with the Entitlement and Acceptance Form plus Kshs 30/= in accordance with the Central Depositories (Regulation of Central Depositories)(Amendment) Rules, 2008. This CDSC fee should NOT be included in the Application Money

12. Rejections Policy

Uchumi shall be entitled to reject applications which are made inter alia under the following circumstances:

12.1 The applicant is an Ineligible Investor.

12.2 The PAL does not comply with the Information Memorandum and Section 18 – Regulatory and other Restrictions.

12.3 The Authorized Selling Agents will present all Bankers’ Cheques for payment to the Registrar who will present the Authorized Cheques to the Receiving Bank on behalf of the Company. Delivery of the PAL, Form E accompanied with payment by way of an Authorised Cheque will constitute a warranty that the Authorised Cheque will be honoured on first presentation. If any Authorised Cheque accompanying the PAL, Form E is not paid on first presentation and the PAL, Form E has already been accepted in whole or part, such acceptance may at the option of the Company be rescinded and the New ordinary shares comprised therein may be transferred to another person upon such terms and conditions as the Company deems fit. The entire proceeds of such transfer shall be retained for the account of the Company, as the case may be, and the original Applicant shall be responsible for any losses and all costs incurred.

12.4 The Company shall not be under any liability whatsoever should any PAL, Form E fail to be received by the Registrars or by the Receiving Bank or by any Authorised Selling Agent by the Closing Date. In this regard, such PAL, Form E and accompanying Bankers’ Cheques shall be returned to the Authorised Selling Agent or Receiving Bank where the PAL, Form E

25

was submitted, for collection by the applicable Applicants.

12.5 The PAL, Form E can be rejected if full value has not been received. It is not sufficient to merely present an Authorised Cheque for the full amount payable.

12.6 Applications will also be rejected for the following reasons:12.6.1 Missing or illegible name of primary or joint Applicant in any Application Form;

12.6.2 Missing or illegible or non verification (where required) of status of Applicant;12.6.3 Missing or illegible identification number, including corporation registration number, or in

the case of Kenyan residents, missing or illegible alien registration number;12.6.4 Missing or illegible address (either postal or physical street address);12.6.5 Missing residence and citizenship indicators (for primary Applicant in the case of an

individual) or missing residency for tax purposes for corporate investors;12.6.6 Missing or incomplete CDS 5 Form in the case of financed applications where the Offer

Shares are to be taken as collateral;12.6.7 Insufficient documentation is forwarded;12.6.8 In the case of nominee applications, incomplete information or lack of declaration from the

agent submitting the Application;-Missing or inappropriately signed Application Form including without limitation:

-Primary signature missing from Signature Box 1;

-Joint signature missing from Signature Box 2 (if applicable); and

-Two directors or a director and company secretary not having signed in the case of a corporate application;

12.6.9 Number of New ordinary shares does not comply with the rules as set out in Information Memorandum;

12.6.10 Payment accompanying the PAL, Form E for the offer Shares applied for is less than the required amount;

12.6.11 Authorized Cheque has unauthenticated alterations; and12.6.12 Authorized Cheque is not signed or dated or if the amount in figures and words do not

tally;12.6.13 Sums paid for Offer Shares in respect of any rejected Applications shall be returned in

accordance with the Refunds Policy.

13. Refunds policy

In the event that either, an application is rejected or the Allocation Policy results in entitlements which result in applicant monies being refunded, then Application Monies will be refunded by Bankers’ Cheque (or by Electronic Funds Transfer (EFT) only for shareholders who have existing EFT mandates in the register) and will apply as follows:

13.1 Refunds will only apply where funds for the PAL, Form E are not pledged through guarantees or letters of undertaking on behalf of the Applicant.

13.2 No interest will be paid on any Application Monies to any Eligible Shareholder or other person taking up the Rights. Interest, if any, earned on Application Monies is payable to the CMA Investor Compensation Fund in accordance with CMA regulations.

13.3 Refunds in respect of unsuccessful applications (if any) shall be in the form of refund cheques or by way of RTGS by Uchumi (where an Eligible Shareholder has provided accurate RTGS details including the name of the relevant bank, bank code, branch, branch code and account number.The preferred method of refund is RTGS where a bank account is available as refunds will reach the recipient quicker and more efficiently and effectively if the information provided is correct. Uchumi will begin refunds to Eligible Shareholders from 24 December 2014.

13.4 Eligible Shareholders are required to choose their preferred option of refund: (a) by RTGS (b) ordinary post at the risk of the Eligible Shareholder, or (c) collected by the Eligible Shareholder from the relevant Authorized Agent (as designated by the Eligible Shareholder on the PAL for that purpose) against proof of identity. Neither Uchumi nor any Authorized Agent will be responsible for any refund not received.

13.5 In the case of Applicants whose New ordinary shares are pledged, refund money/monies in the name of the Applicant will be delivered to the financier indicated on the Application Form

26

13.6 Refunds to East African investors will be effected in local currency through EFT to the Applicant’s bank account provided in the Share Register or by an Authorised Cheque (net of transaction charges). The receiving bank will apply conversion rates locked down for the period of the offer assuming that the local currency in the other respective countries will continue to perform within reasonably stable exchange rates bands (within and up to 10.0%) on either side. These rates shall also apply to refunds, effectively avoiding any exchange rate differences/shortfalls for regional investors.

13.7 A refund will be deemed to have been made by Uchumi by virtue of a Bankers’ Cheque having been issued or an EFT instruction having been made. In this regard, Uchumi has appointed the Receiving Bank to make refunds (if any) on its behalf after final allocation has been determined and approved.

14. New ordinary shares14.1 Eligible Shareholders and their Renouncees with CDS Accounts who comply with the

procedures for acceptance as set out in this Information Memorandum, will receive their New ordinary shares in electronic form by way of credit to their respective CDS Accounts. It is the responsibility of Eligible Shareholders and Renouncees to ensure that their CDS Account details set out in the Entitlement and Acceptance Form are correct.

14.2 Eligible Shareholders without a CDS Account who comply with the procedures for acceptance as set out in this Information Memorandum, will have to complete the process of immobilization of their already dematerialized shares through their investment advisors and stock brokers before they can receive their news shares in electronic form. Participating in this rights issue and subsequent trading of the New ordinary shares may only take place if the Eligible Shareholder has a CDS Account.

14.3 New ordinary shares will be admitted on the MIMS on 29 December 2014, with dealings of New ordinary shares commencing on the same date.

1 15. Untaken Rights and Allocation Policy

15.1 All Eligible Shareholders who apply for their New ordinary shares in full shall receive the full number of New ordinary shares indicated in their PAL. New ordinary shares not taken up shall form the Untaken Rights. The Untaken Rights may be allocated as Additional Shares in accordance with the Allocation Policy to Eligible Shareholders who duly submit applications for Additional Shares in accordance with paragraph 8 (Additional Shares) of this Section.

15.2 Any Rights not taken up as part of the Untaken Rights may be allotted by the Board in such manner as it determines and if not so allotted, will lapse.

16. Loan Facilities16.1 Eligible Shareholders and/or Renouncees or any purchaser of the Rights may approach a

licensed financial institution or bank (“a Lender”) at their risk, for loan facilities to facilitate participation and payment of the full amount due in respect of the Rights Issue.

16.2 Please note that the extension of loan facilities by any Lender is a decision to be made by such Lender at its sole and absolute discretion.

16.3 In the case of Eligible Shareholders or Renouncees with CDS Accounts financed by a Lender to take the New ordinary shares as security:

16.3.1 The Lender shall write to the CDSC Limited making it clear that it requires the New ordinary shares to be pledged as security until such time as CDSC Limited is instructed in writing to the contrary by such Lender, through an Authorized Agent, to lift such pledge;

16.3.2 Upon completion of CDS Form 5 (available from an Authorized Agent) prescribed by CDSC Limited all pledges will be effected through entries in the Central Depository System maintained by CDSC Limited. The pledging of such shares will at all times be subject to Rule 63 of the Central Depositories (Regulation of Central Depositories), Rules,2004. For every financed application to the CDSC, the Lender or the purchaser of Rights are required to pay CDSC Kshs 1,000/-.

27

17. Foreign Investors17.1 The Capital Markets (Foreign Investors) Regulations, 2002 (as amended) (“the Foreign Investor

Regulations”) provide that “a foreign investor” (“Foreign Investor”) is any person who is not a local investor. A “local investor” is defined to mean (a) an individual being a natural person who is a citizen of an East African Community Partner State or (b) a body corporate being a company incorporated under the Companies Act of Kenya or such other similar statute of an East African Community Partner State in which the citizen or the Government of an East African Community Partner State have beneficial interest in 100% of its ordinary shares or any other body corporate established or incorporated in an East African Community Partner State under the provisions of any written law. An East African Community Partner State means States that are members of the East African Community.

17.2 Foreign Investors wishing to apply for New ordinary shares must satisfy themselves as to the full observance of the laws of the relevant territory and governmental and other consents to ensure that all requisite formalities are adhered to, and pay any issue, transfer or other taxes due in such territory. Before applying for and purchasing New ordinary shares, foreign investors are advised to consult their own professional advisers as to whether they require any governmental or other approvals or need to observe any applicable legal or regulatory requirements.

17.3 The Foreign Investor Regulations require not less than 25% (as amended by Legal Notice No. 29 of 2008) of the ordinary shares in listed companies which have been listed to be reserved for local investors.

17.4 This Information Memorandum and accompanying PAL do not, and are not intended to, constitute an offer for the New ordinary shares in any place outside East Africa. In that regard, this Information Memorandum and accompanying PAL may not be used for or in connection with any offer to, or solicitation by, anyone in any jurisdiction or in any circumstances where such offer or solicitation is not authorized or is unlawful. The distribution of this Information Memorandum and the accompanying PAL outside of East Africa may be restricted by law and persons who come into possession of this Information Memorandum and the accompanying PAL should seek advice on and observe those restrictions. Any failure to comply with those restrictions may constitute a violation of applicable securities laws. Any such recipient must not treat this Information Memorandum and accompanying PAL as constituting an offer to him, unless in the relevant jurisdiction, such invitation or offer could be made lawfully to him without contravention of any unfulfilled registration or legal requirements. Without limitation, neither this Information Memorandum nor the accompanying PAL may be sent or passed or otherwise distributed outside East Africa.

17.5 In particular, the Rights Issue has not been, and will not be, registered under the United States Securities Act, 1933 or the securities laws of any state in the United States of America and is not being made in the United States of America or to persons resident in the United States of America. Without limitation, neither this Information Memorandum nor the accompanying PAL may be sent or otherwise distributed to investors in the United States of America.

17.6 Eligible Shareholders with a registered address in East Africa holding Existing Shares on behalf of persons who are resident in a jurisdiction outside East Africa are responsible for ensuring that taking up the New ordinary shares under the Rights Issue does not breach securities laws in that other jurisdiction. The return of a duly completed Entitlement and Acceptance Form in accordance with this Information Memorandum will not be deemed as a representation that there has been no breach of such laws.

18. Regulatory and other RestrictionsEligible Shareholders are requested to note that Uchumi is subject to the provisions of the Capital MarketsLegislation, its Articles of Association extracts of which are set out in Section 16.4 of this Information Memorandum. Notable, for purposes of the Rights Issue are the provisions summarised below. Eligible Shareholders are required to seek their own advice in connection with these matters. Kindly note that the Directors may take the said provisions into account when determining the allocation of any Untaken Rights

28

to applicants for Additional Shares. These provisions also affect an investor’s eligibility to purchase Rights on the Exchanges.

18.1 The Capital Markets (Take-Overs and Mergers) Regulations, 2002, oblige the observance of certain procedures if any person takes up Rights which would result in that person “acquiring effective control” of a listed company.

18.2 The Capital Markets (Foreign Investors) Regulations, 2002 require every listed company to reserve at least 25 per cent of its ordinary shares listed on the security exchange to Local Investors.

19. Tax Implications19.1 Eligible Shareholders interested in participating in the Rights Issue should consult their tax

advisors of any possible tax implications connected with the Rights Issue. Therefore, Uchumiand the Directors consider it inappropriate to provide detailed advice in respect of taxation consequences in connection with the Rights Issue save for what is expressly set out in this Information Memorandum.

19.2 Neither Uchumi nor any of the Directors or any of Uchumi’s officers or advisers accept any liability for any taxation implications of Eligible Shareholders in connection with the Rights Issue.

19.3 Local investors are subject to withholding tax on dividends at the rate of 5%. Foreign Investors will be subject to a withholding tax rate of 10%.

19. Expenses of the Rights IssueKenya Shillings

Transaction Advisor Fees 2,700,000Sponsoring Broker Fees 2,000,000Reporting Accountants Fees 4,365,000Registrars Fees 2,005,000Advertising & PR Consultants Fees 6,300,000Legal Advisors Fees 7,500,000NSE Application for Listing new ordinary shares 500,000CMA Kenya Approval Fees 2,363,955Advertising and media costs 34,565,525Printing and postage Costs 1,498,500Placement Commission 13,437,222Miscellaneous expenses 5,000,000Total 80,530,202

The expenses are indicative.

*Placing commission of 1.5% is payable to Members of the NSE (and is computed on the value of each successful application accepted in respect of the Entitlement and Acceptance forms completed and signed by Eligible Shareholders or Renouncees or respective investors, bearing the stamp of a single Authorised Agent).

20. Governing LawThe Rights Issue Documents and any contract resulting from the acceptance of an application to purchase the New ordinary shares shall be governed by and construed in accordance with the Laws of Kenya and it shall be a term of each such contract that the parties thereto and all other interested parties submit to the exclusive jurisdiction of the Courts of Kenya.

21. Reporting Accountant’s ReportErnst and Young, as the Reporting Accountants have prepared and produced a Reporting Accountant’s Report, the full contents of which are included in the Information Memorandum. The Accountant’s report has been submitted in accordance with section 19 of the Third Schedule of the Kenya Companies Act, 486, and the Fourth Schedule of the Capital Markets (Securities) (Public Offers, Listings and Disclosure) Regulations, 2002.

29

Ernst & Young have acted as auditors of the group for the five years to 30 June 2014. Unqualified reports were issued for each of the five years reviewed to 30 June 2014. Based on the review, Ernst & Young has confirmed that they are not aware of any material items not mentioned in the Information Memorandum regarding the Rights Issue, which could influence the evaluation by the investors of the assets, liabilities and financial position of the group and that the financial statements carried out in the Reporting Accountant’s Report have, in all material respects, been prepared in accordance with the International Financial Reporting Standard.

22. List of Authorised Selling AgentsJoint Lead Sponsoring Stockbroker

Faida Investment Bank LimitedCrawford Business Park,

Ground Floor, State House Road

P. O. Box 45236 - 00100, Nairobi.Tel: 7606026-37

info@faidastocks.comInvestment Banks

African Alliance Kenya Investment Bank LimitedTrans-national Plaza, 1st Floor,

Mama Ngina StreetP. O. Box 27639 - 00506 Nairobi

Tel: 2762000/2762557securities@africanalliance.co.ke

CBA Capital LimitedCommercial Bank of Africa LimitedMara and Ragati Roads, Upper HillP.O. Box 30437 – 00100 Nairobi.

Tel: 2884444contact@cbagroup.com

Equity Investment Bank LimitedEquity Center, Hospital Road, Upper Hill

P.O.Box 75104 – 00200 NairobiTel: 0711026511/0711026473

faith.mahinda@equitybank.co.ke

KCB CapitalKencom House, Moi Avenue

P.O. Box 48400 – 00100 NairobiTel: 3270000

omaiko@kcb.co.ke

Renaissance Capital (Kenya) LimitedPurshottam Place, 6th Floor,

Chiromo RoadP. O. Box 40560 - 00100 Nairobi.

Tel : 3682000/3754422infokenya@rencap.com

Standard Bank Group Securities LimitedCfC Centre, 2nd Floor,

Chiromo Road,P.O. Box 47198 - 00100 Nairobi.

Tel: 3638900,sbgs@stanbic.com

Standard Investment Bank LimitedICEA Building, 16th Floor,

Kenyatta AvenueP. O. Box 13714 - 00800, Nairobi.Tel: 2228963/2228967/2229033

info@sib.co.ke

Suntra Investment Bank LimitedNation Centre, 10th Floor,

Kimathi StreetP. O. Box 74016 - 00200, Nairobi.

Tel: 2870000info@suntra.co.ke

Dyer & Blair Investment Bank LimitedLoita House, 10th Floor,

Loita StreetP. O. Box 45396 - 00100, Nairobi.

Tel: 3240000/2227803shares@dyerandblair.com

StockbrokersApex Africa Capital Limited

Rehani House, 4th Floor, Koinange Street

P. O. Box 43676 - 00100, Nairobi. Tel: 2242170

invest@apexafrica.com

ABC Capital Limited IPS Building, 5th Floor,

Kimathi Street P. O. Box 34137 - 00100, Nairobi.

Tel: 2246036/2245971 headoffice@abccapital.co.ke

AIB Capital LimitedFinance House, 9th Floor,

Loita Street P. O. Box 11019 - 00100, Nairobi.

Tel: 2210178/2212989 info@aibcapital.com

Francis Drummond & Company Limited Hughes Building, 2nd Floor,

Kenyatta Avenue, P.O. Box 45465 - 00100, Nairobi.

Tel: 318690/318689 customerservice@drummond.co.ke

30

Genghis Capital Limited Prudential Building, 6th Floor,

Wabera Street P.O. Box 1670 - 00100, Nairobi.

Tel: 2774750 info@genghis-capital.com

Kestrel Capital (East Africa) LimitedICEA Building, 5th Floor,

Kenyatta AvenueP. O. Box 40005 - 00100, Nairobi.

Tel: 2251758/2251893info@kestrelcapital.com

Kingdom Securities Limited Co-operative House, 5th Floor,

Haile Selassie Avenue P. O. Box 48231- 00100, Nairobi.

Tel : 3276676info@kingdomsecurities.co.ke

NIC Securities Limited NIC House, Ground Floor,

Masaba Road P. O. Box 63046 - 00200, Nairobi.

Tel: 2888444 service@nic-securities.com

Old Mutual Securities Limited IPS Building, 6th Floor,

Kimathi Street P.O. Box 30059-00100, Nairobi.

Tel: 2241379 omsecurities@oldmutualkenya.com

Sterling Capital Limited Finance House, 11th Floor,

Loita Street P. O. Box 45080 - 00100, Nairobi.

Tel: 2213914 info@sterlingib.com