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THIS ELECTRONIC TRANSMISSION AND THE ATTACHED DOCUMENT MAY ONLY BE DISTRIBUTED IN “OFFSHORE TRANSACTIONS” AS DEFINED IN, AND IN RELIANCE ON, REGULATION S UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (“REGULATION S”) THE “U.S. SECURITIES ACT”) OR WITHIN THE UNITED STATES TO PERSONS REASONABLY BELIEVED TO BE QUALIFIED INSTITUTIONAL BUYERS (“QIBs”) AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT (“RULE 144A”) OR ANOTHER EXEMPTION FROM, OR TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER THE U.S. SECURITIES ACT. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS ELECTRONIC TRANSMISSION AND THE ATTACHED DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS NOTICE MAY RESULT IN A VIOLATION OF THE U.S. SECURITIES ACT AND/OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS. NOTHING IN THIS ELECTRONIC TRANSMISSION AND THE ATTACHED DOCUMENT CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN ANY JURISDICTION WHERE IT IS UNLAWFUL TO DO SO.

THE SECURITIES REFERRED TO HEREIN (THE “SECURITIES”) HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH RULE 144A TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVES IS A QIB OR (2) IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAW OF ANY STATE OF THE UNITED STATES.

This electronic transmission and the attached document are only addressed to and directed at persons in member states of the European Economic Area (“EEA”) who are qualified investors within the meaning of article 2(1)(e) of European Union Directive 2003/71/EC, as amended including by Directive 2010/73/EU (“Qualified Investors”). In addition, in the United Kingdom, this electronic transmission and the attached document are addressed to, and directed only at, Qualified Investors who (i) are persons who have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”), (ii) are persons who are high net worth entities falling within article 49(2)(a) to (d) of the Order, or (iii) are other persons to whom they may otherwise lawfully be communicated (all such persons together being referred to as “Relevant Persons”). This electronic transmission and the attached document must not be acted on or relied on (i) in the United Kingdom, by persons who are not Relevant Persons, and (ii) in any member state of the EEA other than the United Kingdom, by persons who are not Qualified Investors. Any investment or investment activity to which this electronic transmission and the attached document relate is available only to Relevant Persons in the United Kingdom and Qualified Investors in any member state of the EEA other than the United Kingdom, and will be engaged in only with such persons.

Confirmation of your representation: This electronic transmission and the attached document are delivered to you on the basis that you are deemed to have represented to B&M European Value Retail S.A. (the “Company”) and each of BofA Merrill Lynch, Goldman Sachs International, Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, London Branch, Jefferies International Limited and Numis Securities Limited (together, the “Underwriters”) and Lazard & Co., Limited (the “Financial Adviser”) that you have understood and agree to the terms set out herein, and (i) you are a person that is outside the United States for the purpose of Regulation S or a QIB inside the United States, and in the latter case, you are acquiring the Securities for your own account and/or for the account of another QIB, or (ii) you are a person in a member state of the EEA, other than the United Kingdom, and you are a Qualified Investor and/or a Qualified Investor acting on behalf of Qualified Investors or Relevant Persons, to the extent that you are acting on behalf of persons or entities in the EEA or the United Kingdom, or (iii) you are a person in the United Kingdom and you are a Relevant Person and/or a Relevant Person acting on behalf of Relevant Persons or Qualified Investors, to the extent that you are acting on behalf of persons or entities in the United Kingdom or in the EEA, or (iv) you are an institutional investor that is otherwise eligible to receive this electronic transmission and the attached document in accordance with the laws of the jurisdiction in which you are located.

You shall also be deemed to have represented to the Company and each of the Underwriters that you consent to delivery by electronic transmission.

You are reminded that you have received this electronic transmission and the attached document on the basis that you are a person into whose possession this electronic transmission and the attached document may be lawfully delivered in accordance with the laws of the jurisdiction in which you are located and you may not nor are you authorised to deliver this electronic transmission or the attached document, electronically or otherwise, to any other person. If a jurisdiction requires that the private offer to certain institutional and professional investors (the “Global Offer”) to which this electronic transmission and the attached document relates be made by a licensed broker or dealer and any Underwriter or any affiliate of an Underwriter is a licensed broker or dealer in that jurisdiction, the Global Offer shall be deemed to be made by such Underwriter or affiliate on the behalf of the Company in such jurisdiction.

You are reminded that documents transmitted electronically may be altered or changed during the process of transmission and consequently neither the Company nor the Underwriters nor any of their respective affiliates accepts any liability or responsibility whatsoever in respect of any difference between the attached document delivered by electronic transmission and the hard copy version. Your receipt of this document is at your own risk and you are responsible for protecting against viruses and other destructive items.

Restriction: Nothing in this electronic transmission constitutes, and may not be used in connection with, an offer of securities for sale to persons other than the certain institutional and professional investors described above and to whom it is directed and access has been limited so that it shall not constitute a general solicitation. If you have gained access to this transmission contrary to the foregoing restrictions, you will be unable to purchase any of the securities described therein.

None of the Underwriters nor the Financial Adviser nor any of their respective affiliates accepts any responsibility whatsoever for the contents of this electronic transmission or the attached document or for any statement made or purported to be made by them, or on their behalf, in connection with the Company or the Securities or the Global Offer referred to herein. The Underwriters, the Financial Adviser and each of their respective affiliates each accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of such electronic transmission, attached document or any such statement. No representation or warranty express or implied, is made by any of the Underwriters or any of their respective affiliates as to the accuracy, completeness or sufficiency of the information set out in this electronic transmission or the attached document.

The Underwriters and the Financial Adviser are acting exclusively for the Company and no one else in connection with the Global Offer. They will not regard any other person (whether or not a recipient of this electronic transmission or the attached document) as their client in relation to the Global Offer and will not be responsible to anyone other than the Company for providing the protections afforded to their clients nor for giving advice in relation to the Global Offer or any transaction, matter or arrangement referred to herein. This document constitutes a prospectus relating to B&M European Value Retail S.A. (the “Company”) for the purposes of article 5.3 of Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 on prospectuses to be published when securities are offered to the public or admitted to trading and amending Directive 2002/34/EC, as amended (the “Prospectus Directive”), and the Grand Duchy of Luxembourg (“Luxembourg”) Law of 10 July 2005 on prospectuses for securities, as amended (loi du 10 juillet 2005 relative aux prospectus pour valeurs mobilières, telle que modifiée) implementing the Prospectus Directive in Luxembourg (the “Luxembourg Prospectus Law”), and has been prepared in accordance with the Luxembourg Prospectus Law and Commission Regulation (EC) 809/2004 of 29 April 2004, as amended (the “PD Regulation”). The Commission de Surveillance du Secteur Financier (the “CSSF”), the Luxembourg financial sector supervisory authority in its capacity as the competent authority in Luxembourg under the Luxembourg Prospectus Law, has approved this document for the purposes of giving information in relation Admission to Trading (defined below). The CSSF assumes no responsibility as to the economic and financial soundness of the transaction and the quality or solvency of the Company in line with the provisions of article 7(7) of the Luxembourg Prospectus Law. The Company has requested that the CSSF provide the UK Financial Conduct Authority (the “FCA”), acting in its capacity as the competent authority under the Financial Services and Markets Act 2000, as amended (“FSMA”) (the “UKLA”) with a certificate of approval attesting that this document has been drawn up in accordance with the Luxembourg Prospectus Law and the PD Regulation. Application has been made to the UKLA and the London Stock Exchange plc (the “London Stock Exchange”), respectively, for admission of all of the ordinary shares in the capital of the Company issued and to be issued (the “Shares”): (i) to the premium listing segment of the Official List of the UKLA (the “Official List” and “Admission to Listing”, respectively); and (ii) to the main market for listed securities of the London Stock Exchange, which is a regulated market for the purposes of Directive 2004/39/EC, as amended (the “Markets in Financial Instruments Directive”) (“Admission to Trading” and, together with Admission to Listing, “Admission”). Conditional dealings in the Shares are expected to commence on the London Stock Exchange, at 8.00 a.m. (London time) on 12 June 2014. It is expected that Admission will become effective and that unconditional dealings in the Shares will commence on the London Stock Exchange at 8.00 a.m. (London time) on 17 June 2014. All dealings in the Shares before the commencement of unconditional dealings will be on a “when issued” basis and will be of no effect if Admission does not take place. Such dealings will be at the sole risk of the parties concerned. No application has been, or is currently intended to be, made for the Shares to be admitted to listing or traded on any other stock exchange. The Company accepts responsibility for the information contained in this document. To the best of the knowledge of the Company, having taken all reasonable care to ensure that such is the case, the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

Prospective investors should read this document in its entirety and, in particular, the section of this document headed “Risk Factors”, when considering an investment in the Company. Prospective investors should be aware that an investment in the Company involves a degree of risk and that, if certain of the risks described in this document occur, investors may find their investment materially adversely affected. Accordingly, an investment in the Shares is only suitable for investors who are particularly knowledgeable in investment matters and who are able to bear the loss of the whole or part of their investment. B&M EUROPEAN VALUE RETAIL S.A. (a Luxembourg public limited liability company (société anonyme) incorporated under the laws of Luxembourg, with its registered office at 16, Avenue Pasteur, L-2310, Luxembourg and registered with the Luxembourg Register of Commerce and Companies under number B 187275)

Global Offer of 400,000,000 Shares of 10 pence each at an Offer Price of 270 pence per Share and Admission to the premium listing segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange Joint Global Co-ordinators, Joint Bookrunners and Joint Sponsors BofA Merrill Lynch Goldman Sachs International Joint Bookrunners Credit Suisse Deutsche Bank Co-Lead Managers Jefferies Numis Securities Financial Adviser Lazard & Co., Limited

The Company is offering 27,777,778 new Shares under the Global Offer (the “New Shares”) and the Selling Shareholders (as defined in Part 11: Definitions) are offering an aggregate of 372,222,222 existing Shares (the “Existing Shares”) to certain institutional and other investors (being those who would be exempt from the prospectus requirements as set out under article 5(2) of the Luxembourg Prospectus Law) as described in Part 9: The Global Offer (the “Global Offer”). The Company will not receive any of the net proceeds of the sale of the Existing Shares, all of which will be received by the Selling Shareholders. The New Shares will, following Admission, rank pari passu in all respects with the other issued Shares and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the issued Shares after Admission. Share capital immediately following Admission Shares of 10 pence each Issued and fully paid Nominal Value Number 10 pence 1,000,000,000 Reliance on this document In making any investment decision, each investor must rely on their own examination, analysis and enquiry of the Group (as defined in Part 11: Definitions) and the terms of the Global Offer, including the merits and risks associated. Investors should rely only on the information contained in this document. No person has been authorised to give any information or make any representations other than those contained in this document and, if given or made, such information or representations must not be relied on as having been authorised by the Company, any of BofA Merrill Lynch and Goldman Sachs International (the “Joint Global Co-ordinators”), Credit Suisse Securities (Europe) Limited and Deutsche Bank AG, London Branch (together with the Joint Global Co-ordinators, the “Joint Bookrunners”), Jefferies International Limited and Numis Securities Limited (the “Co-Lead Managers”, and together with the Joint Bookrunners, the “Underwriters”), Lazard & Co., Limited (the “Financial Adviser”), the Directors or any of the Selling Shareholders.

Without prejudice to any legal or regulatory obligation on the Company to publish a supplement to this document pursuant to article 13 of the Luxembourg Prospectus Law, neither the delivery of this document nor any sale made pursuant to it shall, under any circumstances, create any implication that there has been no change in the affairs of the Group taken as a whole since the date of this document or that the information contained herein is correct as of any time after the date of this document. Any supplement to this document will be subject to approval by the CSSF and will be made public in accordance with the Prospectus Directive and the relevant rules under the Luxembourg Prospectus Law.

The contents of this document are not to be construed as legal, financial, tax or business advice. Each prospective investor should consult their own legal adviser, financial adviser, tax adviser or other for legal, financial, tax or business or other related advice.

This document is not intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by any of the Company, the Directors, the Selling Shareholders, any of the Underwriters or the Financial Adviser or any of their representatives that any recipient of this document should subscribe for or purchase the Shares. Prior to making any decision as to whether to subscribe for or purchase the Shares, prospective investors should read this document. Investors should ensure that they read the whole of this document and not just rely on key information or information summarised within it.

Investors who subscribe for or purchase Shares in the Global Offer will be deemed to have acknowledged that: (i) they have not relied on any of the Underwriters or the Financial Adviser or any person affiliated with any of them in connection with any investigation of the accuracy of any information contained in this document or their investment decision; and (ii) they have relied on the information contained in this document, and no person has been authorised to give any information or to make any representation concerning the Group or the Shares (other than as contained in this document) and, if given or made, any such other information or representation should not be relied upon as having been authorised by the Company, the Directors, the Selling Shareholders, any of the Underwriters or the Financial Adviser.

None of the Company, the Directors, the Selling Shareholders, any of the Underwriters or the Financial Adviser or any of their representatives is making any representation to any offeror, subscriber or purchaser of the Shares regarding the legality of an investment by such offeror, subscriber or purchaser. Each investor should consult with his or her own advisers as to the legal, tax, business, financial and related aspects subscribing for or purchasing Shares.

Over-allotment and stabilisation In connection with the Global Offer, BofA Merrill Lynch (the “Stabilising Manager”), or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot Shares or effect other stabilisation transactions with a view to supporting the market price of the Shares or any options, warrants or rights with respect to, or other interest in the Shares or other securities of the Company, in each case at a higher level than that which might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such transactions and such transactions may be effected on any securities market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of conditional dealings of the Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no obligation on the Stabilising Manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilisation, if commenced, may be discontinued at any time without prior notice. Except as

i required by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Global Offer.

In connection with the Global Offer, the Stabilising Manager may, for stabilisation purposes, over-allot Shares up to a maximum of 10% of the total number of Shares comprised in the Global Offer. For the purposes of allowing the Stabilising Manager to cover short positions resulting from any such over-allotments and/or from sales of Shares effected by it during the stabilising period, it is expected that Simon Arora, Bobby Arora and Robin Arora (either directly or indirectly) and CD&R European Value Retail Investment S.à r.l. (“CD&R Holdco”) (together, the “Over-allotment Shareholders”) will grant to it, on behalf of the Underwriters, an option (the “Over- allotment Option”) pursuant to which the Stabilising Manager may require the Over-allotment Shareholders to sell additional Existing Shares in an amount of up to a maximum of 10% of the total number of Shares comprised in the Global Offer (the “Over-allotment Shares”) at the Offer Price. The Over-allotment Option is exercisable in whole or in part, upon notice by the Stabilising Manager, at any time on or before the 30th calendar day after the commencement of conditional dealings of the Shares on the London Stock Exchange. Any Over-allotment Shares made available pursuant to the Over-allotment Option will rank pari passu in all respects with the Shares, including for all dividends and other distributions declared, made or paid on the Shares, will be sold on the same terms and conditions as the Shares being issued in the Global Offer and will form a single class for all purposes with the other Shares.

Advisers Each of BofA Merrill Lynch, Goldman Sachs International, Credit Suisse Securities (Europe) Limited, Jefferies International Limited and the Financial Adviser, which are authorised by the Prudential Regulation Authority (“PRA”) and regulated in the United Kingdom by the PRA and the FCA, Deutsche Bank AG, London Branch, which is regulated by Germany's Federal Financial Supervisory Authority, BaFin, and also authorised by the PRA, but may only be subject to limited regulation by the FCA and by the PRA and Numis Securities Limited, which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for the Company and no one else in connection with the Global Offer. None of the Underwriters nor the Financial Adviser will regard any other person (whether or not a recipient of this document) as a client in relation to the Global Offer and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for the giving of advice in relation to the Global Offer or any transaction, matter, or arrangement referred to in this document. Apart from the responsibilities and liabilities, if any, which may be imposed on the Underwriters or the Financial Adviser by FSMA or the regulatory regime established thereunder, none of the Underwriters nor the Financial Adviser nor any of their respective affiliates accepts any responsibility whatsoever for the contents of this document or its accuracy, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Shares or the Global Offer. The Underwriters and the Financial Adviser and each of their respective affiliates, each accordingly disclaim all and any liability whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise have in respect of this document or any such statement. No representation or warranty, express or implied, is made by any of the Underwriters or the Financial Adviser or any of their respective affiliates as to the accuracy, completeness or sufficiency of the information set out in this document.

In connection with the Global Offer, the Underwriters and the Financial Adviser and any of their respective affiliates acting as an investor for its or their own account(s) may subscribe for or purchase Shares and, in that capacity, may retain, purchase, sell, offer to sell or otherwise deal for its or their own account(s) in such securities, any other securities of the Company or other related investments in connection with the Global Offer or otherwise. Accordingly, references in this document to the Shares being issued, offered, subscribed or otherwise dealt with should be read as including any issue or offer to, or subscription or dealing by, the Underwriters or the Financial Adviser or any of them and any of their affiliates acting as an investor for its or their own account(s). None of the Underwriters or the Financial Adviser intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Each of the Underwriters and the Financial Adviser and any of their respective affiliates may have engaged in transactions with, and provided various investment banking, financial advisory and other services for, the Company and certain of the Selling Shareholders, for which they would have received customary fees. Each of the Underwriters and the Financial Adviser and any of their respective affiliates may provide such services to the Company and the Selling Shareholders and any of their respective affiliates in the future. In addition, certain of the Underwriters and the Financial Adviser and any of their respective affiliates may enter into financing arrangements (including swaps or contracts for differences) with investors in connection with which such Underwriters and/or the Financial Adviser or any of their respective affiliates may from time to time acquire, hold or dispose of Shares.

ii Notice to overseas investors The Shares have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) or with any securities regulatory authority of any state or other jurisdiction of the United States. The Shares offered by this document may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable state securities laws. The Underwriters, through their respective selling agents, may arrange for the Global Offer and resale of the Shares in the United States only to persons reasonably believed to be qualified institutional buyers (“QIBs”), as defined in, and in reliance on, the exemption from the registration requirements of the U.S. Securities Act provided in Rule 144A under the U.S. Securities Act, as amended (“Rule 144A”) or another exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. Prospective investors are hereby notified that the sellers of the Shares may be relying on the exemption from the provisions of section 5 of the U.S. Securities Act provided by Rule 144A.

This document is being furnished by the Company in connection with an offering exempt from the registration requirements of the U.S. Securities Act, solely for the purpose of enabling a prospective investor to consider the subscription for or acquisition of the Shares described herein. The information contained in this document has been provided by the Company and other sources identified herein.

THE SHARES HAVE NOT BEEN RECOMMENDED BY ANY US FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY, INCLUDING THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE “SEC”). FURTHERMORE, SUCH AUTHORITIES, INCLUDING THE SEC, HAVE NOT PASSED UPON OR ENDORSED THE MERITS OF THE OFFERING OF THE SHARES AND HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE US.

No actions have been taken to allow a public offering of the Shares under the applicable securities laws of any jurisdiction, including Australia, Canada or Japan. Subject to certain exceptions, the Shares may not be offered or sold in any jurisdiction, or to or for the account or benefit of any national, resident or citizen of any jurisdiction, including Australia, Canada or Japan. This document does not constitute an offer of, or the solicitation of an offer to subscribe for or purchase any of the Shares to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation in such jurisdiction.

The Shares have not been and will not be registered under the applicable securities laws of Australia, Canada or Japan. Subject to certain exceptions, the Shares may not be offered or sold in any jurisdiction, or to or for the account or benefit of any national, resident or citizen in Australia, Canada or Japan. The Shares have not been recommended by any US federal or state securities commission or regulatory authority. Further, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this document. Any representation to the contrary is a criminal offence in the United States.

The distribution of this document and the offer and sale of the Shares in certain jurisdictions may be restricted by law. No action has been or will be taken by the Company, the Selling Shareholders or the Underwriters to permit a public offering of the Shares under the applicable securities laws of any jurisdiction. Other than in the United Kingdom, no action has been taken or will be taken to permit the possession or distribution of this document (or any other offering or publicity materials relating to the Shares) in any jurisdiction where action for that purpose may be required or where doing so is restricted by law. Accordingly, neither this document, nor any advertisement, nor any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this document comes should inform themselves about and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction.

Notice in connection with member states of the European Economic Area This document has been prepared on the basis that all offers of Shares will be made pursuant to an exemption under the Directive 2003/71/EC, which includes any relevant implementing measure in each member state of the European Economic Area (“EEA”) which has implemented the Prospectus Directive, from the requirement to produce a prospectus for offers to the public of transferable securities. Accordingly any person making or intending to make any offer within the EEA of Shares which are the subject of the Global Offer contemplated in this document should only do so in circumstances in which no obligation arises for the Company or any of the Underwriters or the Financial Adviser to produce a prospectus for such offer. Neither the Company nor the

iii Underwriters nor the Financial Adviser or any of them have authorised, nor do they authorise, the making of any offer of Shares through any financial intermediary, other than offers made by the Underwriters which constitute the final placement of Shares contemplated in this document.

NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENCE HAS BEEN FILED UNDER CHAPTER 421 B OF THE NEW HAMPSHIRE REVISED STATUTES ANNOTATED, 1955, AS AMENDED (“RSA 421- B”), WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE OF THE STATE OF NEW HAMPSHIRE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE OR CAUSE TO BE MADE TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

Available information for investors in the United States The Company has agreed that, so long as any of the Shares offered hereby are “restricted securities” within the meaning of Rule 144A(a)(3) under the U.S. Securities Act, the Company will, during any period in which the Company is neither subject to section 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended, nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder, make available, upon request, to any holder or beneficial owner of Shares, or to any prospective subscriber of a Share designated by such holder or beneficial owner, the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the U.S. Securities Act.

No incorporation of website information The contents of the Company’s websites (www.bmstores.co.uk and www.bandmretail.com) do not form part of this document.

iv CONTENTS

Page SUMMARY INFORMATION ...... 1 RISK FACTORS ...... 14 GLOBAL OFFER STATISTICS ...... 28 EXPECTED TIMETABLE FOR THE GLOBAL OFFER ...... 29 DIRECTORS, DAILY MANAGER, REGISTERED OFFICE AND ADVISERS ...... 30 IMPORTANT INFORMATION ...... 32 PART 1: INDUSTRY OVERVIEW ...... 39 PART 2: BUSINESS ...... 43 PART 3: DIRECTORS, SENIOR MANAGERS AND CORPORATE GOVERNANCE ...... 68 PART 4: SELECTED FINANCIAL INFORMATION ...... 74 PART 5: OPERATING AND FINANCIAL REVIEW ...... 75 PART 6: CAPITALISATION AND INDEBTEDNESS STATEMENT ...... 99 PART 7: HISTORICAL FINANCIAL INFORMATION ...... 101 PART A: REPORT ON COMBINED FINANCIAL INFORMATION ...... 101 PART B: COMBINED FINANCIAL INFORMATION ...... 103 PART 8: UNAUDITED PRO FORMA FINANCIAL INFORMATION ...... 145 PART A: REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION ...... 145 PART B: UNAUDITED PRO FORMA FINANCIAL INFORMATION ...... 147 PART 9: THE GLOBAL OFFER ...... 149 PART 10: ADDITIONAL INFORMATION ...... 163 PART 11: DEFINITIONS ...... 214 SUMMARY INFORMATION

Summaries are made up of disclosure requirements known as “Elements”. These elements are numbered in Sections A–E (A.1–E.7).

This summary contains all the Elements required to be included in a summary for this type of security and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements.

Even though an Element may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of “not applicable”.

Section A–Introduction and warnings

Element Disclosure Requirement Disclosure

A.1 Introduction This summary should be read as an introduction to the prospectus. Any decision to invest in the securities should be based on consideration of the prospectus as a whole by the investor. Where a claim relating to the information contained in the prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating the prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, and applied its notification, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus or it does not provide, when read together with the other parts of the prospectus, key information in order to aid investors when considering whether to invest in such securities. A.2 Consent to use of the Not applicable. The Company is not engaging any financial prospectus intermediaries for any resale or final placement of securities after the publication of this document.

Section B–Issuer

Element Disclosure Requirement Disclosure

B.1 Legal and commercial name B&M European Value Retail S.A. (the “Company”). B.2 Domicile / legal form / The Company is a Grand Duchy of Luxembourg (“Luxembourg”) legislation / country of public limited liability company (société anonyme) incorporated incorporation under the laws of Luxembourg, with its registered office at 16, Avenue Pasteur, L-2310, Luxembourg. The principal legislation under which the Company operates, and under which the Company’s ordinary shares (“Shares”) are created is the Luxembourg law of 10 August 1915 on Commercial Companies, as amended. B.3 Current operations/ principal The Group is a general merchandise discount retailer in the UK activities and markets and Germany. Its UK business is one of the largest and most profitable companies in the fast growing general merchandise discount retail market in the UK, which the Directors believe is having a disruptive impact on the overall UK retail market. The Group has grown revenues from £764.2 million in the year ended

1 31 March 2012 to £1,272.0 million in the year ended 29 March 2014, demonstrating a compound annual growth rate (“CAGR”) of 29.0% over this three year period. The Directors believe that B&M stores offer a compelling customer proposition, combining leading brand fast-moving consumer goods (“FMCG”) products at attractive prices with a strong non-grocery product offering that together deliver sensational value to customers over a wide range of price points. Grocery products in B&M stores principally consist of branded food and FMCG products at competitive prices combined with typically higher priced non-grocery products. The Group delivers significant savings to the customer when compared to comparable products from other retailers. The Group operates a flexible store format and its dynamic trading strategy flexes its product ranges aggressively to take advantage of seasonal shifts in customer demand over the course of each year. Under this flexible category and space management model, the layout and stock keeping unit (“SKU”) range of each B&M store is regularly adjusted in order to maximise the space allocated to seasonal and other faster-moving merchandise, thus enabling the Group to “trade the seasons”. As a result, the Directors believe B&M stores compete across the UK grocery, specialist and general merchandise discount retail markets (the “Addressable Market”). Within the Addressable Market, the Group particularly focuses on the UK specialty retail segment, which was £127 billion in 2013, according to Euromonitor International. The Group has a well-developed Far East sourcing process that allows it to respond quickly to consumer taste. The Group has developed a strong and well-resourced in-house buying team, composed of over 100 people as of 29 March 2014, that leverages the Group’s strong supplier relationships to make informed sourcing decisions. This platform, as well as a highly focused approach to SKU count, allows the Group to deliver sensational value for money to customers, and disruptive pricing which the Directors believe has enabled it to attract and develop a broad and loyal customer base. As of 29 March 2014, the Group operated a network of 373 general merchandise discount retail stores located throughout the UK, in town centres and in out-of-town locations such as retail parks. The Group has a strong and consistent track record of successfully opening new stores in the UK. Based on an analysis conducted by OC&C Strategy Consultants LLP (“OC&C”) in March 2014, the Directors believe that the UK currently could support around 850 total B&M stores. Approximately 66% of the UK population still did not have easy access to a B&M store (i.e. meaning less than a 10 minute car drive), as of 26 March 2014, according to OC&C. As of 29 March 2014, the Group employed over 15,900 employees, including part-time employees. The Group operates a well-invested warehouse and distribution system for B&M stores that consists primarily of its two principal distribution centres in Speke near Liverpool, which are well located as a majority of its shipments from China arrive at the port of Liverpool. The Group operates an in-house fleet of heavy goods vehicles for B&M store deliveries and intra-warehouse transfers. The Directors believe that the Group has the existing infrastructure necessary to support up to 500 B&M stores across the UK. Non- binding heads of terms for the lease of an additional distribution centre in Southern England have been agreed, however it is not

2 expected that the additional distribution centre will be operational until the year ending 25 March 2017, which would enable the Group to make progress towards its eventual target of 850 B&M stores in the UK. The Directors believe that there is also the potential for the Group to expand its operations within the European general merchandise discount retail market. On 30 April 2014, the Group acquired a majority stake in J.A. Woll Handels GmbH (the “JA Woll Group”), which owns and operates 49 stores. This provides the Group with an attractive platform for growth in Germany. The Group’s diversified product offering and sensational value proposition to customers have resulted in a consistent track record of strong growth in revenue and EBITDA. The Group’s strong growth has been delivered under its experienced founder-led management team. The Group’s senior management includes seasoned retail industry professionals, supported by a well-trained employee base with strong and high quality buying, retail and operational teams. The Group’s total revenue and EBITDA were £764.2 million and £62.8 million for the year ended 31 March 2012, £992.9 million and £88.0 million for the year ended 30 March 2013, and £1,272.0 million and £112.7 million for the year ended 29 March 2014. The Group’s revenue grew by a CAGR of 29.0% over the three year period ended 29 March 2014, and its EBITDA grew by a CAGR of 34.0% over the same three year period. The Group has also recorded strong and consistent like-for-like revenue growth over the last three years to 29 March 2014, with average annual like-for-like revenue growth of 6.1% over the period. The above financial performance to 29 March 2014 does not include the JA Woll Group which was acquired subsequent to the 2014 financial year end. B.4a Significant recent trends The Group operates principally in the UK retail market. The total affecting the Group and the UK retail market had total store-based retail sales of £290 billion in industry in which it operates 2013 and has grown by a CAGR of 1.3% between 2008 and 2013. The UK retail market is broadly split into three main segments: • Grocery retailers account for the largest segment with total store-based retail value sales of £157 billion, which have grown by a CAGR of 3.4% between 2008 and 2013. (Source: Euromonitor International). • Specialist retailers, which include apparel, electronics, health and beauty, home and garden, leisure and department stores, had total store-based retail value sales of £127 billion in 2013, which decreased by a CAGR of 1.3% between 2008 and 2013. (Source: Euromonitor International). • General merchandise discount retailers, which principally include single pound and selected other discount retailers but exclude grocery discounters, had total store-based retail value sales of £6.8 billion in 2013, which have grown by a CAGR of 14.5% between 2006 and 2013. (Source: Planet Retail). The Directors believe that there has been a structural shift that has been driven by the following demand and supply trends: • A tightening of real disposable incomes has squeezed the consumer and propelled the demand for value across all elements of the consumer’s nondiscretionary and discretionary spend. • Suppliers have had to react and adapt accordingly to this structural shift and global FMCG companies now support

3 discount retailers through dedicated national account managers, access to leading brand products, provision of differentiated pack sizes where necessary, and special product offers. • Landlords have acknowledged the benefits of having a tenant such as the Group in their retail parks or shopping centres as discount retailers drive footfall to the location and are perceived as attractive tenants from a financial point of view. The Directors expect that these trends outlined above will continue to develop, driven by: • Continued roll-out of discount retailers in the UK providing greater access to the consumer; • Increasing transparency (especially online) across retailers’ prices allowing consumers to bargain hunt more effectively; • Increased transaction volumes and basket spend as the discount channel is increasingly accepted as a complementary shopping channel; and • Continued support from FMCG companies and other non- grocery suppliers. B.5 Description of issuer’s group As at the date of this document, the Group comprises B&M European Value Retail 1 S.à r.l. (“B&M European Value Retail 1”) and its subsidiary undertakings. B&M European Value Retail 1 is currently owned by (1) CD&R European Value Retail Investment (Cayman) L.P. (“CD&R European Value Retail Investment (Cayman)”), (2) Sundeep (Simon) Arora, (3) Bobby Arora, (4) Robin Arora, (5) Rani 1 Life Interest Trust (in which Simon Arora has an indirect beneficial interest) and (6) Rani 2 Life Interest Trust (in which Bobby Arora has an indirect beneficial interest). CD&R European Value Retail Investment (Cayman) is a limited partnership owned by (1) Clayton, Dubilier & Rice Fund VIII, L.P. (“CD&R Fund VIII”), (2) CD&R Friends & Family Fund VIII, L.P. (“F&F Fund VIII”), (3) CD&R Advisor Fund VIII Co- Investor, L.P. (“Advisor Fund VIII Co-Investor”) and (4) CD&R B&M Co-Investor, L.P. (“B&M Co-Investor,” and together with F&F Fund VIII and Advisor Fund VIII Co-Investor, the “CD&R Co-Investment Vehicles”; and CD&R Fund VIII together with the CD&R Co-Investment Vehicles, the “CD&R Investors”). CD&R Fund VIII and each of the CD&R Co-Investment Vehicles is managed by Clayton, Dubilier & Rice, LLC (“CD&R”). Following completion of certain reorganisation steps effective and conditional on Admission (the “Reorganisation”), (1) B&M European Value Retail 1 will become a direct wholly owned subsidiary of the Company, and the Company will be the parent holding company of the Group, comprising the Company and its subsidiary undertakings, (2) CD&R European Value Retail Investment S.à r.l. (“CD&R Holdco”) will become the new direct shareholding company in the Company for CD&R European Value Retail Investment (Cayman), and (3) SSA Investments S.à r.l. (“SSA Holdco”) will become the new direct shareholding company in the Company for Simon Arora and Bobby Arora. Following completion of the Reorganisation, Robin Arora, Rani 1 Life Interest Trust (in which Simon Arora and members of his family have indirect beneficial interests), Rani 2 Life Interest Trust (in which Bobby Arora and members of his family have indirect beneficial interests) and Praxis Nominees Limited (which holds

4 shares on behalf of SSA Holdco, Rani 1 Life Interest Trust, Rani 2 Life Interest Trust and Robin Arora) will continue to hold their interests in the Company directly. As a result of the Global Offer, the shareholdings of SSA Holdco (in which Simon Arora and Bobby Arora each hold a 50% interest), Robin Arora, Praxis Nominees Limited and CD&R Holdco in the Company will be 26.2%, 0.5%, 1.1% and 31.4%, respectively, of the Company’s voting rights (assuming no exercise of the Over-allotment Option). As a result of the Global Offer, Simon Arora and Bobby Arora will each hold in aggregate directly and indirectly a 14.0% interest in the Company. B.6 Shareholders As at the date of this document (assuming the Reorganisation has been completed in full), B&M European Value Retail 1’s significant shareholders are Simon Arora (holding directly and indirectly, 19.1% of B&M European Value Retail 1’s voting rights), Bobby Arora (holding directly and indirectly, 19.1% of B&M European Value Retail 1’s voting rights), Robin Arora (holding directly and indirectly, 9.4% of B&M European Value Retail 1’s voting rights) and CD&R European Value Retail Investment (Cayman) (holding 52.3% of B&M European Value Retail 1’s voting rights). Immediately following Admission (and assuming no exercise of the Over-allotment Option), the Company’s shareholders directly interested in 5% or more of the Company’s issued share capital will be (1) SSA Holdco, holding 26.2% and (2) CD&R Holdco, holding 31.4%. Immediately following Admission (and assuming no exercise of the Over-allotment Option), Simon Arora and Bobby Arora will be shareholders interested in 5% or more of the Company’s issued share capital, as they will each directly and indirectly hold a 14.0% aggregate interest in the Company’s issued share capital. Save for the significant shareholders noted above, in so far as is known to the Directors, there is no other person interested in 5% or more of the issued share capital of the Company or any other person who can, will or could, directly or indirectly, jointly or severally, exercise control over the Company. None of the Company’s shareholders has or will have, immediately following Admission, different voting rights attached to the Shares that they hold in the Company.

5 B.7 Selected historical key The following tables present selected financial information of financial information B&M European Value Retail 1 and its subsidiary undertakings as at the dates and for the periods indicated. Combined Statement of Comprehensive Income Data For the year ended 29 March 30 March 31 March 2014 2013 2012 £’000 Revenue ...... 1,271,980 992,925 764,160 Cost of sales ...... (839,972) (653,291) (507,138) Gross profit ...... 432,008 339,634 257,022 Administrative expenses (excluding restructuring fees) ...... (315,044) (243,952) (198,053) Restructuring fees ...... — (7,361) — Other operating expenses ...... (13,998) (7,924) (3,440) Operating profit ...... 102,966 80,397 55,529 Financial costs ...... (101,195) (18,427) (1,821) Finance income ...... 1,855 320 45 Profit before tax ...... 3,626 62,290 53,753 Income tax expense ...... (6,939) (18,060) (14,428) (Loss)/Profit for the year ...... (3,313) 44,230 39,325

Combined Statement of Financial Position Data As at 29 March 30 March 31 March 2014 2013 2012 £’000 Non-current assets: ...... 970,857 948,223 87,071 Current assets: ...... 241,583 189,117 150,388 Total assets ...... 1,212,440 1,137,339 237,459 Total equity ...... 18,902 15,594 (104,233) Total current liabilities ...... (751,395) (123,148) (86,276) Total non-current liabilities ...... (479,947) (1,029,785) (46,950) Total liabilities ...... (1,231,342) (1,152,933) (133,226) Total equity and liabilities ...... (1,212,440) (1,137,339) (237,459)

Combined Statement of Cash Flows Data For the year ended 29 March 30 March 31 March 2014 2013 2012 £’000 Net cash flows from operating activities ...... 78,088 80,825 42,890 Net cash flows from investing activities ...... (33,028) (792,813) (9,562) Net cash flows from financing activities ...... (46,560) 725,917 (24,400) Net increase/(decrease) in cash and cash equivalents ...... (1,501) 13,930 8,928 Cash and cash equivalents at the beginning of the year ...... 26,403 12,473 3,545 Cash and cash equivalents at the end of the year ...... 24,902 26,403 12,473 There has been no significant change in the financial or trading position of the Company since it was incorporated on 19 May 2014. Save for the acquisition of the JA Woll Group, there has been no significant change in the financial or trading position of the Group since 29 March 2014, the date to which the accountants’ report in respect of B&M European Value Retail 1 has been prepared.

6 B.8 Pro forma financial The unaudited pro forma statement of net assets set out below has information been prepared to illustrate the effect on the net assets of the Group of the receipt by the Company of the net proceeds of the Global Offer from the issuance of New Shares, the repayment by the Group of outstanding amounts of principal and interest under certain existing banking facilities and borrowings by the Group under certain new banking facilities (the “Refinancing”) and the Reorganisation, as if they had taken place on 29 March 2014. This unaudited pro forma statement of net assets has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and, therefore, does not represent the Group’s actual financial position or results. This unaudited pro forma statement of net assets is compiled on the basis set out below from the International Financial Reporting Standards combined statement of financial position of B&M European Value Retail 1 as at 29 March 2014. It may not, therefore, give a true picture of the Group’s financial position or results nor is it indicative of the results that may or may not be expected to be achieved in the future.

Adjustments As at Global Unaudited 29 March Offer net pro forma 2014(1) proceeds(2) Reorganisation(3) Refinancing(4) total(5) £’000 Assets: Non-current assets: Goodwill ...... 807,496 —— —807,496 Other intangible assets ...... 94,307 —— —94,307 Investments in associates ...... 2,093 —— —2,093 Property, plant and equipment ...... 64,996 —— —64,996 Other non-current financial assets ...... 1,819 —— —1,819 Deferred tax assets ..... 146 —— — 146 Total non-current assets ...... 970,857 —— —970,857 Current assets: Inventories ...... 170,371 —— —170,371 Trade and other receivables ...... 45,951 —— —45,951 Other current financial assets ...... — —— —— Income tax receivable . . 359 —— 6,801 7,160 Cash and cash equivalents ...... 24,902 50,000 — (21,248) 53,654 Total current assets ... 241,583 50,000 — (14,447) 277,135 Total assets ...... 1,212,440 50,000 — (14,447) 1,247,992 Equity: Share capital ...... — (56,600) (624,991) — (681,591) Foreign exchange reserve ...... (3) —— — (3) Capital redemption reserve ...... — — — —— Retained loss/(earnings) ...... 18,905 ——22,767 41,673 Total equity ...... 18,902 (56,600) (624,991) 22,767 (639,921)

Liabilities: £’000 Non-current liabilities: Interest-bearing loans and borrowings ...... (423,930) 6,600 — (16,070) (433,400) Other non-current financial liabilities . . . — —— —— Provisions ...... (2,149) —— —(2,149) Other liabilities ...... (34,856) —— —(34,856) Deferred tax liabilities . . (19,012) —— —(19,012) Total non-current liabilities ...... (479,947) 6,600 — (16,070) (489,417)

7 Adjustments As at Global Unaudited 29 March Offer net pro forma 2014(1) proceeds(2) Reorganisation(3) Refinancing(4) total(5)

Current liabilities: Trade and other payables ...... (110,233) —— —(110,233) Interest-bearing loans and borrowings ...... (632,741) — 624,991 7,750 — Other current financial liabilities ...... (1,447) —— —(1,447) Income tax payable .... — —— —— Provisions ...... (6,974) —— —(6,974) Total current liabilities ...... (751,395) — 624,991 7,750 (118,654) Total liabilities ...... (1,231,342) 6,600 624,991 (8,320) (608,071) Total Equity and Liabilities ...... (1,212,440) (50,000) — 14,447 (1,247,992)

(1) The financial information has been extracted, without material adjustment, from the combined statement of financial position of B&M European Value Retail 1 S.à r.l. as at 29 March 2014, as set out in Part 7: Historical Financial Information. (2) The Global Offer will raise gross proceeds for the Company of £75 million through the issue of 27,777,778 New Shares at the Offer Price. Net proceeds of £50 million through the issue of New Shares reflect the deduction of estimated fees and expenses in connection with the Global Offer of £25 million, of which £6.6 million relates to arrangement fees for the New Facilities. (3) Adjustments have been made to reflect the exchange of and the re-designation of £622.8 million preferred equity certificates with a total nominal value of £556.1 million (the “Preferred Equity Certificates”) and £66.7 million accrued Preferred Equity Certificates dividends to 29 March 2014 as Existing Shares in the Company. Preference shares and ordinary shares of £2.2 million are also exchanged and re-designated as New Shares in the Company. (4) As set out in the paragraph headed “Reasons for the Global Offer and use of proceeds” in Part 9: The Global Offer, the Company intends to use the net proceeds receivable by the Company from the Global Offer, together with the proceeds of borrowings under the New Facilities of £440 million (less £6.6 million of arrangement fees) to repay the Senior Facilities of £461.2 million, including £3.6 million of accrued interest to 29 March 2014 in connection with the facility loans, which has been charged within “finance costs” in the income statement. The net cash impact of these pro forma adjustments is £21.2 million. Accrued interest on the Senior Facilities at the date of repayment will be £6.1 million, reflecting accrued interest at 29 March 2014, plus interest charged less interest paid in the period from 30 March 2014 to the date of repayment. The unamortised arrangement fees of £29.6 million on the repaid Senior Facilities are written off to the income statement with an associated corporation tax credit of £6.8 million based on a corporation tax rate of 23%. Non Current current Total £’000 Debt as at 29 March 2014 ...... 7,750 423,930 431,680 Unamortized arrangement fees (see below) ..... — 29,568 29,568 Net cash outflow to repay the Senior Facilities ...... (7,750) (13,498) (21,248) — 440,000 440,000 Less: arrangement fees on the New Facilities . . . — (6,600) (6,600) Pro forma debt balance ...... — 433,400 433,400 Unamortised arrangement fees: £’000 Gross amount of unamortised fees to be written off ...... 29,568 Corporation tax credit ...... (6,801) Net amount written off ...... 22,767 (5) Other than the adjustments detailed above, no other adjustments have been made for events occurring after 29 March 2014. B.9 Profit forecast / estimate Not applicable. There is no profit forecast or estimate. B.10 Audit report—qualifications Not applicable. There are no qualifications in the accountant’s reports on the historical financial information included in this document. B.11 Working capital Not applicable. The Company is of the opinion that, taking into account the net proceeds of the Global Offer receivable by the Company, the Group has sufficient working capital for its present requirements, that is, for at least the 12 months following the date of publication of this document.

8 Section C—Securities

Element Disclosure Requirement Disclosure

C.1 Description of the type and The Company is offering 27,777,778 new Shares (the “New Shares”) the class of the securities and Simon Arora, Bobby Arora, Rani 1 Life Interest Trust, Rani 2 Life being offered and/or admitted Interest Trust, Robin Arora, Praxis Nominees Limited and CD&R to trading, including ISIN Holdco (the “Selling Shareholders”) are offering an aggregate of and SEDOL number 372,222,222 existing Shares (the “Existing Shares”) at an offer price of 270 pence (the “Offer Price”) per Share to certain institutional and other investors (being those who would be exempt from the prospectus requirements as set out under article 5(2) of the Luxembourg Prospectus Law) (the “Offer”), including the issuance by the Company of 77,777 New Shares (the “Allocated Shares”) at the Offer Price pursuant to subscription agreements with certain independent non-executive directors (the “Subscription” and, together with the “Offer”, the “Global Offer”). The New Shares to be issued under the Global Offer will represent 2.8% of the issued share capital of the Company immediately following Admission. Under the Global Offer, the Shares are being sold to: (i) certain institutional and professional investors in the United Kingdom and elsewhere outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”); and (ii) persons reasonably believed to be qualified institutional buyers in the United States in reliance on Rule 144A under the U.S. Securities Act or another exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. In connection with the Global Offer, BofA Merrill Lynch (the “Stabilising Manager”) may, for stabilisation purposes, over-allot Shares up to a maximum of 10% of the total number of Shares comprised in the Global Offer. For the purposes of allowing the Stabilising Manager to cover short positions resulting from any such over-allotments and/or from sales of Shares effected by it during the stabilising period, it is expected that Simon Arora, Bobby Arora and Robin Arora (either directly or indirectly) and CD&R Holdco (the “Over-allotment Shareholders”) will grant to it, on behalf of BofA Merrill Lynch, Goldman Sachs International, Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, London Branch, Jefferies International Limited and Numis Securities Limited (together, the “Underwriters”), an option (the “Over-allotment Option”) pursuant to which the Stabilising Manager may require the Over-allotment Shareholders to sell additional Existing Shares in an amount of up to a maximum of 10% of the total number of Shares comprised in the Global Offer (the “Over-allotment Shares”) at the Offer Price. The Over-allotment Option is exercisable in whole or in part, upon notice by the Stabilising Manager, at any time on or before the 30th calendar day after the commencement of conditional dealings of the Shares on the London Stock Exchange plc (the “London Stock Exchange”). Following Admission to Trading, the Shares, as represented by the Depository Interests, will be registered with ISIN LU1072616219 and SEDOL number BMTRW10. C.2 Currency of issue Pounds sterling.

9 C.3 Issued share capital As at the date of this document, the issued share capital of the Company is £26,000, comprising 260,000 ordinary shares of 10 pence each, all of which were fully paid. Immediately following Admission, the issued share capital of the Company is expected to be £100,000,000 comprising 1,000,000,000 Shares of 10 pence each, all of which will be fully paid or credited as fully paid. C.4 Rights attaching to the Shares • The Shares rank equally for voting purposes. On a show of hands each shareholder has one vote and on a poll each shareholder has one vote per Share held. • Each Share ranks equally for any dividend declared. Each Share ranks equally for any distributions made on a winding up. • Each Share ranks equally in the right to receive a relative proportion of shares in case of a capitalisation of reserves. C.5 Restrictions on transfer Not applicable. The Shares will be freely transferable upon Admission. C.6 Admission to trading Application has been made to the UK Financial Conduct Authority, acting in its capacity as the competent authority under the Financial Services and Markets Act 2000, as amended (the “UKLA”) and the London Stock Exchange, respectively, for admission of all of the Shares in the capital of the Company issued and to be issued: (i) to the premium listing segment of the Official List of the UKLA, acting in its capacity (the “Official List”and“Admission to Listing”, respectively); and (ii) to the main market for listed securities of the London Stock Exchange (“Admission to Trading” and, together with Admission to Listing, “Admission”). C.7 Dividend policy The Directors intend to adopt a progressive dividend policy, targeting initially a payout ratio of approximately 30% to 40% of net income on a normalised tax basis. Assuming that there are sufficient distributable reserves available at the time, the Directors intend that the Company will pay an interim dividend and a final dividend in respect of each financial year in the approximate proportions of one-third and two-thirds, respectively, of the total annual dividend. The first dividend to be paid by the Company is intended to be the interim dividend, which will be pro rata for the period from Admission to 30 September 2014. This first dividend is expected to be paid in January 2015. The Directors intend to declare a final dividend in May 2015 in respect of the year ending 28 March 2015 which is expected to be paid in July 2015.

Section D—Risks

Element Disclosure Requirement Disclosure

D.1 Key risks that are specific to The Group’s business is impacted by the prevailing UK, German and the issuer or its industry global economic climate, and any fluctuation of or uncertainty in global markets may result in a reduction in discretionary purchases by its customers and have a material adverse effect on its business, results of operations, financial condition or prospects. A failure to implement the Group’s growth strategy in terms of increasing the density of its stores in the UK and further expanding the German operation or increasing sales at existing stores could undermine the Group's ability to achieve its targeted returns.

10 The success of the Group’s business depends on its ability to import and transport goods to and from its distribution centres to its stores, and any disruption, malfunction, increased costs or failure to make improvements in that supply and distribution chain could affect its profitability. The Group operates in the highly competitive UK general merchandise discount retail sector and faces competition from a wide range of retailers of varying sizes and covering different product categories across a broad number of geographies. There can be no assurance that the Group will be able to respond adequately to these multiple sources and forms of competition, which could have a material adverse effect on its business, results of operations, financial condition or prospects. The Group’s business could suffer as a result of weak sales during peak selling seasons, or extreme or unseasonal weather conditions. It purchases significant additional inventory in advance of peak selling seasons in anticipation of higher sales during these periods. If sales during the Group’s peak trading seasons or during extreme weather are significantly lower than it expects, it may have to rely on markdowns or promotional sales to sell its excess inventory, which could have a material adverse effect on its business, results of operations, financial condition or prospects. D.3 Key risks relating to the There is no existing market for the Shares and the Company does not Shares know if one will develop, which could impede an investor’s ability to sell Shares and depress the market price of the Shares. The Shares could be subject to market price volatility and the market price of the Shares may decline in response to developments that are unrelated to the Company’s operating performance, including, but not limited to, market speculation, general economic, industry and stock market conditions, regulatory changes and exchange rate fluctuations. Sales of substantial amounts of Shares, for example, following the expiry of the lock-up period, or the issuance of additional Shares in the future, may result in a decline in the market price of the Shares, and shareholders could earn a negative or no return on their investment in the Company. Shareholders in the United States or other jurisdictions outside the UK may not be able to participate in future equity offerings.

Section E—Offer

Element Disclosure Requirement Disclosure

E.1 Net proceeds / expenses The Company intends to raise gross proceeds of £75 million from the issue of New Shares pursuant to the Global Offer. After deducting underwriting commissions, other estimated offering-related fees and expenses, value added tax and stamp duty aggregating approximately £25 million, the Company expects to receive net proceeds of £50 million. The Company will not receive any of the net proceeds from the sale of the Existing Shares, all of which will be received by the Selling Shareholders. E.2a Reasons for the offer / use of The Directors believe that the Global Offer and Admission will proceeds position the Group for the next stage of its development, including by further raising the profile of the Group, assisting in retaining and incentivising senior management and key employees, and providing it with a platform for continued growth.

11 The Company intends to raise gross proceeds of £75 million from the issue of New Shares pursuant to the Global Offer. After deducting underwriting commissions and other estimated fees and expenses incurred in connection with the Global Offer, the Company expects to receive net proceeds of £50 million. The Company will not receive any proceeds from the sale of Existing Shares, including pursuant to any exercise of the Over-allotment Option. The principal uses of the net proceeds of the Global Offer received by the Company are as follows: • to facilitate part of the repayment of outstanding amounts under the Senior Facilities; and • for general corporate purposes. BofA Merrill Lynch and Goldman Sachs International (which are also acting as joint sponsors), together with Credit Suisse Securities (Europe) Limited and Deutsche Bank AG, London Branch (or their respective affiliates) are members of the syndicate constituting the lenders under the Senior Facilities. It is expected that, as a result of the Group’s repayment described above, their existing outstanding loans to the Group of approximately £14.9 million, £35.2 million, £1.5 million and £16.1 million, respectively, will be repaid in full in line with the approach taken with respect to all other members of the existing syndicate of lenders under the Senior Facilities. The Directors believe that the repayment of the Senior Facilities and their replacement with the £590 million new facilities (the “New Facilities”) will assist in making the capital structure more appropriate for a listed company. E.3 Terms and conditions of the Under the Global Offer, the Company is offering 27,777,778 New offer Shares and the Selling Shareholders are offering an aggregate of 372,222,222 Existing Shares at the Offer Price per Share to certain institutional and other investors (being those who would be exempt from the prospectus requirements as set out under article 5(2) of the Luxembourg Prospectus Law). In connection with the Global Offer, the Stabilising Manager may, for stabilisation purposes, over-allot Shares up to a maximum of 10% of the total number of Shares comprised in the Global Offer. For the purposes of allowing the Stabilising Manager to cover short positions resulting from any such over-allotments and/or from sales of Shares effected by it during the stabilising period, it is expected that the Over-allotment Shareholders will grant to it, on behalf of the Underwriters, the Over-allotment Option pursuant to which the Stabilising Manager may require the Over-allotment Shareholders to sell the Over-allotment Shares at the Offer Price. Admission is expected to become effective, and unconditional dealings in the Shares are expected to commence on the London Stock Exchange, at 8.00 a.m. (London time) on 17 June 2014. It is expected that dealings in the Shares will commence on a conditional basis on the London Stock Exchange at 8.00 a.m. (London time) on 12 June 2014. The earliest date for settlement of such dealings will be 17 June 2014. All dealings in Shares prior to the commencement of unconditional dealings will be on a “when issued basis”, will be of no effect if Admission does not take place and will be at the sole risk of the parties concerned.

12 The Global Offer is subject to the satisfaction of conditions contained in the underwriting agreement between the Company, the Directors, the Selling Shareholders, the Over-allotment Shareholders and the Underwriters dated 12 June 2014 (the “Underwriting Agreement”) which are customary for transactions of this type, including Admission becoming effective by no later than 8.00 a.m. (London time) on 17 June 2014 and on the Underwriting Agreement not having been terminated prior to Admission. None of the Shares may be offered for subscription, sale or purchase or be delivered, or be subscribed, sold or delivered, and this document and any other offering material in relation to the Shares may not be circulated, in any jurisdiction where to do so would breach any securities laws or regulations of any such jurisdiction or give rise to an obligation to obtain any consent, approval or permission, or to make any application, filing or registration other than where such consents, approvals, permissions have already been obtained in connection with Admission. E.4 Material interests Not applicable. There are no interests, including conflicting interests, that are material to the Global Offer, other than those disclosed in Element B.6 above. E.5 Lock-up arrangements 400,000,000 Shares in aggregate under the Global Offer are being issued or sold by the Company and the Selling Shareholders. Each Selling Shareholder (other than CD&R Holdco), each Director, SSA Holdco and the Company is subject to a 365 day lock-up period following Admission, during which time it or he may not issue any New Shares (in the case of the Company) or dispose of any interest in its or his Shares without the consent of BofA Merrill Lynch and Goldman Sachs International as the joint global co-ordinators. For a 180 day lock-up period, CD&R Holdco will not dispose of any interest in its Shares without the consent of BofA Merrill Lynch and Goldman Sachs International as the joint global co- ordinators. All lock-up arrangements are subject to certain customary exceptions. E.6 Dilution Shareholdings immediately prior to Admission will be diluted by 2.8% as a result of the 27,777,778 New Shares issued as part of the Global Offer. E.7 Estimated expenses charged Not applicable. There are no commissions, fees or expenses to be to investors charged to investors by the Company or the Selling Shareholders under the Global Offer.

13 RISK FACTORS

Prior to investing in the Shares, prospective investors should carefully consider all of the information contained in this document including, in particular, the risk factors described below. The risk factors set out in this document, alone or collectively, may reduce the value of the Shares and could result in a loss of all, or a portion, of an investor’s investment in the Shares. The following list of risks which investors may face when making an investment in the Shares should be used as guidance only. Additional risks and uncertainties relating to the Group that are not currently known to the Company, or that it currently deems immaterial, may individually or cumulatively also have a material adverse effect on the Group’s business, results of operations, financial condition and/or prospects and, if any such risk should occur, the price of the Shares may decline and investors could lose all or part of their investment.

Prospective investors should note that the risks relating to the Group, its industry and the Shares summarised in the section entitled Summary Information are the risks that the Company and the Directors believe to be the most essential to an assessment by a prospective investor of whether to consider an investment in the Shares. However, as the risks which the Group faces relate to events and depend on circumstances that may or may not occur in the future, prospective investors should consider not only the information on the key risks summarised in the section entitled Summary Information but also, among other things, the risk factors and uncertainties described below.

An investment in the Shares involves complex financial risks and is suitable only for investors who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. Investors should consider carefully whether an investment in the Shares is suitable for them in light of the information in this document and their personal circumstances. References in this section to the Group include, where applicable and as the context may require, references to all members of the Group or any individual member of the Group.

Risks related to the Group’s business Economic conditions and other contributors to disposable income in the UK, Germany and globally may adversely impact the Group’s business. The Group’s business is impacted by the prevailing UK, German and global economic climate, inflation, levels of employment, real disposable income, salaries, wage rates including any increase as a result of payroll cost inflation or governmental action to increase minimum wages or contributions to pension provisions, interest rates, the availability of consumer credit, consumer confidence and consumer perception of economic conditions. In particular, in a period of economic uncertainty or downturn, there might be a decrease in higher margin “impulse purchases” and/or discretionary purchases. Under stronger economic conditions, when consumers have more disposable income, the Directors believe that consumers will continue to shop in the Group’s stores, and may spend more, including on higher value discretionary products. However, there is a risk that the Group could also be adversely impacted during a period of economic growth, as consumer confidence grows and consumers switch their discretionary spending to competitors offering more expensive products or which are not viewed as discount retailers. Global economic conditions and uncertainties may also impact the Group’s suppliers, including for example, supplier plant closures or increases in the cost of merchandise. Any of these trends may have a material adverse effect on the Group’s business, results of operations, financial condition, or prospects.

A failure to implement the Group’s growth strategy may adversely affect its business. The Group’s growth strategy involves continuing to rapidly expand its network of stores in order to increase the density of stores in the UK and Germany and increasing sales in its existing stores. The Group’s ability to successfully expand its network of stores, by opening stores that prove to be profitable, depends on several factors, including: the availability of attractive store locations; the absence of occupancy delays; the successful negotiation of favourable lease terms; the ability to hire and train new personnel, especially store managers, in a cost efficient manner; the ability to identify customer demand in different geographic areas; general economic conditions and the availability of sufficient funds for expansion. The expansion of the Group’s store network is a large part of its strategy to increase customer awareness of its brands. The Group’s ability to increase sales in existing stores is dependent on factors such as competition, merchandise sourcing and selection, prices, store operations, product range and customer satisfaction.

14 A number of factors, including the manifestation of the other risks described in this document, could prevent the Group’s strategy from being met in full or in a prompt manner. Delays or failures in opening new stores, achieving lower than expected sales in new stores, drawing a greater than expected proportion of sales in new stores from existing stores, higher store costs, inability to increase brand awareness in a cost-effective manner, or at all, or any failure to achieve targeted results associated with the implementation of operational programmes or initiatives, could materially adversely affect the Group’s growth and/or profitability. In addition, the Group may not anticipate all of the challenges imposed by the expansion of its operations and, as a result, may not meet its targets for opening new stores or expanding profitably. The Group also may experience logistical difficulties associated with the expansion of its operations.

Some of the Group’s new stores may be located in regions of the UK where B&M currently has less of a presence, including Southern England, and those markets may have different competitive conditions, market conditions, consumer tastes and discretionary spending patterns than the Group’s existing markets, which may cause the Group’s new stores to be less successful than its stores in its existing markets. The opening of new stores could also result in the diversion of sales from its existing stores creating an over-saturation of the market, which may cause a reduction in sales at affected stores. There can be no assurance that the Group will continue to implement successfully the rapid expansion of its store network or increase brand recognition, and any failure to do so could materially adversely affect the Group’s business, results of operations, financial condition or prospects.

A disruption or malfunction, or increased costs or failure to make improvements in the operation, expansion or replenishment, of the Group’s distribution centres, transportation fleet or supply chain could have a material adverse effect on the Group’s business, results of operations, financial condition, or prospects. Any major breakdown of plant or equipment, information technology systems failure or disruption, accidents such as a serious fire or flood, industrial disputes or other interruption or malfunction at the Group’s distribution centres (or at any future new distribution centre), at the Group’s offices, at any of the Group’s key suppliers, which affects the operations of the Group’s in-house transportation fleet or which otherwise impacts the Group’s supply chain, may significantly impact the Group’s ability to manage its operations, distribute products to its stores and maintain an adequate product supply chain.

The Group’s UK business has two principal distribution centres located in Speke, two secondary distribution centres located in Knowsley and Blackpool and an in-house transportation fleet responsible for product storage and the delivery of products, respectively, to B&M stores across the UK. In addition, the Group receives imported products via the Liverpool docks and the transportation of containers from the docks to the Group’s distribution centres is subcontracted to two main providers. Any serious disruption or malfunction at these distribution centres, at the Liverpool docks, or with its transport fleet or its subcontractors’ operations could render the Group unable to distribute products to its stores or at a reduced capacity. Such disruption could have an adverse effect on the Group’s in-store inventory and therefore could materially adversely affect its business, results of operations, financial condition, or prospects. A disaster or disruption in the infrastructure that supports the Group’s business could have a material adverse effect on its ability to continue to operate its business without interruption. Whilst the Group has established disaster recovery procedures, these may not be sufficient to mitigate the harm that may result from such a disaster or major disruption.

The success of the Group’s UK and German businesses also depends on its ability to transport goods from its distribution centres to its stores in a timely and cost-effective manner. Any unexpected delivery delays, for example due to severe weather, disruptions to, or malfunctions in, the national or international transportation infrastructure, or increases in transportation costs, such as due to increased fuel costs, could materially adversely affect the Group’s business. While the Group delivers all its goods from its distribution centres to its stores, it relies on third-party transportation providers to deliver the container loads of imported products from the Far East from the docks to the appropriate distribution centre. The Group also sub-contracts some store deliveries (in particular to its stores in Northern Ireland and some of the deliveries for J.A. Woll Handels GmbH (the “JA Woll Group”)). The Group’s use of third-party transportation providers is subject to risks of those third parties, which are outside of the Group’s control, such as labour shortages and work stoppages, and any disruption, unanticipated expense or operational failure related to these services could negatively affect its business, results of operations, financial condition, or prospects.

The Group also needs to ensure that its distribution infrastructure is able to adequately support its anticipated growth and increased number of stores by providing sufficient scalable space and distribution capacity. Any failure to successfully increase capacity for storing and distributing products in the UK may reduce the ability of

15 the Group to grow and could adversely affect the Group’s business. There can be no assurance that the costs of investments in improving the Group’s logistics and distribution infrastructure will not exceed estimates or that such investments will be as beneficial as predicted. If the Group is unable to realise the benefits of an improved logistics and distribution infrastructure, the Group’s business, results of operations, financial condition, or prospects could be materially adversely affected.

The Group principally operates in the highly competitive UK and German general merchandise discount retail sector. The UK and German retail industry, and more specifically, the general merchandise discount retail market, is highly competitive, particularly with respect to price, product selection and quality, store location and design, inventory, customer service, advertising and marketing. The Group competes at the national and local levels with a wide variety of retailers of varying sizes and covering different product categories across all of the geographic markets in the UK in which it operates. The Group’s competitors include other multi-price general merchandise discount retailers, fixed-price general merchandise discount retailers, grocery discounters, supermarkets and high street, internet or specialty retailers in particular categories, such as household, homewares, pet care and health and beauty. Some of the Group’s competitors, particularly supermarkets and certain specialist retailers, may have greater market presence, name recognition, financial resources, supply chains, distribution, economies of scale and/or lower cost bases than the Group and may be able to respond more swiftly to changes in market conditions, any of which could give them a competitive advantage over the Group. In particular, some of the Group’s competitors have an online transactional presence or may seek to establish one, which would increase competition, if there is an increase in the number of consumers that shop online for the products that make up the Group’s product offering. In addition, like many other retailers, the Group does not have exclusive rights to many of the elements that comprise its in-store experience and product offering. As a result, the Group’s competitors may seek to improve on their business strategy by copying elements of the Group’s strategy, which could significantly harm the Group’s competitive advantage.

Actions taken by the Group’s competitors, as well as actions taken by it to maintain its competitiveness and reputation may place pressure on its pricing strategy, margins and profitability. The Group’s competitors also may merge or form strategic partnerships, thus achieving economies of scale in buying, distribution and logistics, which could cause additional competitive pressure for the Group. There can be no assurance that the Group will be able to respond adequately to these multiple sources and forms of competition, whether from existing competitors or new market entrants. As a result of the above, or as a result of increasing competitive pressure due to factors beyond the Group’s control, its business, results of operations, financial condition or prospects could be materially adversely affected.

The Group’s business could suffer as a result of weak sales during peak selling seasons, or extreme or unseasonal weather conditions. The Group’s business is subject to seasonal peaks. Traditionally, the most important trading period for the UK business in terms of sales, operating results and cash flow has been the Christmas season, with 32.2% of sales generated in the third quarter for the year ended 29 March 2014. B&M also has seasonal peaks associated with other annual events, such as Easter, Halloween and the summer gardening season. The Group incurs additional expenses in advance of these peak selling seasons in anticipation of higher sales during these periods, including the cost of additional inventory and, in the case of the Christmas season, hiring additional employees. In previous years, the Group’s investment in working capital has peaked around October and fallen significantly after Christmas.

If sales during the Group’s peak trading seasons prove to be significantly lower than it expects for any reason, it may be unable to adjust its expenses in a timely fashion and may be left with a substantial amount of unsold inventory, especially in seasonal merchandise that is difficult to liquidate. In that event, the Group may be forced to rely on markdowns or promotional sales to dispose of excess inventory, which may not offset additional inventory and wage costs, and could have a material adverse effect on its business, results of operations, financial condition, or prospects.

The Group’s sales are also sensitive to periods of extreme weather conditions. The Group may see a reduction of sales during periods of inclement weather due to reduced customer footfall. The number of customers visiting the Group’s stores may also decline during periods of snow or extreme weather conditions affecting the relevant local catchment area. Prolonged unseasonal weather conditions, temporary severe weather during the Group’s peak trading seasons, could have a material adverse effect on the Group’s business, results of operations, financial condition, or prospects.

16 The Group’s business and competitive position is subject to risks associated with its leasehold property portfolio. All of the Group’s stores, distribution centres (with the exception of the JA Woll Group’s primary distribution centre in Soltau, Germany) and headquarters are held through leasehold interests, which are generally subject to periodic rent review, lease expiry and renegotiation. As a result, the Group is susceptible to changes in the property rental market, such as increases in market rents. The Group has benefitted from the increase in high street and out-of-town vacancy rates since August 2008 by being able to lease new stores on attractive terms, as well as benefitting from favourable rent reviews, as evidenced by the Group’s store rent costs as a percentage of revenue. For the year ended 29 March 2014, the Group’s store rent costs were 4.1% of revenue and variable warehouse costs were 1.5% of revenue. However, as most rent reviews occur every five years, it may be affected in the future by changes in the commercial property rental market, such as a decrease in available sites or increases in market rents for both new stores, and scheduled rent reviews. In addition, the Group may not be able to renew its existing store leases where, for example, the landlord is able to establish statutory grounds for non- renewal or if the leases do not have the benefit of statutory or contractual rights of renewal. As of 29 March 2014, the Group leased 25 stores out of its 373 stores in the UK under leases under which it did not have the benefit of a right of renewal. Any inability to renew existing leases may result in, among other things, significant alterations to rental terms (including increasing rental rates), the closure of stores in desirable locations increased costs to fit out replacement locations or failure to secure a relocation in attractive locations. The manifestation of any of these risks could have a material adverse effect on the Group’s business, results of operations, financial condition, or prospects.

In addition, in line with the Group’s growth strategy of continuing to open new stores rapidly, its ability to obtain appropriate real estate for both new stores and any new distribution centre depends upon the availability of sites that meet its criteria, its ability to negotiate terms that meet its financial targets and its ability to obtain planning consent for the use of its stores on satisfactory terms with the local planning authorities or, in the case of leasehold assignments, superior landlord consent. In addition, in modernising or refurbishing its existing stores the Group may require consents from its landlords or local authorities. If any such works are carried out, or have been carried out, without such consents, disputes may arise which may result in the Group having to undertake reinstatement works or face liability for dilapidations, or the landlord may seek forfeiture of the relevant lease. Furthermore, in the event of a significant reduction in the profitability of some or all of its stores, the Group’s ability to reduce its costs through the negotiation of lease terminations or modifications on acceptable terms or at all may be limited. To the extent the Group remains obligated under leases for unprofitable or vacant stores, or to the extent that the termination or modification of leases results in significant costs, the Group’s ability to manage its costs and margins will be impacted and its business, results of operations, financial condition, or prospects may be adversely affected.

The Group may not be able to predict accurately or fulfil customer preferences or demand and manage its inventory efficiently. The Group derives revenue from the sale of products that are subject to changing customer demand. As a multi- category discount retailer, the Group’s success depends, in part, on its ability to predict and respond to changing customer demands and preferences, and to translate market trends into appropriate, saleable merchandise offerings and appropriate levels of inventory. The Group must maintain sufficient inventory levels to meet its customers’ demands without allowing those levels to increase to an extent such that the costs to store and hold the goods unduly impacts its financial condition. If the Group is unable to identify and source products at prices that customers find attractive, the Group’s business, results of operations, financial condition, or prospects may be materially adversely affected.

In the year ended 29 March 2014, approximately 26% of the Group’s products in B&M stores (by cost of sales) were manufactured in the Far East, principally China. The Group typically enters into contracts for the purchase and manufacture of merchandise from suppliers in the Far East with lead times (including shipping) that vary from 30 to 90 days. There can be no assurance that the Group’s orders will match actual demand. If the Group is unable to predict or respond to sales demand or to changing trends successfully, its sales will be lower and it may be forced to rely on additional markdowns or promotional sales to dispose of excess or slow-moving inventory or it may experience inventory shortfalls on popular merchandise, any of which could have a material adverse effect on its business, results of operations, financial condition, or prospects.

17 The Group’s profitability may be negatively affected by its inability to manage inventory effectively. Efficient inventory management is a key component of the Group’s success and profitability. To be successful, the Group must maintain sufficient inventory levels to meet its customers’ demands without allowing those levels to increase to such an extent that the costs to the store to hold the inventory adversely impacts its financial results. Conversely, the Group also cannot allow those levels to decrease to such an extent that shortages in inventory unduly impacts its financial results, which for example it experienced in connection with the commencement of operations at its first distribution centre in Speke, in late 2010. If the Group’s buying decisions do not accurately predict customer trends or purchasing actions, the Group may have to take unanticipated markdowns to dispose of the excess inventory, which could adversely impact its financial results. If the Group is not successful in managing its inventory balances, its cash flows from operations may be negatively affected. In addition, the Group is subject to the risk of inventory loss and theft. The Group has experienced inventory shrinkage in the past, and while this has been stable and under 0.9% of revenues for the last three years, there can be no assurance that incidences of inventory loss and theft will not increase in the future or that the measures the Group is taking will effectively decrease inventory shrinkage. If the Group were to experience higher rates of inventory shrinkage or incur increased security costs to combat inventory theft, the Group’s business, results of operations, financial condition, or prospects could be adversely affected.

Interruptions in the availability or flow of stock, or changes in price from domestic and foreign suppliers from whom the Group’s products are sourced could have a material adverse effect on the Group’s business, results of operations, financial condition, or prospects. The Group sells products that are sourced from a wide variety of domestic and international suppliers. For the Group’s UK business, its largest supplier, Multi-Lines, a Hong Kong sourcing operation in which the Group owns a 50% interest alongside its Hong Kong management, accounted for approximately 5.8% of purchases (by cost of sales) in the year ended 29 March 2014. Its top five, 10, 20 and 30 suppliers (excluding Multi-Lines) accounted for 10%, 17%, 26% and 31%, respectively, of the total cost of sales in the same period. Nevertheless, if a key supplier fails to deliver on key commitments, the Group could experience merchandise shortages, which could lead to lost sales. In addition, the Group may not be able to identify and develop relationships with qualified suppliers who can satisfy its standards for price, quality, safety standards, quantity and other requirements. Although the Group has long-term relationships with many of its suppliers, merchandise is generally sourced on a purchase-order basis for a two to three month supply of a product, rather than pursuant to a long-term supply arrangement. The Group has no legal assurance that any of these relationships will continue, or continue at the same price, and its sales and inventory levels could suffer if it is unable to promptly replace a supplier who is unwilling or unable to satisfy its price, quality, safety standards or quantity and other requirements. The loss of, or substantial decrease in the availability of, products from its suppliers, or the loss of a key supplier, could lead to lost sales or increased costs. In the year ended 29 March 2014, approximately 26% of the Group’s products in B&M stores (by cost of sales) were manufactured in the Far East, principally China, in the year ended 29 March 2014. Many of the Group’s domestic suppliers also import their products or components of their products. Political and economic instability in the countries in which foreign suppliers or manufacturers are located, the financial instability of suppliers, suppliers’ failure to meet the Group’s standards, issues with labour practices of its suppliers or labour problems they may experience (such as strikes), the availability and cost of raw materials to suppliers, merchandise quality or safety issues, transport availability and cost, inflation, and other factors relating to the suppliers and the countries in which they are located or from which they import are beyond the Group’s control and could have negative implications for the Group. Disruptions due to labour stoppages, strikes or slowdowns, or other disruptions involving the Group’s suppliers or the shipping, transportation and handling industries also may affect its ability to receive merchandise in a timely manner and thus may negatively affect the Group’s sales and profitability. The Group may in the future experience product shortages, due to any or all of the factors described above, which could have a material adverse effect on the Group’s business, results of operations, financial condition, or prospects.

The Group is subject to product liability claims, including claims concerning food and prepared food products. The Group may be subject to product liability claims with respect to the sale of food and other products that are recalled, defective or otherwise alleged to be harmful. Injuries may result from tampering by unauthorised third parties, product contamination or spoilage, including the presence of foreign objects, substances, chemicals, other agents, or residues introduced during the growing, storage, handling and transportation phases. While the Directors believe that the Group’s products comply in all material respects with all applicable laws and

18 regulations, it cannot be sure that consumption or use of products sold will not cause a health-related illness in the future or that the Group will not be subject to claims or lawsuits relating to such matters. Although the Group generally seeks contractual indemnification and insurance coverage from its suppliers and carries product liability insurance, it may not have adequate contractual indemnification and/or insurance available, which in certain cases may require the Group to respond to claims or complaints from customers as if it were the manufacturer. Even if a product liability claim is unsuccessful or is not fully pursued and covered with adequate insurance and indemnification, the negative publicity surrounding such claims could adversely affect its reputation with existing and potential customers.

Complaints and litigation could damage the Group’s brand and reputation and divert management resources. From time to time, the Group may be the subject of complaints and litigation from its customers, employees, suppliers and other third parties, alleging product, injury, health, environmental, safety, data protection, or operational concerns, nuisance, negligence or failure to comply with applicable laws and regulations. Any such complaints and claims could cost the Group and even if successfully resolved without direct adverse financial effect, could have a material adverse effect on the Group’s brand and reputation and divert its financial and management resources from more beneficial uses. If the Group were to be found liable under any such complaints and claims, the Group’s business, results of operations, financial condition, or prospects could be materially adversely affected.

Any events that negatively impact the reputation of, or value associated with the B&M, JAWOLL and HAFU brands could adversely affect the Group’s business. The B&M, JAWOLL and HAFU brands are important assets of the Group’s business. Maintaining the reputation of and value associated with the B&M, JAWOLL and HAFU brands is central to the success of its business and the Group could be adversely affected if customers lose confidence in the safety and quality of the products sold or provided by the Group. For third-party brands, the Group is dependent on its suppliers’ investment in their own marketing and promoting their brands in order for customers to purchase their products rather than those of the suppliers’ competitors. The Group also depends on its suppliers to comply with applicable employment, environmental and other laws and standards so as not to negatively impact the B&M, JAWOLL and HAFU name. However, there can be no assurance that suppliers are or will remain in compliance with such laws.

The Group’s UK business has also expanded its own range of private label items, which amounted to approximately 96 brands as at 29 March 2014, and which are important for future growth prospects as private label items offer an important means of competitor differentiation and also generally offer more attractive margins. These private label items are principally manufactured in China, and while the Group’s policies set out standards for ethical business practices, it does not control these manufacturers or their labour or other business practices. Maintaining broad market acceptance of its private label items depends on many factors, including pricing, costs, quality and customer perception, and the Group may not achieve or maintain expected sales for its private label items.

In light of the increased public focus on employment, health and safety and environmental matters, a violation, or allegations of a violation of such laws or regulations, or a failure to achieve particular standards by any of the Group’s suppliers or manufacturers, could lead to unfavourable publicity and a decline in public demand for the Group’s products, or require the Group to incur expenditure or make changes to its supply chain and other business arrangements to ensure compliance. Any such events concerning the Group, or any of the manufacturers or suppliers that supply products to it could create substantial erosion in the reputation of, or value associated with, the B&M, JAWOLL and HAFU brands and could result in a material adverse effect on the Group’s business, results of operations, financial condition, or prospects.

The efficient operation of the Group’s business is dependent on its information technology, network and communications systems. The Group depends on its key operational business systems for the efficient functioning of its business. In particular, the Group relies on its information technology, network and communications systems to effectively manage its sales, warehousing, distribution, merchandise planning and replenishment functions and to maintain its in-stock positions and a record of its results of operations and financial position. Any failure or significant disruption to these information technology, network or communications systems could have an adverse effect on the proper functioning of the Group’s businesses, both at the point of sale, with regard to store replenishment and distribution activities and on the Group’s ability to maintain its financial records and produce timely financial

19 information to enable it to manage its operations. Notwithstanding efforts to prevent an information technology, network or communications system failure or disruption, the Group’s systems may be vulnerable to damage or interruption from fire, telecommunications failures, floods, physical or electronic break-ins, computer viruses or hacking, power outages and other malfunctions or disruptions. There can be no certainty that the Group’s disaster recovery and contingency plans will be effective or sufficient in the event that they need to be activated. As the Group expands its operations the Group may make further investments in its information technology and related systems. There can be no assurance that the Group will be able to upgrade or install technology in a timely manner, train its employees effectively in the use of its technology or obtain the anticipated benefits of its technology. Any of the foregoing could have a material adverse effect on the Group’s business, results of operations, financial condition, or prospects.

The Group is dependent upon senior management and other skilled personnel and the inability to attract and retain such management or personnel could adversely affect its business. The Group is highly dependent upon key senior management personnel who have extensive experience and knowledge of the UK and German general merchandise discount retail industry. The successful implementation of the Group’s strategy depends on the continuing availability of senior management and the Group’s ability to continue to attract, motivate and retain other highly qualified employees. If members of the Group’s senior management depart, the Group may not be able to find effective replacements in a timely manner, or at all, and the Group’s business may be disrupted or damaged. In addition, the loss of key members of senior management to competitors could have a material adverse effect on the Group’s competitive position within the European general merchandise discount retail industry.

The Group also faces the challenge of attracting, developing and retaining the right calibre of staff for its stores and distribution centres while controlling its labour costs. The turnover rate in the retail and distribution industry is relatively high, and individuals of the required quality to fill positions may be in short supply in some areas. The Group’s ability to support its strategy may be limited by its ability to employ, train, motivate and retain sufficient skilled personnel to staff each store, in particular store managers. There can be no assurance that any of these key personnel will continue to be employed by the Group or that it will be able to attract and retain qualified personnel in the future. The Group’s ability to meet its labour needs, while controlling its labour costs, is subject to many external factors, including competition for and availability of qualified personnel in a given market, unemployment levels within those markets, prevailing wage rates, minimum wage laws, health and other insurance costs, union membership levels and activity among its employees and changes in employment and labour laws or other workplace regulation. The failure to recruit and retain key senior management and other skilled or semi-skilled personnel could adversely impact the Group’s sales performance, increase its wage costs, and adversely affect the Group’s business, results of operations, financial condition, or prospects.

The Group may not realise the anticipated benefits expected to result from the recent acquisition of stores in Germany and is subject to risks associated with the German general merchandise discount retail market. On 30 April 2014, the Group acquired 49 JAWOLL stores in Germany, five of which trade under the “HAFU” fascia. The Group expects to realise operational improvements and purchasing savings in the newly acquired stores through, for example, the rollout of its disciplined merchandising and sourcing experience in the Far East to its acquired stores, and increased leverage in supplier negotiations that arise from having operations in two different countries. However, the Group’s ability to integrate and manage the acquired stores and to handle any future growth will depend upon a number of factors, including the quality of the acquired management, and the resulting complexity of integrating operations. For example, the Group’s relationship with current employees of the acquired business may become impaired. There can be no assurance that the Group’s profitability will be improved by the recent acquisition or that the benefits that the Group anticipates from the acquisition will be realised.

The Group may also become subject to unexpected claims and liabilities arising from the acquisition. These claims and liabilities could be costly to defend, could be material to the Group’s financial position and might exceed either the limitations of any applicable indemnification provisions or the financial resources of the indemnifying parties. Although the Group has investigated the business and conducted due diligence prior to the acquisition and obtained representations and warranties as to its assets and liabilities, there can be no assurance that the Group was able to accurately assess ongoing profitability or identified all actual or potential liabilities of the business prior to its acquisition. If the Group acquired a business or assets which results in assuming liabilities not reasonably foreseeable in respect of which it has not obtained contractual protections or for which protection is not available, this could materially adversely affect its business, results of operations, financial condition, or prospects.

20 In addition, the German general merchandise discount retail market may have different conditions than the UK market. There is a higher penetration of discount retailers in the German retail market, which could create different competitive conditions. Consumer tastes could vary between the UK and Germany and the contributors to the disposable income of German customers which drive spending patterns will depend on German macro- economic conditions. The differences between the UK and German general merchandise discount retail market may cause these acquired stores to fail to achieve sales and profit targets.

Failure to protect customer and employee confidential information could significantly impact the Group’s reputation and expose the Group to litigation. The Group must comply with restrictions on the use of customer and employee data and ensure that confidential information (including credit or debit card numbers) is transmitted in a secure manner over public networks. While the Directors believe they have taken reasonable and appropriate steps to protect such information from security breaches, data loss and computer viruses, if the Group’s security procedures and controls were compromised, unintentionally or through cyber-attacks, the Group’s reputation, business, results of operations, financial condition, or prospects could be materially adversely affected and could result in litigation and/or higher expenditure to adequately protect the Group against such information security breaches.

The Group’s business may be materially adversely affected by changes to governmental regulations that could require it to modify its current business practices, incur increased costs and subject it to potential liabilities. The Group’s business operations are affected by various statutes, regulations and laws applicable to businesses generally, including but not limited to, laws affecting advertising, consumer protection, product safety, quality and liability, health and safety, environmental, fire, planning, landlord tenant, competition, tax, data protection, employment practices (including pensions) and other laws and regulations which apply to retailers generally and/ or govern the import, promotion and sale of products and the operation of retail stores and distribution centres. If any of these statutes, laws or regulations were to change or the Group’s management, employees or suppliers were to fail to comply with them, the Group may be required to implement extensive system and operating changes, and as a result, could experience delays in shipments of its goods, be subject to fines or penalties, or suffer reputational harm, which could reduce demand for its products and damage its business, results of operations, financial condition, or prospects.

For example, the Group is mostly dependent on hourly employees at the store level, whose pay for those in the UK is subject to the UK national minimum wage. The statutory minimum wage for adults increased from £6.19 per hour to £6.31 per hour outside London in October 2013. In October 2012 and October 2011, it increased by approximately 1.8% and approximately 2.5%. In response to the Low Pay Commission’s 2014 report, the UK government has announced that it will raise the statutory minimum wage for adults to £6.50 per hour in October 2014. Any further increase to the minimum wage could cause the Group to incur additional employment costs, which could adversely affect the Group’s profitability. In addition, under other employment- related laws, such as the UK National Insurance Contributions and Statutory Payments Act 2004, employers must contribute National Insurance payments on behalf of each employee earning above a designated threshold. An increase in employers’ mandatory National Insurance contributions would increase the amount the Group is required to contribute on behalf of its employees. These risks in relation to the regulatory environment apply in each of the countries in which the Group operates.

Legal requirements are subject to frequent changes and differing interpretations, and the Group is unable to predict the ultimate cost of compliance with these requirements or their effect on its operations, within any of the territories in which it operates. The Group may be required to make significant expenditures or modify its business practices in order to comply with amendments to existing laws and regulations and/or with future laws and regulations, which may increase its costs and limit its ability to operate its business. Furthermore, changes in tax laws, the interpretation of existing laws, or the Group’s failure to sustain its reporting positions on examination could adversely affect its effective tax rate, which could impact its results of operations or financial condition.

Natural disasters, pandemic outbreaks, terrorist acts, global political events and other unforeseen circumstances could decrease customer traffic, cause permanent or temporary store closures, or impair the Group’s ability to purchase, receive or replenish inventory, any of which could result in lost revenue and otherwise materially and adversely affect the Group’s business, results of operations, financial condition, or prospects. The occurrence of one or more natural disasters, such as floods, pandemic outbreaks, weather conditions, such as major or extended winter storms, terrorist acts or disruptive global political events, in the UK and Germany or in countries in which the Group’s suppliers are located, or other disruptions, could materially and adversely affect

21 the Group’s business, results of operations, financial condition, or prospects. Such events could result in physical damage to, or the complete loss of, one or more of the Group’s properties, the closure of one or more of the Group’s stores and distribution centres, the lack of an adequate work force in a given market, the inability of customers and the Group’s employees to reach or have transportation to the Group’s stores directly affected by such events, the evacuation of the populace from areas in which the Group’s stores are located, changes in the purchasing patterns of consumers and in consumers’ disposable income, the temporary or long-term disruption in the Group’s supply chain, the reduction in the availability of certain products in the Group’s stores, the disruption of utility services to the Group’s stores and distribution centres, and disruption in the Group’s communications with its stores. In addition, these events can have indirect consequences such as increases in the cost of insurance if they result in significant loss of, or damage to property or other insurable damage. Such activities may cause disruption, adversely affect our operations in the areas in which these events occur and/or a reduction of customer footfall at the Group’s stores and could therefore adversely affect the Group’s business, results of operations, financial condition, or prospects.

The loss of important intellectual property rights, including the Group’s key trademarks and domain names as well as third party claims that the Group has infringed on their intellectual property rights could significantly harm the Group’s business, results of operations, financial condition, or prospects, and defending intellectual property claims may be expensive and could divert valuable company resources. As of 29 March 2014, the Group’s portfolio of UK intellectual property rights consists of two registered trademarks relating to the B&M brand and 90 registered design rights relating to the Group’s private label products. The Group’s key trademarks are important to the Group’s business. While the Group relies on a combination of trademark and copyright laws, database protections and contractual arrangements, where appropriate, to establish and protect the Group’s intellectual property rights, third parties may in the future try to challenge the ownership of and/or validity of the Group’s intellectual property. The Group may not always be successful in securing protection for or stopping infringements of its intellectual property rights. The Group may need to resort to litigation in the future to enforce its intellectual property rights. Any such litigation could result in substantial costs and a diversion of resources. The Group’s failure to protect and enforce its intellectual property rights could have a material adverse effect on the Group’s business, results of operations, financial condition, or prospects.

It is also possible that the Group may not adequately identify third party intellectual property rights or assess the scope and validity of these third party rights, which may lead to claims that the Group has infringed or be alleged to have infringed intellectual property rights owned by third parties, who may challenge the Group’s right to continue to sell certain products and/or may seek damages from the Group. Any such claims or lawsuits, whether proven to be with or without merit, could be expensive and time consuming to defend and could cause the Group to cease offering products that incorporate the challenged intellectual property, which could divert the attention and resources of the Group’s management. The Group cannot provide any assurance that it will prevail in any litigation related to infringement claims against the Group. A successful claim of infringement against the Group could result in the Group being required to pay significant damages, cease the sale of certain products that incorporate the challenged intellectual property or obtain licenses from the holders of such intellectual property which may not be available on commercially reasonable terms, any of which could materially adversely affect the Group’s business, results of operations, financial condition, or prospects.

Inability to obtain commercial insurance at acceptable prices may have a negative impact on the Group’s business. The Directors believe that its commercial insurance coverage is appropriate for risk management purposes. Although the Group has historically been able to obtain insurance coverage that it believes is appropriate, it is possible that insurance costs may increase substantially in the future or that the availability of insurance coverage for certain risks may be withdrawn completely or increase significantly in cost. In these circumstances, the Group may be unwilling or unable to obtain commercial insurance either at acceptable prices or at all and, as such, may have to forego or limit its purchase of relevant commercial insurance. In addition, although commercial insurance may be obtained by the Group, not all losses may be covered by the relevant policies and the terms of the policies may exclude the Group from recovering for losses in certain circumstances, including as a result of customary deductibles and exclusions. The Group is not insured against terrorist acts and war related events, radioactive contamination, and electronic risks, including cyber-attacks. In addition, the Group also self-insures stock at its stores (unlike stock at its distribution centres which is insured under a third party insurance policy). If the Group were unwilling or unable to obtain suitable commercial insurance, or to claim for certain losses under its commercial insurance policies, it could be forced to bear the losses of uninsured events and this could have a material adverse effect on its business, results of operations, financial condition, or prospects.

22 Any future acquisitions could consume significant resources and management attention. From time to time, the Group evaluates acquisition opportunities and may acquire or make significant investments in complementary businesses in the UK or elsewhere. The Group has, for example, acquired portfolios of retail leases or other retail businesses on a number of occasions in the last several years that together account for 106 of its 373 stores as at 29 March 2014. In addition it made its recent acquisition of the JA Woll Group in Germany. There can be no assurance that any such future investment or acquisition will be successful. The success of any future acquisition will depend on senior management’s ability to identify, negotiate and complete such acquisitions and integrate such businesses or properties. Failure to manage and successfully integrate acquired businesses or properties could harm the Group’s business. Acquisitions involve numerous risks, including difficulties and costs associated with integrating the operations and staff of the acquired businesses; employee related liabilities that are transferred under an acquisition; the diversion of management’s attention away from the normal daily operations of the business and the implementation of the Group’s strategy; insufficient additional revenue to offset increased expenses associated with acquisitions and the potential loss of key employees of the acquired businesses, the occurrence of one or more of which could have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

The Group’s level of indebtedness could have significant adverse consequences. The Group’s level of indebtedness could have significant adverse consequences for the Group, including: • increasing the Group’s vulnerability to general economic and industry conditions, because debt payment obligations may limit the Group’s ability to use its cash to respond to changes in its industry or the wider economy; • limiting the Group’s ability to obtain additional financing for its growth strategy, working capital, capital expenditure, debt service requirements, acquisitions and general corporate or other purposes in the longer term; • imposing constraints on the Group’s long-term business operations and growth plans as a result of the need for the Group to take account of the covenants in its debt financing agreements when executing those long- term business operations and growth plans; and • placing the Group at a disadvantage compared to its competitors who are less indebted and may be better able to use their cash flows to fund competitive responses to changing industry, market or economic conditions.

Currency fluctuations and hedging risks could materially adversely affect the Group’s results of operations. The Group is subject to certain transactional currency exposures, principally to the U.S. dollar and the euro, as a result of purchases by the Group of non-grocery stock such as furniture and toys from Far East which are denominated in U.S. dollars and the sales in the Group’s stores in Germany which are denominated in euro. The Group’s sales are primarily denominated in pounds sterling and the Group reports its consolidated financial results in pounds sterling. The exchange rates between U.S. dollars and pounds sterling and between euro and pounds sterling have fluctuated in recent years and may fluctuate significantly in the future. The Group could be adversely affected by future unfavourable shifts in currency exchange rates, particularly by a strengthening of the U.S. dollar compared to the pound sterling. Although it is the Group’s policy to manage its currency exposures as it considers appropriate, through the use of hedging instruments such as forward foreign exchange contracts, there can be no assurance that such hedging arrangements will be effective or that all of the Group’s currency exposure will be hedged.

The Group is exposed to fluctuations in interest rates. On 21 May 2014, B&M European Value Retail Holdco 4 Limited (“B&M Holdco 4”) and certain other members of the Group entered into the £590 million new facilities (the “New Facilities”), comprising a non- amortising £300 million senior term loan A facility (the “New TLA Facility”) (which is scheduled to mature five years after Admission), a non-amortising £140 million senior term loan B facility (the “New TLB Facility”) (which is scheduled to mature six years after Admission) and a £150 million revolving credit facility (the “New RCF”) (which is scheduled to mature five years after Admission), all of which will bear interest at a variable rate linked to the sterling London Interbank Offered Rate (“LIBOR”), and the Group is therefore exposed to movements in interest rates. As part of the Refinancing, the Group will continue to benefit from interest rate swaps with respect to some of the indebtedness under which the Group will pay a fixed rate of interest. In addition, interest rate fluctuations affect the return on the Group’s cash and other short-term investments. There

23 can be no guarantee that future interest rate fluctuations will be effectively hedged by the Group’s use of interest rate swaps or other hedging instruments to manage interest rate exposure on its borrowings. Furthermore, such hedging instruments may result in the Group paying higher interest rates than the prevailing variable interest rates from time to time. Movements in interest rates could have a material adverse effect on any unhedged borrowing exposure or on the returns generated by Group’s investments, either of which could adversely affect the Group’s business, results of operations, financial condition, or prospects.

The Group’s business may be affected by the default of counterparties in respect of monies and products owed to it The Group’s exposure to credit risk on liquid funds, products, investments and derivative financial instruments arises from the risk of default of counterparties. The Group typically pays a deposit to overseas suppliers varying from 10% to 30% of the total order value to import goods when orders are placed. It is the Group’s policy to limit counterparty exposures. However, there can be no assurance that the Group’s policy to limit counterparty exposures will effectively mitigate such exposures, and any such counterparty default may have a material adverse effect on the Group’s business, results of operations, financial condition, or prospects.

The Group will incur new costs in its transition to a public company and its management will be required to devote substantial time to new compliance matters. As a newly public company, the Group will incur significant legal, accounting and other expenses, including the costs of recruiting and retaining non-executive directors, costs resulting from public company reporting obligations and the rules and regulations regarding corporate governance practices, including the listing requirements of the London Stock Exchange. There can be no assurance that, under a changed Board structure and ownership, and in an environment where it is subject to greater scrutiny and disclosure requirements, the Group will be able to manage its operations in the same manner as it has done as a private business under private ownership. In particular, the Group will be subject to increased regulatory obligations as a result of being listed and management will need to devote a substantial amount of time to ensure that the Group complies will all of these requirements. In addition, the reporting requirements, rules and regulations will increase the Group’s legal and financial compliance costs and make some activities more time-consuming and costly.

Risks related to the Global Offer and the Shares There is no existing market for the Shares and the Company does not know if one will develop, which could impede your ability to sell your Shares and depress the market price of its Shares. Prior to the Global Offer, there has been no public trading market for the Shares. The Company has applied to the UKLA for the admission of the Shares to the premium listing segment of the Official List of the FCA. However, the Company cannot assure you that an active trading market will develop or be sustained or how liquid that market might become for its Shares after the Global Offer, nor can it predict the prices at which its Shares will trade after the Global Offer. If an active trading market does not develop, you may have difficulty selling any of the Shares that you buy. The Offer Price for the Shares has been determined by negotiations between the Company, the Selling Shareholders and the Joint Global Co-ordinators and may not be indicative of prices that will prevail in the open market following the Global Offer. Consequently, investors may not be able to sell the Shares at prices equal to or greater than the price they paid in the Global Offer.

The price of the Shares may fluctuate significantly and you could lose all or part of your investment. The value of an investment in the Shares may decrease or increase abruptly, and such volatility may bear little or no relation to the Group’s performance. The price of the Shares may fall in response to market appraisal of the Group’s strategy or if the Group’s results of operations and/or prospects are below the expectations of market analysts or shareholders. In addition, stock markets have, from time to time, experienced significant price and volume fluctuations that have affected the market price of securities, and may, in the future, experience similar fluctuations which may be unrelated to the Group’s operating performance and prospects but nevertheless affect the price of the Shares. Other factors which may affect the price of the Shares include but are not limited to: • differences between the Group’s expected and actual operating performance; • cyclical fluctuations in the performance of the Group’s business; • speculation, whether or not well founded, regarding the intentions of the Group’s major holders of Shares (“Shareholders”) or significant sales of shares by any such Shareholders or short selling of the Shares; • speculation, whether or not well founded, about significant issues of shares by the Group;

24 • speculation, whether or not founded, regarding possible changes in the Group’s management team; • the publication of research reports by analysts; • strategic actions by the Group or its competitors, such as mergers, acquisitions, divestitures, partnerships and restructurings; • adverse resolution of new or pending litigation against any member of the Group; • speculation, whether or not well founded, about the Group’s business, about mergers or acquisitions involving the Group and/or major divestments by the Group in the press, media or investment community; and • general economic, industry, stock market conditions and regulatory changes.

U.S. withholding tax could apply to a portion of certain payments on the Shares. The U.S. has enacted rules, commonly referred to as “FATCA” (the Foreign Account Tax Compliance Act, as amended) that generally impose a new reporting and withholding regime with respect to certain U.S. source payments (including dividends and interest), gross proceeds from the disposition of property that can produce U.S. source interest and dividends and certain payments made by entities that are classified as financial institutions under FATCA. The governments of Luxembourg and the U.S. have entered into an agreement with respect to the implementation of FATCA. Under this agreement, the Company does not expect to be subject to withholding under FATCA on any payments it receives. Similarly, as the agreement is currently drafted, the Company does not expect to withhold under FATCA on payments with respect to the Shares. However, significant aspects of whether or how FATCA will apply to non-U.S. issuers like the Company remain unclear, and no assurance can be given that withholding under FATCA will not become relevant with respect to payments on the Shares in the future. Even if FATCA were to become relevant to payments on the Shares, it would not be applicable earlier than 1 January 2017. Prospective investors should consult their own tax advisors regarding the potential impact of FATCA, including the agreement relating to FATCA between the governments of Luxembourg and the U.S., to an investment in the Shares.

Exchange rate fluctuations may impact on the price of Shares. The Shares will be quoted, and any dividends to be paid in respect of them will be, in pounds sterling. An investment in Shares by an investor in a jurisdiction whose principal currency is not pounds sterling exposes the investor to foreign currency rate risk. Any depreciation of the pound sterling in relation to such foreign currency will reduce the value of the investment in the Shares or any dividends in foreign currency terms.

Following Admission, certain Shareholders will continue to be able to exercise substantial influence over the Group’s business. As at the date of this document (assuming the Reorganisation has been completed in full), the CD&R Investors (as defined in Part 11: Definitions) and Simon Arora, Bobby Arora and Robin Arora, hold, in aggregate, directly or indirectly, 52.3%, 19.1%, 19.1% and 9.4%, respectively, of the voting rights in respect of B&M European Value Retail 1’s issued share capital. Immediately following the Global Offer, the CD&R Investors, Simon Arora, Bobby Arora and Robin Arora will hold, in aggregate, directly or indirectly, approximately 31.4%, 14.0%, 14.0% and 0.7%, respectively, of the voting rights in respect of the Company’s enlarged issued share capital assuming no exercise of the Over-allotment Option (or 29.0%, 13.5% and 13.5% and 0.0%, respectively of the voting rights if the Over-allotment Option is exercised in full). As a result of their shareholding in the Company, the CD&R Investors, Simon Arora, Bobby Arora and Robin Arora will be able to exercise significant influence over the Company’s management and operations and over the Shareholders’ meetings, such as in relation to the payment of dividends. Each of CD&R Holdco and Simon Arora, Bobby Arora, Robin Arora and SSA Holdco (together, the “Arora Family”) have entered into Relationship Agreements (as defined in paragraph 21.1 of Part 10: Additional Information) with the Company to govern their relationship with the Company after Admission and each will have certain rights in respect of the Company under such Relationship Agreements, including, among others, the right for CD&R Holdco, the entity through which the interests of the CD&R Investors are held, to appoint up to two Non- Executive Directors to the Board depending on the level of its holding of Shares and the right for the Arora Family to appoint one Director to the Board. For more information on the Relationship Agreements, see paragraph 21.1 of Part 10: Additional Information. The CD&R Investors may invest in businesses that compete with the Company. In addition, certain members of the Arora Family hold indirect interests in the freehold of sites where certain stores, the second distribution centre in Speke that commenced operations in February 2014 (“Speke 2”) and the vehicle maintenance area next to Speke 1 are located. In addition, it is expected that certain members of the Arora Family will hold directly or indirectly, further interests in the freehold of sites where the Group has or will have operations

25 such as an additional distribution centre in Southern England. There can be no assurance that the interests of the CD&R Investors, Simon Arora, Bobby Arora or Robin Arora will coincide with the interests of purchasers of the Shares or that the CD&R Investors, Simon Arora, Bobby Arora or Robin Arora will act in a manner that is in the best interests of the Company.

Substantial future sales of Shares, or the perception of such sales, could impact the market price of Shares. Upon completion of the Global Offer, the CD&R Investors, Simon Arora, Bobby Arora and Robin Arora will hold, in aggregate, directly or indirectly, 31.4%, 14.0%, 14.0% and 0.7%, respectively, of the issued Shares (29.0%, 13.5%, 13.5% and 0.0%, respectively, if the Over-allotment Option is exercised in full). The Company cannot predict what effect, if any, future sales of Shares, or the availability of Shares for future sale, will have on the market price of Shares. Sales of substantial numbers of Shares in the public market following the Global Offer, or the perception or any announcement that such sales could occur, following the expiry of any lock-up arrangements, could adversely affect the market price of the Shares and may make it more difficult for investors to sell their Shares at a time and price which they deem appropriate. Such sales may also make it more difficult for the Company to issue equity securities in the future at a time and at a price that it deems appropriate.

During the periods immediately prior to and following the end of the periods of sales restriction provided for by these lock-up arrangements, the market price of the Shares may fall in anticipation of a sale of Shares. Following the expiry of these arrangements, there will be no contractual restriction on the sale of the Shares owned by the Shareholders who were previously subject to them. The Group cannot predict whether a substantial number of Shares in addition to those which will be available in the Global Offer will be sold in the open market following the expiry or waiver of these restrictions. In particular, there can be no assurance that after the restrictions expire, or prior to such time if any such restrictions are waived, such Shareholders will not reduce their holdings of ordinary shares.

For further information relating to these lock-up arrangements, see paragraph 17 of Part 10: Additional Information.

The issue of additional Shares in the Company in connection with future acquisitions, any share incentive or share option plan or otherwise may dilute all other shareholdings. The Group may seek to raise financing to fund future acquisitions and other growth opportunities. Although the Group is not currently considering any specific acquisition or growth opportunities that would require the Group to issue new Shares, the Group may, for these and other purposes, such as in connection with share incentive and share option plans, issue additional equity or convertible equity securities. As a result, the Company’s existing Shareholders may suffer dilution in their percentage ownership or the price of the Shares may be adversely affected.

If securities analysts do not publish research or reports about the Company, or issue unfavourable commentary about the Company or downgrade the Shares, the price of the Shares could decline. The trading market for the Shares will depend in part on the research and reports that third-party securities analysts publish about the Company and the UK general merchandise discount industry. The Company may be unable or slow to attract research coverage and if one or more analysts cease coverage of the Company, the Company could lose visibility in the market. In addition, one or more of these analysts could use estimation or valuation methods that the Company does not agree with, downgrade the Shares or issue other negative commentary about the Company or the industry. As a result of one or more of these factors, the trading price of the Shares could decline.

The Company’s ability to pay dividends in the future is not guaranteed. The Company’s ability to pay dividends in the future will depend, among other things, on its financial performance and the availability of distributable profits and reserves and cash available for this purpose. As a holding company, the Company’s ability to pay dividends in the future is affected by a number of factors, principally the Company’s ability to receive sufficient dividends from its subsidiaries. The payment of dividends by subsidiaries is, in turn, subject to restrictions, including the existence of sufficient distributable reserves and cash in those subsidiaries as well as restrictions in the Company’s debt financing arrangements. These restrictions could limit or prohibit the payment of dividends to the Company by its subsidiaries, which could restrict the Company’s ability to fund its operations or to pay dividends to Shareholders.

26 Pre emption rights for U.S. and other non-EU holders of Shares may not be available. In the case of certain increases in the Company’s issued share capital, existing holders of Shares are generally entitled to statutory pre-emption rights to subscribe for such shares, unless Shareholders waive such rights by a resolution at a Shareholders’ meeting. U.S. and other non-EU holders of shares are customarily excluded from exercising any such pre-emption rights they may have, unless exemptions from any overseas securities law requirements are available. The Company cannot assure prospective investors that any exemption from such overseas securities law requirements would be available to enable U.S. or other non-EU holders to exercise such pre-emption rights or, if available, that the Company will utilise any such exemption.

There is doubt as to the enforceability in Luxembourg of claims based on the federal securities laws of the United States. The Company is a public limited liability company (société anonyme) incorporated under the laws of Luxembourg. The Directors of the Company, and the Selling Shareholders reside outside the U.S. In addition, a substantial proportion of the assets of the Directors, the Selling Shareholders and the Group are located outside the United States. It may not be possible, therefore, for investors to effect service of process within the United States upon the Company or its Directors or the Selling Shareholders, or to enforce in U.S. courts judgements against them obtained in those courts based upon the civil liability provisions of the federal securities laws of the United States. Furthermore, there is substantial doubt as to the enforceability in Luxembourg, whether by original actions or by seeking to enforce a judgement of a U.S. court, of claims based on the federal securities laws of the United States.

27 GLOBAL OFFER STATISTICS

Offer Price (per Share) ...... 270pence Number of Shares being offered in the Global Offer(1) ...... 400,000,000 Comprising New Shares to be issued by the Company ...... 27,777,778 Comprising Existing Shares to be sold by the Selling Shareholders ...... 372,222,222 Percentage of enlarged issued share capital being offered pursuant to the Global Offer ...... 40.0% Maximum number of Existing Shares subject to the Over-allotment Option(2) ...... 40,000,000 Number of Shares in issue following the Global Offer ...... 1,000,000,000 Market capitalisation of the Company at the Offer Price(3) ...... £2,700 million Estimated net proceeds receivable by the Company, after expenses(4) ...... £50million

(1) Assumes no exercise of the Over-allotment Option. (2) The number of Existing Shares subject to the Over-allotment Option is, in aggregate, equal to 10% of the total number of Shares to be offered for subscription in the Global Offer. (3) The market capitalisation of the Company at any given time will depend upon the market price of the Shares at that time and the number of Shares in issue. There can be no assurance that the market price of the Shares will equal or exceed the Offer Price (and consequently no assurance that the market capitalisation of the Company at any given time will equal or exceed the expected market capitalisation of the Company following the Global Offer). (4) The net proceeds receivable by the Company are stated after deduction of estimated underwriting commissions and other fees and expenses of the Global Offer payable by the Company, which commissions, fees and expenses are expected to be approximately £25 million. The Company will not receive any of the net proceeds from the sale of the Existing Shares in the Global Offer or the sale of Over-allotment Shares pursuant to any exercise of the Over-allotment Option.

28 EXPECTED TIMETABLE FOR THE GLOBAL OFFER

Each of the times and dates is subject to change and in case of an amendment of the times and dates, a notice will be made in accordance with article 16 of the Luxembourg Prospectus Law.

Announcement of Offer Price and allocation ...... 12June 2014 Conditional dealings in Shares commence on the London Stock Exchange(1) ...... 8:00 a.m. on 12 June 2014 Admission and unconditional dealings in Shares commence on the London Stock Exchange ...... 8:00 a.m. on 17 June 2014 CREST accounts to be credited in respect of Depository Interests(2) ...... 8:00 a.m. on 17 June 2014

(1) It should be noted that, if Admission does not occur, all conditional dealings will be of no effect and any such dealings will be at the sole risk of the parties concerned. (2) Or as soon as practicable thereafter. No temporary documents of title will be issued. These will be despatched by post at the applicant's risk.

29 DIRECTORS, DAILY MANAGER, REGISTERED OFFICE AND ADVISERS

Directors Sir Terence (Terry) Patrick Leahy (Chairman) Sundeep (Simon) Arora (Chief Executive Officer) Paul Andrew McDonald (Finance Director) Thomas Martin Hübner (Senior Independent Non-Executive Director) Ronald (Ron) Thomas McMillan (Independent Non-Executive Director) Kathleen Rose Guion (Independent Non-Executive Director) Henricus (Harry) Brouwer (Independent Non-Executive Director) David Andrew Novak (Non-Executive Director)

Daily Manager Emmanuel Forgeot d’Arc

Registered office and 16, Avenue Pasteur principal place of L-2310 business address and Luxembourg telephone number +352 440 929

Joint Global BofA Merrill Lynch Goldman Sachs International Co-ordinators, Joint 2 King Edward Street Peterborough Court Bookrunners and Joint London EC1A 1HQ 133 Fleet Street Sponsors United Kingdom London EC4A 2BB United Kingdom

Joint Bookrunners Credit Suisse Securities (Europe) Limited Deutsche Bank AG, One Cabot Square London Branch London E14 4QJ Winchester House United Kingdom 1 Great Winchester Street London EC2N 2DB United Kingdom

Co-Lead Managers Jefferies International Limited Numis Securities Limited Vintners Place The London Stock Exchange 68 Upper Thames Street Building London 10 Paternoster Square EC4V 3BJ London EC4M 7LT United Kingdom United Kingdom

Financial Adviser Lazard & Co., Limited 50 Stratton Street London W1J 8LL United Kingdom

Legal advisers to the Clifford Chance LLP Clifford Chance Company as to English, 10 Upper Bank Street 10 boulevard G.D. Charlotte US and Luxembourg law London E14 5JJ B.P. 1147 L-1011 United Kingdom Luxembourg

Legal advisers to the Freshfields Bruckhaus Deringer LLP Underwriters as to 65 Fleet Street English and US law London EC4Y 1HS United Kingdom

Legal advisers to the Arendt & Medernach–Avocats Underwriters as to 14, rue Erasme Luxembourg law L-2082 Luxembourg

30 Auditor Grant Thornton Lux Audit S.A. 89A, Pafebruch L-8308 Capellen Luxembourg

Reporting accountant Grant Thornton UK LLP 30 Finsbury Square London EC2P 2YU United Kingdom

Depository Capita IRG Trustees Limited The Registry 34 Beckenham Road Beckenham Kent BR3 4TU United Kingdom

Financial Adviser to the N.M. Rothschild & Sons Limited Arora Family New Court St Swithin’s Lane London EC4N 8AL United Kingdom

Legal advisers to the Allen & Overy LLP Arora Family One Bishops Square London E1 6AD United Kingdom

Legal advisers to CD&R Debevoise & Plimpton LLP Holdco 65 Gresham Street London EC2V 7NQ United Kingdom

31 IMPORTANT INFORMATION

Presentation of Financial Information The Company was recently incorporated and as at the date of this document has no historical operations of its own nor has it been operating in the Group's current sphere of economic activity. Therefore, this document does not present any standalone, unconsolidated financial information for the Company. The Historical Financial Information included in Part 7: Historical Financial Information is the combined Historical Financial Information of B&M European Value Retail 1 as described in note 2 to such Historical Financial Information. Conditional upon and with effect from Admission, B&M European Value Retail 1 will become the direct wholly owned subsidiary of the Company pursuant to the Reorganisation (as defined in paragraph 4.3 of Part 10: Additional Information).

The Historical Financial Information in Part 7: Historical Financial Information has been prepared in accordance with the requirements of the PD Regulation and the Luxembourg Prospectus Law and in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board (“IASB”), as adopted by the European Union (“EU”) (“IFRS”). The basis of preparation is further explained in Part 7: Historical Financial Information. The Group's financial information has been prepared in accordance with IFRS for the years ended 31 March 2012, 30 March 2013 and 29 March 2014. The year ended 31 March 2012 comprises a 53 week period, while the years ended 30 March 2013 and 29 March 2014 comprise 52 week periods. As a result, the financial information for the year ended 31 March 2012 may not be directly comparable with the financial information for the years ended 30 March 2013 and 29 March 2014, and period to period comparisons may be more difficult.

The significant accounting policies applied in the Historical Financial Information of the Group in Part 7: Historical Financial Information have been applied consistently in the Historical Financial Information in this document. IFRS differ in certain significant respects from generally accepted accounting principles in the United States (“US GAAP”). Investors should seek their own advice regarding the differences between IFRS and US GAAP. In making an investment decision, prospective investors must rely on their own examination of the information regarding the Group, the terms of the Global Offer and the financial and other information in this document.

Pro Forma Financial Information In this document, any reference to “pro forma” financial information is to information which has been extracted without material adjustment from the unaudited pro forma financial information contained in Part 8: Unaudited Pro Forma Financial Information. The unaudited pro forma statement of net assets contained in Part 8: Unaudited Pro Forma Financial Information is based on the combined statement of financial position of the Group as at 29 March 2014 extracted without material adjustment from Part 7: Historical Financial Information. The unaudited pro forma statement of net assets has been prepared to illustrate the effect on the net assets of the Group of (1) the receipt by the Company of the net proceeds of the Global Offer from the issue of New Shares, (2) the Reorganisation and (3) the Refinancing (as defined in Part 11: Definitions) as if these events had occurred on 29 March 2014. The unaudited pro forma financial information is for illustrative purposes only. Because of its nature, the pro forma financial information addresses a hypothetical situation and, therefore, the unaudited pro forma statement of net assets does not represent the Group's actual financial position.

The relevant rules under the Luxembourg Prospectus Law regarding the preparation and presentation of pro forma financial information vary in certain respects from article 11 of Regulation S-X promulgated under the U.S. Securities Act and, accordingly, the unaudited pro forma financial information included herein should not be relied upon as if it had been prepared in accordance with such requirements. Shareholders and potential investors should refer to the basis of preparation of the unaudited pro forma financial information in Part B of Part 8: Unaudited Pro Forma Financial Information.

Non-IFRS Information This document contains certain financial measures that are not defined or recognised under IFRS, including EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Like-for-like Revenue Growth, Operating Cash Flow, Cash Conversion and CROIC.

EBITDA, Adjusted EBITDA and Related Margins EBITDA represents operating profit before depreciation and amortisation. EBITDA Margin is defined as EBITDA expressed as a percentage of revenue (which excludes value added tax (“VAT”)).

32 Adjusted EBITDA represents EBITDA, as defined above, adjusted to exclude items that the Directors consider to be exceptional and non-trading items, including pre-opening new store costs, onerous leases, transaction costs, costs relating to the historic 2011 excise duty dispute, dilapidations provisions, compulsory purchase order income, management LTIP bonuses, B&M European Value Retail 1 professional fees, shareholder monitoring fees, profit/(loss) on fixed asset disposal and profit/(loss) on foreign exchange derivatives. Details on restructuring fees are disclosed in note 8 of the combined Historical Financial Information included in Part 7: Historical Financial Information. Adjusted EBITDA Margin is defined as Adjusted EBITDA expressed as a percentage of revenue (which excludes VAT).

The Directors use EBITDA and Adjusted EBITDA as key performance indicators of the Group's business. The Group uses EBITDA and Adjusted EBITDA in its business operations, among other things, to evaluate the performance of its operations, to develop budgets and to measure its performance against those budgets. The Directors believe EBITDA and Adjusted EBITDA to be useful supplemental tools to assist in evaluating operating performance because, in the case of EBITDA, it eliminates depreciation and amortisation, and in the case of Adjusted EBITDA, it eliminates exceptional and non-trading items and the Directors believe that such measures provide useful supplemental information without regards to such items. The Directors consider Adjusted EBITDA to be a more accurate reflection of the underlying business performance of the Group and believe that this measure provides additional useful information for prospective investors on the Group's performance, and enhances comparability from period to period and with other companies, and is consistent with how business performance is measured internally. EBITDA, Adjusted EBITDA and related measures are not a measurement of performance or liquidity under IFRS or US GAAP and should not be considered by investors in isolation or as a substitute for measures of profit, or as an indicator of the Group’s operating performance or cash flows from operating activities as determined in accordance with IFRS or US GAAP. The Directors have presented these supplemental measures because they are used by it in managing its business. In addition, the Directors believe that EBITDA, Adjusted EBITDA and related measures are commonly reported by comparable businesses and used by investors and analysts in comparing the performance of businesses without regard to depreciation and amortisation, which can vary significantly depending upon accounting methods (particularly when acquisitions have occurred). EBITDA, Adjusted EBITDA and related measures may not be comparable to similarly titled measures disclosed by other companies and investors should not use these non-GAAP measures as a substitute for the figures provided in the Historical Financial Information.

Like-for-Like Growth, Customer Transactions Like-for-like growth, customer transactions is a comparison between two years of the number of the Group’s customer transactions for all relevant stores that were open for a minimum of one week in the first relevant year for which such information is provided and not closed permanently by the end of the second relevant year. Like- for-like growth, customer transactions includes all customer transactions from any such store commencing with the first full week that such store is open in the first relevant year, and all customer transactions from such store in the corresponding period of the second relevant year. Like-for-like growth, customer transactions is expressed as a percentage.

Like-for-Like Growth, Average Transaction Value Like-for-like growth, average transaction value is a comparison between two years of the Group’s average transaction value for all relevant stores that were open for a minimum of one week in the first relevant year for which such information is provided and not closed permanently by the end of the second relevant year. Like-for- like growth, average transaction value includes the average transaction value from any such store commencing with the first full week that such store is open in the first relevant year, and the average transaction value from such store in the corresponding period of the second relevant year. Like-for-like growth, average transaction value is expressed as a percentage.

Like-for-Like Revenue Growth Like-for-like revenue growth is a comparison between two years of the Group's sales of all relevant stores that were open for a minimum of one week in the first relevant year and not closed permanently by the end of the second relevant year. Like-for-like revenue includes all revenue from any such store commencing with the first full week that such store is open in the first relevant year, and all revenue from such store in the corresponding period of the second relevant year. Like-for-like revenue is expressed as a percentage.

33 Operating Cash Flow and Cash Conversion Ratio Operating Cash Flow is defined as Adjusted EBITDA plus or minus the changes in Working Capital less total capital expenditures. Cash Conversion Ratio is defined as Operating Cash Flow as a percentage of Adjusted EBITDA. Working Capital is the sum of inventories, trade and other receivables, trade and other payables and reverse lease premium.

CROIC CROIC is defined as Adjusted EBITDA expressed as a percentage of average invested capital, including non- current assets (excluding goodwill and intangibles), current assets (excluding cash and cash equivalents), and accumulated depreciation less current liabilities (excluding short-term debt).

The Group's CROIC for the year ended 30 March 2013 was 82%.

UK GAAP Financial Information Certain financial information in respect of financial periods ended on or before 31 December 2013 referred to in this document has been derived from financial information for Firesource Limited (“Firesource”), the principal trading company of the Group, prepared in accordance with UK generally accepted accounting principles (“UK GAAP”). Such financial information has been extracted without material adjustment from the financial information in respect of those periods (prepared in accordance with UK GAAP) or has been extracted or derived from those of Firesource’s unaudited accounting records that have been used to prepare that UK GAAP financial information and the source of such extraction or derivation has been separately identified throughout this document. UK GAAP differs in certain respects from IFRS. Such differences involve methods for recognising, measuring and recording the amounts shown in financial statements as well as different disclosure requirements. In addition, under UK GAAP, Firesource prepared its financial accounts for a financial year ended 31 December, which is different from the Group’s year end under IFRS. As a result, UK GAAP financial information for financial periods ended 31 December may not be comparable with other financial information that has been prepared in accordance with IFRS. In making an investment decision, potential investors must rely upon their own examination and judgments of the Group and must make their own judgments in assessing the financial information included in this document. Potential investors should consult their own professional advisers to gain an understanding of the differences between IFRS and UK GAAP, and how those differences might affect the financial information contained in this document.

The Directors consider that the below financial information provides additional useful information for prospective investors on the Group's performance from period to period and with other companies. The following table sets out the Group's revenue for the periods indicated:

For the year ended 31 December 2006 2007 2008 2009 2010 2011 2012 2013 (£m) Revenue ...... 78 130 256 427 549 713 935 1,218

Note: The numbers set out above have been extracted without material adjustment or derived from Firesource's consolidated financial information prepared in accordance with UK GAAP (and/or have been extracted or derived from those of the Firesource's consolidated unaudited accounting records that have been used to prepare the UK GAAP financial information) in respect of the periods set out above.

The following table sets out the Group's Adjusted EBITDA for the periods indicated.

For the year ended 31 December 2009 2010 (£m) Adjusted EBITDA ...... 39 44

Note: The numbers set out above have been extracted without material adjustment or derived from Firesource's consolidated financial information prepared in accordance with UK GAAP (and/or have been extracted or derived from those of the Firesource’s consolidated unaudited accounting records that have been used to prepare the UK GAAP financial information) in respect of the periods set out above.

34 The following table sets out the Group's quarterly like-for-like revenue growth for the periods indicated.

For the year ended 29 March 28 March 27 March 26 March 31 March 30 March 29 March 2008 2009 2010 2011 2012 2013 2014 (%) First Quarter ...... 7.8 6.5 27.0 7.9 (6.0) 8.7 7.3 Second Quarter ...... 5.5 7.5 18.1 2.4 0.6 4.7 7.9 Third Quarter ...... 10.1 4.5 12.1 (6.8) 12.1 7.0 6.2 Fourth Quarter ...... 12.0 10.4 3.4 (5.2) 10.7 6.0 4.9

Note: The numbers set out above have been extracted without material adjustment or derived from Firesource's consolidated financial information prepared in accordance with UK GAAP (and/or have been extracted or derived from those of the Firesource's consolidated unaudited accounting records that have been used to prepare the UK GAAP financial information) in respect of the periods set out above.

Other Financial and Operating Information Net new stores is calculated as the number of new stores opened net of relocations and stores closed due to lease expiry or compulsory purchase orders.

The Group defines average transaction value as (i) the Group's total revenue (including VAT) from all stores during a particular period, divided by (ii) the number of customer transactions at the Group's stores in that period.

Store Contribution is calculated as gross profit for a store, less its rent, service charges, landlords insurance, business rates, water rates, heat and light expenses, store wages and store administration costs.

Payback Period for a store or stores is calculated as the sum of capital expenditure and pre-opening costs for such store(s) divided by the sum of Store Contribution and the cash impact of any rent free periods for such store(s), expressed in months.

Payback Period including Working Capital for a store or store(s) is calculated as the sum of capital expenditure, pre-opening costs and working capital (calculated as the average annual working capital of the Group for a given year expressed as a percentage of the Group’s revenue for that year multiplied by the individual store’s revenue) for such store(s) divided by the sum of Store Contribution and the cash impact of any rent free periods for such store(s), expressed in months.

Other Information Unless otherwise specified or the context otherwise requires, references to stores herein are to the Group's stores in the UK operating under the B&M fascia.

Rounding Certain figures in this document, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances (i) the sum or percentage change of such numbers may not conform exactly with the total figure given; and (ii) the sum of the numbers in a column or row in certain tables may not conform exactly with the total figure given for that column or row.

Market, Economic and Industry Data Certain information contained in this document relating to the general merchandise market and the industry in which the Group operates as well as certain economic and industry data and forecasts used in, and statements regarding the Group's market position made in, this document were extracted or derived from other third party reports, market research, government and other publicly available information and independent industry publications, as the case may be, prepared by Euromonitor International, Google Analytics, PDIQ, Planet Retail, OC&C, Trevor Wood Associates and the United Kingdom Office for National Statistics.

Research by Euromonitor International should not be considered as the opinion of Euromonitor International as to the value of any security or the advisability of investing in the Group and accordingly, such information should not be relied upon for making any investment decision in respect of the Group.

While the Company believes the third party information included herein to be reliable, it has not independently verified such third party information, and none of the Company, the Underwriters or the Financial Adviser make any representation or warranty as to the accuracy or completeness of such information as set forth in this document. The Company confirms that such third party information has been accurately reproduced, and so far

35 as the Company is aware and is able to ascertain from information available from those publications, no facts have been omitted which would render the reproduced information inaccurate or misleading. However, the accuracy of such third party information is subject to availability and reliability of the data supporting such information and neither the information nor the underlying data has been independently verified. Additionally, the industry publications and other reports referred to above generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed and, in some instances, these reports and publications state expressly that they do not assume liability for such information. The Company cannot therefore assure you of the accuracy and completeness of such information as it has not independently verified such information.

Currency Presentation Unless otherwise indicated, all references in this document to “pounds sterling”, “£”, “pence” or “p” are to the lawful currency of the UK, all references to “$”, “US$” or “US dollars” are to the lawful currency of the US and all references to “€” or “Euros” are to the currency introduced at the start of the third stage of European economic and monetary union pursuant to the Treaty establishing the European Community, as amended.

The tables below set forth the pounds sterling versus the U.S. dollar exchange rates as certified by Bloomberg. The Company does not represent that the U.S. dollar amounts referred to below could have been or could be converted into pounds sterling at any particular rate indicated or at any other rate. The rates below may differ from the rates used in the Group's Historical Financial Information and other financial information appearing in this document.

The table below shows the high and low Bloomberg rates for pounds sterling versus the U.S. dollar for each respective year and the rate at the end of the year. The average amounts set forth below under “Average” are calculated as the average of Bloomberg rates for pounds sterling versus the U.S. dollar on the last business day of each month for each respective year.

End of Low High Average Year (U.S. dollars per pounds sterling) 2009 ...... 1.4300 1.6713 1.5716 1.6147 2010 ...... 1.4529 1.6038 1.5431 1.5612 2011 ...... 1.5543 1.6707 1.6102 1.5543 2012 ...... 1.5417 1.6242 1.5929 1.6242 2013 ...... 1.5177 1.6566 1.5671 1.6566

The table below shows the high and low Bloomberg rates for pounds sterling versus the U.S. dollar for each month during the six full months prior to the date of this document.

Low High (U.S. dollars per pounds sterling) December 2013 ...... 1,6336 1.6580 January 2014 ...... 1.6383 1.6668 February 2014 ...... 1.6341 1.6823 March 2014 ...... 1.6521 1.6786 April 2014 ...... 1.6606 1.6901 May 2014 ...... 1.6708 1.6983 June 2014 (through 11 June) ...... 1.6739 1.6802

The pounds sterling versus the U.S. dollar Bloomberg exchange rate on 11 June 2014 was U.S.$1.6802 per £1.00.

Forward-looking Statements Some of the statements under the headings Summary Information, Risk Factors and in Part 1: Industry Overview, Part 2: Business, Part 5: Operating and Financial Review and elsewhere in this document include forward- looking statements that reflect the Company's or, as appropriate, the Directors' or third parties' current views with respect to, among other things the intentions, beliefs and current expectations of the Company or the Directors or such third parties concerning, amongst other things, the results of operations, the financial condition, prospects, growth, strategies and dividend policy of the Company and the industry in which it operates.

36 Statements that include the words “expects”, “intends”, “plans”, “believes”, “projects”, “forecasts”, “predicts”, “assumes”, “anticipates”, “will”, “targets”, “aims”, “may”, “should”, “shall”, “would”, “could”, “continue”, “risk” and similar statements of a future or forward-looking nature can be used to identify forward-looking statements.

All forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Undue reliance should not be placed on such forward- looking statements because they involve known and unknown risks, uncertainties and other factors that are in many cases beyond the Group’s control. Forward-looking statements are not guarantees of future performance or actual results of operations or financial condition, and the development of the sectors and industries in which the Group operates may differ materially from those indicated in or suggested by the forward-looking statements contained in this document. Accordingly, there are or will be known and unknown risks and uncertainties that could cause the Group’s actual results to differ materially from those indicated in or suggested by these statements. The Directors believe that these risks and uncertainties include, but are not limited to, those described under Risk Factors, Part 2: Business and Part 5: Operating and Financial Review and includes, among others, statements relating to: • the macro-economic outlook in the UK and Germany; • the Group’s strategy outlook and growth prospects; • the Group’s distribution centres, transportation fleet or supply chain; • the nature of the competitive environment in which the Group operates; • the Group’s performance during peak selling season; • the Group’s leasehold property portfolio; • the Group’s ability to predict and fulfil customer preferences or demand and manage its inventory efficiently; • disruptions in the supply of the Group’s products from key suppliers; • the Group’s exposure to product liability claims and other litigation; • the reputation and value of the B&M, JAWOLL and HAFU brands; • the Group’s information technology, network and communications systems; • the Group’s ability to attract and retain key senior management and skilled personnel; • the Group’s integration of its recently acquired German operations; • the Group’s ability to protect confidential information of customers and employees; • the regulatory environment in the countries in which the Group operates, particularly with regard to employment-related regulations; • the effect of natural disasters, pandemic outbreaks, terrorist acts, global political events and other unforeseen circumstances on the Group’s operations; • the Group’s ability to maintain and enforce its intellectual property rights; • the Group’s ability to obtain commercial insurance at acceptable prices; • concerns over any future acquisitions; • the Group’s level of indebtedness; • exchange rate fluctuations; • changes in floating interest rates; • the default of counterparties in respect of monies and products owed to the Group; • costs incurred in the Group’s transition to a public company; • risks associated with the Global Offer and the Shares; and • other factors discussed in this document.

If one or more of these risks or uncertainties materialise, or should any assumptions underlying forward-looking statements prove to be incorrect, it could affect the Group’s ability to achieve its objectives and could cause the Group’s actual results of operations or financial condition to differ materially from those in the forward-looking statements. Any forward-looking statements in this document should be read in conjunction with the other

37 cautionary statements that are included in this document. Any forward-looking statements in this document reflect current views with respect to future events and are subject to these and other risks, uncertainties and assumptions.

None of the Company, the Directors, the Selling Shareholders, any of the Underwriters or the Financial Adviser can give any assurances regarding the actual occurrence of the predicted developments upon which the forward- looking statements are based. The Company, the Directors, the Selling Shareholders, each of the Underwriters and the Financial Adviser expressly disclaim any obligation or undertaking to update these forward-looking statements contained in this document to reflect any change in their expectations or any change in events, conditions, or circumstances on which such statements are based unless required to do so by applicable law, the listing rules (the “Listing Rules”) and disclosure and transparency rules (the “Disclosure and Transparency Rules”) made by the FCA under Part VI of FSMA.

Subject to any obligations under applicable law, the Listing Rules, and/or the Disclosure and Transparency Rules, the Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All subsequent written and oral forward-looking statements attributable to the Group or individuals acting on behalf of the Group are expressly qualified in their entirety by this section.

References to Defined Terms Certain terms used in this document, including certain capitalised terms and certain technical and other terms, are defined, and certain selected industry and technical terms used in this document are defined in Part 11: Definitions.

38 PART 1: INDUSTRY OVERVIEW

Market Overview Market Definition The Group operates principally in the UK retail market. The UK retail market had total store-based retail sales of £290 billion in 2013 and has grown by a compound annual growth rate (“CAGR”) of 1.3% between 2008 and 2013. The UK retail market is broadly split into three main segments: i) grocery retailers, ii) specialist retailers, and iii) general merchandise discount retailers. Grocery retailers account for the largest segment with total store- based retail value sales of £157 billion, which have grown by a CAGR of 3.4% between 2008 and 2013. Specialist retailers, which include apparel, electronics, health and beauty, home and garden, leisure and department stores, had total store-based retail value sales of £127 billion in 2013, which decreased by a CAGR of 1.3% between 2008 and 2013. (Source: Euromonitor International). Finally, general merchandise discount retailers, which principally include single pound and selected other discount retailers but exclude grocery discounters, had total store-based retail value sales of £6.8 billion in 2013, which have grown by a CAGR of 14.5% between 2006 and 2013 as highlighted in the chart below. (Source: Planet Retail).

UK General Merchandise Discount Retail Market Growth

Amounts in £ billion 9

8 CAGR: 14.5% 6.8 7 6.2 6 5.6

5 4.7 4.2 4 3.5 3 3 2.6

2

1

0 2006 2007 2008 2009 2010 2011 2012 2013

Source: Planet Retail. Represents the sum of yearly UK store-based retail value sales of 99p Stores, B&M, Poundland, Poundstretcher, Poundworld, Home Bargains and Wilkinson, excluding sales tax.

The Group's multi-segment positioning allows it to compete across all three retail segments. The Group has several core categories it focuses on within each segment. In the grocery segment, the Group focuses mainly on ambient grocery products (confectionery, soft drinks, canned food, shelf-stable meals, etc.); in specialty it is home and related home products (soft furnishings, decorative products, kitchen equipment, electrical products, etc.) and seasonal products (toys, garden, Christmas decorations). However, there are certain large categories in which the Group does not compete significantly, such as fresh, chilled and frozen foods in the grocery segment and fashion apparel in the specialty segment which constitute significant parts of the UK retail market.

The Group also operates in Germany through a majority stake in the JA Woll Group acquired on 30 April 2014. The German retail market had total store-based retail value sales of €405 billion in 2013. The total German retail market has grown by a CAGR of 1.1% between 2008 and 2013. Similar to the UK retail market, the German retail market is broadly split into three main segments: i) grocery retailers, ii) specialist retailers, and iii) general merchandise discount retailers. Grocery retailers in Germany had total store-based retail value sales of €194 billion, which have grown by a CAGR of 1.0% between 2008 and 2013. Specialist retailers in Germany had total store-based retail value sales of €209 billion in 2013. Finally, general merchandise discount retailers, which principally exclude large grocery discounters and category specialist discounters in Germany, had total store- based retail value sales of €2 billion in 2013. (Sources: Euromonitor International, company accounts).

The JA Woll Group principally competes in the German general merchandise discount segment with only a limited range of grocery items, thereby differentiating itself from the highly competitive grocery discount channel dominated by Aldi and Lidl. The JA Woll Group’s strength in seasonal goods, household goods and gardening products differentiate it from other non-grocery discount retailers. The partnership with B&M provides the JA Woll Group with the opportunity to expand the breadth of its non-grocery range, as well as to potentially develop its branded grocery and fast moving consumer goods (“FMCG”) offer.

39 Evolution of Discount Retailing The onset of the global financial crisis in 2008 and its impact on macroeconomic development in the UK has provided the basis for a structural shift in consumer behaviour. A tightening of real disposable incomes has squeezed the consumer and propelled the demand for value across all elements of the consumer's non- discretionary and discretionary spend.

For grocery spend, the rise of Aldi and Lidl in grocery retail, has been well publicised, notwithstanding the recent resurgence of GDP growth as their quarterly year on year growth percentage was 33.5% and 16.6% in March 2014, respectively. (Source: company accounts). In contrast, Tesco, Morrisons and Sainsbury's all had negative like for like growth for the first quarter of 2014. (Source: company accounts).

For other retail categories spend, there are multiple examples where a value proposition has been developed and/ or has grown rapidly in response to consumer demand compared to the incumbent. This growth would appear to continue beyond the immediate period of any economic downturn. Selected examples include: airlines, where Ryanair has grown revenues at a greater percentage than British Airways from 2008 to 2012; apparel retail, where Primark has redefined the UK landscape with its value-led ‘fast fashion’ offering; and the growth of online price comparison websites, such as www.moneysupermarket.com. (Source: company accounts).

Responding to this demand for value, general merchandise discount retailers have expanded their operations through a rapid new store opening programme, with total stores increasing from 1,039 in 2006 to 2,440 in 2013. (Source: Planet Retail). The Group has been one of the leaders, responsible for approximately 25% of the new stores added over this period.

As this structural shift has occurred, suppliers have had to react and adapt accordingly. The discount channel has become increasingly important and retailers such as the Group have become so relevant and important to the consumer that global FMCG companies now support discount retailers through dedicated national account managers, access to leading brand products, provision of differentiated pack sizes where necessary, and special product offers.

In addition to this support from suppliers, landlords have acknowledged the benefits of having a tenant such as B&M in their retail parks or shopping centres. Discount retailers drive footfall to the location and are perceived as attractive tenants from a financial point of view. This has allowed the Group to secure attractive locations and rents for its new store openings.

The Directors expect that the structural shift that has been driven by the demand and supply factors outlined above will continue to develop, driven by: i) Continued roll-out of discount retailers in the UK providing greater access to the consumer; ii) Increasing transparency (especially online) across retailers' prices allowing consumers to bargain hunt more effectively; iii) Increased transaction volumes and basket spend as the discount channel is increasingly accepted as a complementary shopping channel; and iv) Continued support from FMCG companies and other non-grocery suppliers.

Furthermore, this evolution has increasingly spread across all socio-demographic categories with discount retail increasingly being accepted by all consumers. Based on a customer survey conducted in October 2012, management believes that approximately 42% of the Group’s customers were in the ABC1 socio-economic- demographic category. Based on that survey, some one in seven customers were from the AB socio-economic group.

40 As the chart below highlights, a comparison of UK grocery discount retail penetration against grocery discount retail penetration in selected markets in Europe suggests there is a significantly higher level of growth potential in the UK grocery discount retail market as consumers increasingly adopt a value mindset.

European Markets Discount Penetration (Grocery only)

35%

30%

25%

20% 34% 15% Median: 10% 10%

5% 11% 8% 8% 10% 10% 5% 0% UK Spain France Italy Portugal Switzerland Germany

Source: Euromonitor International. Penetration rate calculated as 2013 retail value sales excluding sales tax of grocery discounters as a percentage of 2013 retail value sales excluding sales tax of grocery retailers.

In Germany, the grocery discount market is well established across multiple sub-segments and the penetration of discount in the consumer’s weekly shop is advanced when compared to selected other European markets. The JA Woll Group operates in a fragmented general merchandise discount market and the Directors believe that penetration in the general merchandise discount segment will continue to develop in Germany, representing an attractive opportunity for the Group as it invests in the JA Woll Group and improves its product offering.

Competitive Landscape The Group’s multi-segment positioning allows it to compete across all three UK retail segments—grocery retail, specialty retail and general merchandise discount retail.

In the UK grocery retail segment, the Group’s product offering is seen as a complementary shop in ambient grocery to the average consumer's weekly total grocery shop and is largely driven by convenience and impulse purchases resulting in small transaction sizes at high visit volumes. The Group does not compete in fresh, chilled or frozen food, which represents a significant portion of the total UK grocery retail market. Therefore, although the Group does compete against the consolidated “Big 4” grocery retailers in the UK and other smaller food retailers in ambient grocery, the Group only accounts for a very small portion of this large overall market and the Group typically carries less SKUs and smaller unit or pack sizes. The Group had food and soft drink sales of approximately £300 million compared to approximately £2.7 billion at Aldi, approximately £10.4 billion at Morrisons, approximately £15 billion at Sainsbury's and approximately £26 billion at Tesco in 2013. (Source: Planet Retail).

In the UK specialty retail segment, the Group’s product offering covers a broad spectrum of products and has seasonal trading flexibility, which puts it in a competitive position against several nationwide retailers. For example, in home and garden, the Group’s competitors include B&Q, Dunelm and Dobbies; in toys, competitors include Toys R Us and in stationery, competitors include WHSmith and Ryman. The specialist retail segment is generally fragmented with no single dominant retailer. The Directors believe that the Group can continue to take market share across individual categories due to its structural advantages of being able to provide significantly better value through its focus on only a select number of best selling SKUs, while not compromising on design, quality or packaging. For example, in April 2014, the Group had 300 total pet SKUs, while Pets at Home had 402 dog treats alone, the Group had 200 total stationery SKUs, while WHSmith had 3,621 stationery and office items, the Group had 500 total toy SKUs, while Toys ‘R’ Us had 1,328 action figures alone and the Group had 500 total home textile SKUs, while Dunelm had 474 filled cushions. (Source: company websites).

In the UK general merchandise discount retail segment, the Group competes with a select number of nationwide and regional discounters including Poundland and Home Bargains. The Group is differentiated from this group and has limited range overlap, especially with Poundland where the offer in B&M stores is far broader by virtue

41 of its multi-price point offer. Similarly, against Home Bargains, the Group is differentiated through its much broader range of homewares, furniture and gardening products and B&M stores being on average larger or more frequently located out-of-town.

In Germany, the JA Woll Group competes against a group of general merchandise discounters and a broader set of category specialist retailers. The general merchandise discount segment is highly fragmented with several retailers operating out-of-town portfolios regionally with limited overlap, as well as a few in town operators with larger networks of smaller stores. The JA Woll Group’s strength in certain product categories such as seasonal goods and gardening products helps to drive footfall.

Comparison to US Retail Market The Directors believe that evidence of the growth in the US dollar store market provides further evidence of the potential for continued structural growth in the UK discount retail market. The US dollar and variety store market has also demonstrated growth in a wide variety of economic environments growing from a market size of US$26.0 billion in 1999 to US$60.0 billion in 2012. One of these dollar stores, Dollar General, has grown quarterly like for like sales every year since 1990 and operated 11,132 stores as at 31 January 2014. (Sources: Euromonitor International, company accounts).

42 PART 2: BUSINESS

The following Part 2: Business should be read in conjunction with the more detailed operating and financial information included in Part 5: Operating and Financial Review and Part 7: Historical Financial Information of this document. The financial information included in this Part 2: Business has been extracted without material adjustment from the financial information in Part 7: Historical Financial Information, or has been extracted or derived without material adjustment from the Group's accounting records, which formed the underlying basis of the financial information contained in Part 7: Historical Financial Information of this document, or has been extracted or derived without material adjustment from the Group's combined financial statements for prior periods. Prospective investors should read this entire document and not just rely on the information set out below. References to years are to calendar years unless otherwise specified or the context otherwise requires.

Overview The Group is a general merchandise discount retailer in the UK and Germany. Its UK business is one of the largest and most profitable companies in the fast growing general merchandise discount retail market in the UK, which the Directors believe is having a disruptive impact on the overall UK retail market. The Group has grown revenues from £764.2 million in the year ended 31 March 2012 to £1,272.0 million in the year ended 29 March 2014, demonstrating a CAGR of 29.0% over this three year period. The Directors believe that B&M stores offer a compelling customer proposition, combining leading brand fast-moving consumer goods (“FMCG”) products at attractive prices with a strong non-grocery product offering that together deliver sensational value to customers over a wide range of price points.

Grocery products in B&M stores principally consist of branded FMCG products at competitive prices combined with typically higher priced non-grocery products. The Group delivers significant savings to the customer when compared to comparable products from other retailers. The Group operates a flexible B&M store format and its dynamic trading strategy flexes its product ranges aggressively to take advantage of seasonal shifts in customer demand over the course of each year. Under this flexible category and space management model, the layout and stock keeping unit (“SKU”) range of each B&M store is regularly adjusted in order to maximise the space allocated to seasonal and other faster-moving merchandise, thus enabling the Group to “trade the seasons”. As a result, and as illustrated in the figure below, the Directors believe B&M stores compete across the UK grocery, specialist and general merchandise discount retail markets (the “Addressable Market”). Within the Addressable Market, the Group particularly focuses on the fragmented UK specialty retail segment, which was £127 billion in 2013, according to Euromonitor International.

SPECIALIST RETAILERS

£127bn(1) Our focus is on the £127bn specialty retail segment

£157bn(1) £7bn(1)

FOOD RETAILERS GENERAL MERCHANDISE DISCOUNTERS

The Group maintains strong relationships with a broad range of global FMCG manufacturers. A high proportion of B&M stores’ grocery products are branded and sourced directly from leading FMCG suppliers (such as Procter & Gamble, Unilever, Pepsico and Mondelez which have increased their sales to the Group from the year ended 31 March 2011 to the year ended 29 March 2014 at CAGRs of 58%, 169%, 33% and 15%, respectively). Within its non-grocery product category, the Group has established a strong network of suppliers in the Far East (principally China), either directly through a network of over 300 manufacturers in the Far East, or through its

43 Hong Kong based joint venture company, Multi-Lines, that allows it to disintermediate UK importers and distributors. The Group has a well-developed Far East sourcing process that allows it to respond quickly to consumer taste. The Group has developed a strong and well-resourced in-house buying team, composed of over 100 people as of 29 March 2014, that leverages the Group's strong supplier relationships to make informed sourcing decisions. This platform, as well as a highly focused approach to SKU count, allows the Group to deliver sensational value for money to customers, and disruptive pricing which the Directors believe has enabled it to attract and develop a broad and loyal customer base.

As of 29 March 2014, the Group operated a network of 373 general merchandise discount retail stores located throughout the UK, in town centres and in out-of-town locations such as retail parks. B&M stores encompassed a total of 5.34 million square feet of selling space as at 29 March 2014 throughout England, Scotland, Wales and Northern Ireland, with extensive coverage in the northern regions of the UK and the Midlands, and increasing penetration of Southern England. The Group has a strong and consistent track record of successfully opening new stores in the UK. The Directors believe that there remains a significant opportunity to continue the roll-out of new B&M stores, with a focus on increasing the density of the store network in the northern regions of the UK and the Midlands and increasing the penetration of the Group's store network into Southern England. Based on an analysis conducted by OC&C in March 2014, the Directors believe that the UK currently could support around 850 total B&M stores. Approximately 66% of the UK population still did not have easy access to a B&M store (i.e. meaning less than a 10 minute car drive), as of 26 March 2014, according to OC&C. The Group has budgeted to open approximately 40 new B&M stores in the year ending 28 March 2015 and to open approximately 40 further new B&M stores in the year ending 26 March 2016. As of 29 March 2014, the Group employed over 15,900 employees, including part-time employees.

The Group operates a well-invested warehouse and distribution system for B&M stores that consists primarily of its two principal distribution centres in Speke near Liverpool, which are well located as a majority of its shipments from China arrive at the port of Liverpool. The Group operates an in-house fleet of heavy goods vehicles for B&M store deliveries and intra-warehouse transfers. The Directors believe that the Group has the existing infrastructure necessary to support up to 500 B&M stores across the UK. Non-binding heads of terms for the lease of an additional distribution centre in Southern England have been agreed, however it is not expected that the additional distribution centre will be operational until the year ending 25 March 2017, which would enable the Group to make progress towards its eventual target of 850 B&M stores in the UK.

The Directors believe that there is also the potential for the Group to expand its operations within the European general merchandise discount retail market. On 30 April 2014, the Group acquired a majority stake in JA Woll Group, which owns and operates 49 stores. This provides the Group with an attractive platform for growth in Germany. Germany has the largest discount retail market in Europe, with minimal general merchandise discount retailer penetration and customers that focus on value, according to Euromonitor International. The Directors believe that the acquisition of a majority stake in the JA Woll Group also represents an opportunity to increase sales volumes across the Group and drive further efficiencies and economies of scale. The Group currently intends to open one new JAWOLL store in the year ending 28 March 2015 and two new JAWOLL stores in the year ending 26 March 2016.

The Group’s diversified product offering and sensational value proposition to customers have resulted in a consistent track record of strong growth in revenue and EBITDA. The Group’s strong growth has been delivered under its experienced founder-led management team. The Group’s senior management includes seasoned retail industry professionals, supported by a well-trained employee base with strong and high quality buying, retail and operational teams. The Group’s total revenue and EBITDA were £764.2 million and £62.8 million for the year ended 31 March 2012, £992.9 million and £88.0 million for the year ended 30 March 2013, and £1,272.0 million and £112.7 million for the year ended 29 March 2014. The Group’s revenue grew by a CAGR of 29.0% over the three year period ended 29 March 2014, and its EBITDA grew by a CAGR of 34.0% over the same three year period. The Group has also recorded strong and consistent like-for-like revenue growth over the last three years to 29 March 2014, with average annual like-for-like revenue growth of 6.1% over the period. The above financial performance to 29 March 2014 does not include the JA Woll Group which was acquired subsequent to the 2014 financial year end.

The Directors believe that the following key strengths have transformed the Group into one of the largest and most profitable general merchandise discount retailers in the UK with potential for further domestic and international growth: • The Group’s targeted brand-led grocery offering delivers sensational value for customers; • The Group also offers a higher ticket non-grocery product offering at disruptive prices;

44 • Limited assortment model targeting just 5,500 live SKUs; • The Group operates a disruptive and highly dynamic direct sourcing process; • In-store seasonal flexibility drives seasonal performance; • Multi-point pricing model; • Strong pipeline of upcoming store openings with record of fast and attractive payback statistics; • Format flexibility and regional opportunity; • Well-invested infrastructure underpinning a scalable business model; • Lean cost structure and capital efficiency; • Great brand affiliation and strong customer advocacy; • Track record of strong profitable growth and cash generation; • Highly empowered and incentivised store management teams; and • Experienced founder-led management team with a strong board composition.

History and Development of the Group The first B&M store was opened in Blackpool, Lancashire in 1976. In December 2004, the Group was acquired by the Aroras, and Simon Arora became the Chief Executive Officer with Bobby Arora becoming the Trading Director. Following the change in ownership, the Arora family significantly re-invented the Group’s business model, in effect founding a new business.

At the time of the acquisition, the Group had a network of 21 B&M stores. Over the period to 29 March 2014, the Group has rolled-out 246 net new B&M stores organically and acquired 106 stores as portfolio transactions, which includes 20 Kwiksave stores in 2006, 12 Glyn Webb stores in 2007, 36 Au-Naturale stores in 2008, 23 Woolworths stores in 2009, 12 Focus stores in 2011, and 3 Comet stores in 2012. In 2007, the Group successfully opened its first larger out-of-town store format, which provided the base for growing the Group's out-of-town B&M store portfolio. Its total store portfolio was 373 stores as of 29 March 2014.

In 2010, the Group opened a newly-built distribution facility in Speke, near Liverpool, which added warehouse capacity of approximately 620,000 square feet.

As the Group continued to grow, Carl Allen, formerly with Iceland Foods, and Mike Benson, formerly with Wincanton (Asda), joined the Group in January 2011, as Operations Director and Distribution Director, respectively, followed by Paul McDonald, who came from TJ Hughes, as Finance Director in March 2011.

B&M European Value Retail Holdco 4 Limited (“B&M Holdco 4”), an acquisition vehicle formed by Clayton, Dubilier & Rice Fund VIII, L.P. (“CD&R Fund VIII”), agreed to acquire a majority stake in the Group in December 2012, and the acquisition closed in March 2013. The Group has continued to expand from 324 stores as of 31 December 2012 to 373 stores as of 29 March 2014 and has increased revenue and EBITDA from £992.9 million and £88.0 million, respectively, for the year ended 30 March 2013 to £1,272.0 million and £112.7 million, respectively, for the year ended 29 March 2014.

In March 2013, Sir Terry Leahy was appointed as Chairman. Sir Terry has extensive retail experience, having previously worked as Chief Executive Officer of Tesco from 1997 to 2011, during the period in which Tesco became one of the largest retailers in the world.

In February 2014, the Group opened an additional distribution centre adjacent to the current Speke distribution centre.

On 30 April 2014, the Group acquired a majority stake in the JA Woll Group, a discount retail store operator headquartered in Soltau, north-west Germany, which owns and operates 49 stores.

Strengths The Directors believe that the Group is well-positioned to continue its disciplined and profitable growth, due to its business model that underpins its leading position in a structurally high growth market. The Group delivers

45 sensational value to customers through its management of its targeted brand-led grocery offering and the breadth of its higher ticket non-grocery product offering, as well as its disruptive sourcing process. These components form the basis of the Group’s multi-price point product offering in a range of town centre and out-of-town stores, thereby allowing it to compete in a large Addressable Market. Within the Addressable Market, the Group focuses particularly on the fragmented UK specialty retail segment, which was £127 billion in 2013, according to Euromonitor International.

The Group has benefited from positive like-for-like growth, a consistent B&M store roll-out programme, strong and defensible margins and cash generation. The Group’s average annual like-for-like revenue growth from the year ended 31 March 2012 to the year ended 29 March 2014 was 6.1%.

The Directors believe that the Group’s key strengths are as follows:

The Group's targeted brand-led grocery offering delivers sensational value for customers The Group delivers recognisable and trusted brands to customers at attractive prices. The Group's wide range of top brands at competitive prices located at the front of each B&M store delivers sensational value to customers.

The Group enjoys strong and long-standing relationships with many global FMCG suppliers, including Unilever, Proctor & Gamble, Pepsico and Modelez, because of its size, track record of strong and consistent revenue growth and targeted range of SKUs (and hence large volume per SKU). These relationships enable the Group to buy recognisable and trusted brands at low prices, on a continuous basis.

The Group’s targeted range of branded convenience grocery products at competitive prices means it is complementary to, rather than a substitute for, a customer’s weekly grocery shop, because B&M stores stock very little fresh, frozen or chilled groceries or produce and customer footfall is driven by sensational value and convenience. Furthermore, the average transaction value of a B&M store customer, at approximately £10 for the year ended 29 March 2014, demonstrates that consumers are visiting the stores for fundamentally different reasons (such as convenience or value) compared to the “Big 4” UK grocers.

The Group also offers a higher ticket non-grocery product offering at disruptive prices In addition to its grocery and FMCG products, B&M stores have a wide product range spread over a number of non-grocery product categories, such as housewares, do-it-yourself (“DIY”), electrical, toys and petcare products, which the Directors believe represent a compelling product offering. The Group’s product range spans a wide range of price points, which highlights the Group’s flexible price architecture. Only 18% of products at B&M stores were priced at the 99p or £1 price point as at 29 March 2014, which differentiates it from several other UK non-grocery discount retailers. The broad choice of non-grocery products at sensational value encourages a “treasure hunt” browsing mentality for these products that customers clearly enjoy and offers the Group the opportunity to drive up average transaction value.

The Group’s Far East direct sourcing process is a key element in its ability to offer non-grocery products at competitive or disruptive prices, while still achieving strong returns, without compromising on quality or customer satisfaction. The Group is able to build on its management’s expertise and knowledge of sourcing from the Far East (principally China), which often enables it to source directly from the factory, thus removing the need for a Far East exporter or UK distributor, and the associated costs thereof. In addition, the Group has developed a stable of its own private-label brands that builds on its direct sourcing relationships and strong design expertise within its in-house product design team. Members of the in-house design team travel regularly to key retail centres such as New York, London, Paris, Hong Kong and Munich, and work closely with manufacturers in the Far East to ensure their products are consistent with prevailing consumer trends of high quality and offer excellent value for money.

Limited assortment model targeting just 5,500 live SKUs The Group’s business model uses a disciplined data driven approach to SKUs, targeting only 5,500 live SKUs at any one time for its B&M stores. The Group’s buyers are responsible for an average of 220 live SKUs each, which requires them to focus on “best sellers”. This SKU count per product category is typically much lower than specialist retailers who can have a total SKU count of up to 30,000. This focus, and hence volume for selected SKUs, creates buying power, which allows the Group to benefit from advantageous buying terms with

46 suppliers. In addition, the Group operates a “one in, one out” policy for adding new SKUs for its B&M stores. Each buyer closely monitors SKU sales and margins, and before they can add a new SKU, the buyer must cut another SKU in that product category (typically the worst or a poorly performing SKU). In order to facilitate the “one in, one out” policy, the Group’s buyers operate a “buy as you go” policy and generally only order twelve weeks of inventory at a time, to avoid over stocking and corresponding writedowns. The Group will only generally commit to longer periods of purchases on seasonal categories, such as gardening or Christmas products.

The Group’s disciplined merchandising provides it with the flexibility to replicate the best-performing SKUs of the Group’s competitors. The Group leverages its limited overall SKU count and focused product category size to ensure new SKUs are introduced in B&M stores quickly and at a competitive price. This constitutes a core competitive advantage versus specialist retailers, who are generally unable or unwilling to reduce the price of their comparable products to match those offered by the Group due to the deflationary effect on the product category, or the undermining of the product category’s pricing architecture.

The Group conducts regular price checks on its products to ensure that they are competitively priced, thereby delivering sensational value to its customers and building loyalty and repeat business.

The Group operates a disruptive and highly dynamic direct sourcing process The Group’s in-house design and product development team has significant experience in identifying and designing non-grocery products sold under the Group’s stable of approximately 96 private label brands. The buying and design team are continually monitoring evolving customer tastes, through readership of consumer lifestyle magazines, attendance at specialist trade fairs and visits to shopping centres internationally. There is a programme within each product category of constant replacement of slow-moving products with refreshed designs or alternative product lines. This dynamic process is a large contributor to the introduction of approximately 100 new SKUs in B&M stores every week.

It can take the Group less than a week to formulate design artwork on a product before approaching factories in the Far East for costing and then another three weeks before the item is on sale at B&M stores. The Group has built on the senior management’s long-standing and widespread relationships with factory owners in the Far East, primarily China, which provides it with fast access to competitive priced products, while maintaining consistent quality standards and reliable delivery. The Group works with a wide range of Far East manufacturers, to seek to ensure that it does not become overly reliant on a single manufacturer or supplier and to encourage a strong level of price competition between suppliers for any given product. A product can go from concept to being shipped from the factory in about nine weeks. By directly sourcing from manufacturers in the Far East rather than via UK intermediaries, the Group seeks to ensure that its products are delivered quickly and at competitive prices. Management believe that through the constant introduction of new products, and the rapid repeat ordering of successful new products, the Group is able to meet customer demand effectively and encourage high frequencies of return visit by shoppers.

Even for products where the Group's design expertise is not required, such as branded products, its sourcing model is competitively advantaged compared to specialist retailers. The Group does not aim to carry a wide range of SKUs within any one category. Its product selections therefore benefit from high volumes and full container loads being shipped to the Group’s depots.

The Group also typically pays its Far East suppliers a 10 to 30% deposit on ordering. It pays the balance prior to the delivery of the products, rather than asking for credit or delayed payment terms sought by mainstream retailers. This approach typically results in advantageous cost prices for the Group.

In-store seasonal flexibility drives seasonal performance The Group is able to actively adjust its store floor space throughout the year so that its product offering is favourably aligned to seasonal trading patterns. For example, during the Spring/Summer season, the Group tailors its product offering and floor space to offer a compelling range of gardening and outdoor products. Likewise, during the important Winter season, the same store space, which had been used previously for other products like gardening and outdoor products, can be used for toys and festive product lines. This allows the Group to seek to avoid seasonal low trading periods, unlike single category specialist retailers within the gardening or toy market whose product offering is largely fixed throughout the year.

47 Multi-point pricing model The Group’s multi-point pricing seeks to ensure that it can offer customers the brands they want at competitive prices. Without any fixed price point restrictions, the Group is able to offer recognisable and trusted brands in comparable product pack sizes to grocery retailers, while managing potential inflationary pressures. Furthermore, multi-point pricing means that the Group is able to offer a more varied non-grocery product offering than single price retailers. For example, the Group sells a dining table and chair set for £250 and vacuum cleaners at £70 in its B&M stores. Only 18% of products in B&M stores were priced at the 99p or £1 price point as at 29 March 2014. The Group’s multi-point pricing strategy enables it to target increasing average transaction value and drive like-for-like sales performance.

Strong pipeline of upcoming store openings with record of fast and attractive payback statistics Since the Group was acquired by the Aroras in December 2004, it has expanded its store network from 21 stores to progress towards becoming a national retailer in the UK with 373 B&M stores as of 29 March 2014. The Group aims to ensure its stores are clean, well-lit and easy for customers to shop in. The average remaining lease length on B&M stores was approximately 8 years and 3 months as at 29 March 2014.

The Group has demonstrated a strong commitment to its new store roll-out programme and has increased its B&M store portfolio by 41, 57 and 42 net new stores in the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively. All B&M stores opened as at 31 December 2012 were profitable as at 29 March 2014 based on a store contribution basis, and the Group has never had to close a store due to poor economics. The Group is an attractive tenant and has had significant support from institutional landlords.

According to Trevor Wood Associates, who compile research on out-of-town retail property, the Group has acquired more out-of-town space in the UK between 2011 and 2013 than any other general merchandise retailer.

The Group’s senior management team have a proven track record for identifying new store locations and proceeding to open them in a short time frame. For vacant properties with no third party consents required, the period between agreeing legal terms and the store opening can be as short as seven to eight weeks. B&M stores have a fast and attractive payback profile. B&M stores opened in calendar years 2011 and 2012 had an average Payback Period of six months and an average Payback Period including Working Capital of 14 months. The Directors believe that these are leading payback periods in the UK retail market.

Format flexibility and regional opportunity The Group successfully operates B&M stores located in town centres and out-of-town locations. As at 29 March 2014, the Group operated 166 town centre B&M stores which were generally between 6,000 and 20,000 square feet and are well-positioned to benefit from the growing UK consumer emphasis on convenience shopping. A B&M town centre store generally has a greater emphasis on grocery and FMCG products. Out-of-town B&M stores extend to a larger format that ranges between 20,000 and 35,000 square feet and a greater proportion of the space is dedicated to non-grocery products. The Group operated 207 out-of-town B&M stores as at 29 March 2014. The Directors take a flexible approach to opening B&M town centre versus B&M out-of-town stores based on site specifics and real estate availability.

The consistency of profitable trading and store economics across the Group’s entire B&M store network demonstrates that the Group’s sensational value proposition resonates well with customers in all regions. The Group’s focus in the short to medium term will be on increasing the density of the B&M store network in the northern regions of the UK and the Midlands and increasing the penetration of the Group’s B&M store network into Southern England. As a result, based on internal work and an analysis conducted by OC&C in March 2014, the Directors believe that there are significant opportunities to continue to add to the Group’s store portfolio, and that there is potential for around 850 B&M stores in the UK, which is more than double the Group's existing B&M store network.

Well-invested infrastructure underpinning a scalable business model The Group has a well-invested infrastructure, from its IT systems to its distribution and supply chain. The Directors believe that this creates a competitive advantage and significant barrier to entry for new competition, given the capital required and the cost advantages that the Group enjoys due to its scale and the development of its business processes. The Group’s strong operating cash flow has enabled it to fund its growth to date and

48 invest in headcount, systems and supply chain infrastructure to support its next phase of anticipated growth as a listed company. The Group opened a new second distribution centre in Speke in February 2014 with 500,000 sq ft of capacity which complements the original Speke distribution centre, which has 620,000 sq ft of capacity. The Group has invested significant funds to ensure the accuracy of picking in its distribution centres, which is a core focus for the Group. Accuracy was 99.7% for the period from 1 August 2011 to 3 March 2014. The combined capacity of the two distribution centres in Speke and further distribution centres in Blackpool and Knowsley are designed to support the Group’s current B&M store network and the Directors believe it already is capable of supporting up to 500 B&M stores across the UK. The Group manages its own distribution from the distribution centres to its stores via its dedicated in-house heavy goods vehicle (“HGV”) fleet, which achieved 98% of deliveries departing on an on-time basis in the year ended 29 March 2014.

Lean cost structure and capital efficiency The Group’s strict adherence to cost discipline has been a key trait of the business through its evolution. The Group’s management continues to maintain a strict focus on its cost base, to enable it to deliver its high quality products at sensational value to the customer and retain a price advantage over its competitors. The Group is committed to operating a lean and flexible business model that allows for format flexibility and the ability to “trade the seasons”. Out-of-town B&M stores do not need to be situated in prime retail parks, but can instead be situated on adjacent retail parks or standalone sites, where lower rent costs can be achieved. Rent costs for the Group's in-town and district centre B&M stores have benefitted from the recent weakness in the UK retail environment, as a result of the growing impact of e-tail and the polarisation of the property market. As a result of this trend, many high street retailers (particularly independents) have surrendered leases, providing the Group with a cost-effective means of securing space in town centre locations within market towns and district or secondary urban centres. The Group does not seek to open stores in prime shopping malls or in the prime city centre locations, where there is more demand for retail space. For the year ended 29 March 2014, B&M store rent costs were only 4.1% of revenue, which is a key metric that the Group's management focuses on when evaluating new store opportunities. Variable warehouse costs were similarly low, at 1.5% of revenue for the year ended 29 March 2014.

Staff costs are also a key area of focus for the Group’s management, both at the store level and for the wider group. Maintaining a flexible but appropriately staffed business has been, and will remain a core discipline for the Group. The Group's target for B&M store-based wage costs is approximately 9% of revenue and B&M store managers are assessed against this key performance indicator on a weekly basis.

Great brand affiliation and strong customer advocacy As of 26 March 2014, only 34% of the UK population had easy access to a B&M store (i.e. meaning less than a 10 minute car drive), according to OC&C. Within this subsector of the population, the Directors believe that the B&M brand is highly recognised and well-regarded. The Group enjoys a high level of customer support, with 2.7 million individual customer transactions per week and with 138 million individual customer transactions in the year ended 29 March 2014.

More importantly, based on a PDIQ customer survey conducted in December 2013, once a customer has experienced the B&M shopping experience, they exhibit a high degree of loyalty and repeat business. Based on a customer survey conducted in October 2012, management believes that approximately 81% of customer visits to B&M stores were planned visits and approximately 64% of B&M shoppers visit a B&M store at least once a fortnight. According to that survey, approximately 42% of B&M shoppers visited a store at least once a week. The Group measures customer satisfaction through a net promoter score (“NPS”), which is gathered through exit surveys. The Group's NPS score measured by this method was 68% as of December 2013.

The Group has a diversified customer base with representation across all socio-economic groups in the UK. Based on a customer survey conducted in October 2012, management believes that approximately 42% of customers of B&M stores were in the ABC1 socio-economic groups (of which 15% were in the AB group and 27% were in the C1 group), and approximately 58% of customers were in the C2DE socio-economic groups (of which 27% were in the C2 group and 31% were in the DE group). This demonstrates that the structural shift in the UK retail market towards value is taking hold across the range of demographics and underpins the Directors' belief that penetration of grocery discount retail within the UK is set to increase.

The Directors believe that the Group’s customers are advocating the B&M brand and contribute towards driving net new footfall into B&M stores. Approximately 41.5% of the like-for-like revenue growth in the year ended 29 March 2014 was attributable to increased customer transactions. The Directors believe that the key drivers of

49 the increase in customer visits are the Group's competitive prices, convenient locations, and the wide range of recognisable and trusted brands. As the Group executes its consistent store roll-out across the UK, and gains access to an increasing customer base, the Directors believe that the Group's brand strength and recognition will continue to grow, making the brand known to a wider range of customers.

The Group currently uses its website (www.bmstores.co.uk) as a shop window to drive awareness of its competitive prices and drive footfall into its stores. With an average of over 1.2 million unique website visits per month for the period from 1 January 2013 until 31 January 2014 and over 300,000 Facebook “Likes’’ as of 12 March 2014, the Group's non-transactional online presence drives price comparability and transparency, which has enabled customers to research products online that they can then purchase in B&M stores. Given the Group's current average transaction value, the Directors are not currently actively contemplating a transactional online model, but would consider a click and collect offering as a future medium term opportunity.

Track record of strong profitable growth and cash generation The Group has generated strong revenue and EBITDA growth over the last three financial years. Revenues consistently increased year-on-year during that period, growing from £764.2 million for the year ended 31 March 2012 to £1,272.0 million for the year ended 29 March 2014. EBITDA has increased at a similar rate, growing from £62.8 million for the year ended 31 March 2012 to £112.7 million for the year ended 29 March 2014. This rapid growth has been accompanied by a consistently strong performance in EBITDA margin, growing from 8.2% for the year ended 31 March 2012 to 8.9% for the year ended 29 March 2014. Adjusted EBITDA margin rose from 8.8% for the year ended 31 March 2012 to 10.2% for the year ended 29 March 2014. The strong growth in revenue and EBITDA was driven primarily by new store openings and strong like-for-like performance across the store network. Like-for-like revenue growth was 5.1%, 6.6% and 6.5% in the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively. New store openings during this period were entirely financed by internal cash flow generated from operations.

The Group benefits from strong cash generation primarily due to the low capital expenditure required to open new B&M stores and maintain its existing B&M store network. B&M stores are welcoming and easy-to-shop but require limited recurring maintenance capital due to their functional nature and the absence of store freezer or refrigeration systems. Despite the growth of the B&M store portfolio over the period, Operating Cash Flow grew from £43 million for the year ended 31 March 2012 to £84 million for the year ended 29 March 2014.

In addition to financing the opening of new B&M stores, the Group has made significant investments in its central functions, as it further developed its business processes, infrastructure and product offering. Capital expenditure has grown from £9.4 million for the year ended 31 March 2012 to £32.9 million for the year ended 29 March 2014. Of the £32.9 million, £16.7 million related to new stores, £9.5 million related to infrastructure investment and £6.7 million related to maintenance capital expenditure.

Highly empowered and incentivised store management teams The Group’s in-store management teams for B&M stores are empowered and incentivised to drive their own- store sales and profitability. The Group provides cash bonus incentives for its in-store management teams for B&M stores based on three key performance indicators: store wage costs as a percentage of store sales; year-on- year like-for-like revenue growth; and active monitoring of inventory to prevent shrinkage from loss or theft. It also offers internal competitions and prizes among a peer group of other B&M stores to encourage friendly competition.

Stock-keeping and inventory management are greatly facilitated at the B&M store level by the Group’s bespoke proprietary handheld terminal software. B&M store managers use this hand-held data system to re-price, check inventory, set replenishment levels and assess volume and margins while walking the store. This encourages them to manage their stores in an entrepreneurial fashion and according to the prevailing competition in their catchment area. The fully-integrated electronic point of sale (“EPOS”) and handheld terminals deliver granular own-store sales and margin data, as well as pricing and inventory data, to store managers and empowers store management to focus on driving sales. The Directors believe that the Group's fully integrated EPOS and handheld terminal system is the first of its kind in the UK general merchandise discount retail market and constitutes a real competitive advantage with respect to optimising its store portfolio store by store, and ultimately improving like-for-like revenue.

50 Experienced founder-led management team with a strong board composition The Group’s founder-led management team has delivered robust growth since the Group was acquired by the Aroras in December 2004, through the implementation of the current business model, the success of the Group's B&M store roll-out strategy and its leverage of its sourcing and supplier relationships. The Group's senior management has been supported by a large, well-resourced employee base that includes high quality buying, retail and operational teams.

Simon Arora has been the CEO of the Group since December 2004. Prior to that, Simon managed Orient Sourcing Services Ltd, a wholesale housewares business, which he co-founded with his brother Bobby Arora and successfully sold to Lambert Howarth Group Plc in 2000. The Group's Finance Director Paul McDonald joined the Group in March 2011. He has over 20 years of experience in the discount retail sector having held senior roles at Littlewoods, Ethel Austin and TJ Hughes. Bobby Arora has been the Group's Trading Director since December 2004. Sir Terry Leahy is the non-executive Chairman of the Group. Prior to joining the Group, Sir Terry was CEO of Tesco plc from 1997 to 2011.

Following the Global Offer, Simon and Bobby Arora expect to continue to retain a significant shareholding in the Group and to remain heavily involved in the management of the business. Their extensive experience of Far East sourcing is a key competitive advantage for the Group and a meaningful barrier to entry to competitors. The Directors believe that the expertise and dedication of the Group's executive directors, senior management team and recent appointments to its Board provide it with a strong foundation to pursue its strategy. See “Part 3: Directors, Senior Managers and Corporate Governance” for details of the Company’s Board.

Strategy The Group’s strategy is to continue its strong track record for delivering profitable growth by leveraging its business model to benefit from the structural shift in UK retail towards value. It seeks to compete successfully against specialist retailers, grocery retailers as well as the fast growing cohort of general merchandise discount retailers, which together constitute the Group's Addressable Market.

Within this Addressable Market, the Group focuses on the fragmented UK specialty retail segment, which was £127 billion in 2013, according to Euromonitor International. The Group currently has a small market share in this Addressable Market, which highlights the real possibility of significant market share gains over time.

The Group also seeks to leverage its competitive advantage and well-developed business model into continental European markets, such as Germany.

Continued focus on delivering sensational value to its customers through price leadership The Group’s strong track record of delivering profitable growth is a consequence of its ability to leverage its business model to deliver highly competitive prices to its customers. The Directors believe that the Group’s sourcing process is a key competitive advantage and the Group will continue to be dedicated to maintaining strong relationships between its in-house product design team and its Far East manufacturers and suppliers to produce and bring high quality products to market quickly and at competitive prices. The Group will also continue to focus on maintaining its strong relationships with global FMCG manufacturers in order to buy recognisable and trusted brands for sale at competitive prices. The Directors believe that the Group’s tightly controlled range of SKUs, seasonal product ranges, own private label brands, Far East sourcing advantage and strong FMCG relationships will help it to deliver sensational value to its customers and maintain price leadership.

Continued store roll-out The Group has a strong commitment to its consistent B&M store roll-out programme in the UK, with a proven ability to identify new and profitable B&M store locations. The Directors believe that the opportunity exists to increase its penetration of the UK retail market. Supported by internal work and analysis by OC&C, the Directors believe that there is potential for around 850 B&M stores in the UK, making it possible to more than double the current store network. The Directors plan to open new B&M stores at a disciplined rate of approximately 40 B&M stores per annum. New B&M store openings are expected to take place across the UK, with a particular emphasis on increasing the density of the B&M store portfolio in Northern England and the Midlands, while driving penetration into Southern England, where the Group already has 52 B&M stores as at 29 March 2014. The Directors believe that there exists a significant opportunity to open new B&M stores in the UK given the proven resonance of the B&M proposition with customers across all regions of the UK. The Group is able to

51 successfully trade a variety of B&M store sizes (typically between 6,000 and 35,000 sq ft), formats (town centre and out-of-town) and market demographics (based on a customer survey conducted in October 2012, management believes that 42% of customers of B&M stores are from the more affluent ABC1 socio- demographic groups). The Directors do not believe that there will be any significant adverse changes to store payback or profitability from the planned B&M store roll-out programme. In addition, the Directors believe, supported by analysis from OC&C, that the Group can sustain multiple B&M stores in individual markets and regions with little to no cannibalisation of existing B&M stores.

Continued delivery of like-for-like growth As the Group's customers continue to spread the word about B&M and its brand becomes increasingly well- known, the Directors believe that this will drive increasing footfall into B&M stores. Based on customer loyalty surveys conducted by PDIQ in December 2013, the Directors believe that the high quality products sold at competitive prices deliver sensational value to customers and will continue to drive customer loyalty and repeat business. The Group’s management team will also continue to explore opportunities for active product category management by using its disruptive sourcing process to win market share, such as the recent expansion into branded stationery, small domestic appliances and craft items for hobbyists. Further drivers of like-for-like growth are expected to include (i) the development of the Group’s own private label programme into new areas such as pet food, (ii) new brand licensing relationships, (iii) continued investment in the Group’s customer service, (iv) effective category and space management and (v) enhanced supplier relationships and terms.

Disciplined expansion into continental Europe Building on the Group’s track record for profitable growth and B&M store roll-out in the UK, the Directors believe there exists a significant opportunity for growth through a disciplined expansion into the European market. The Directors have carried out a detailed assessment of the expansion prospects in Germany, including market size, customer tastes, price levels, competition and logistics. The penetration of discount retailers in the German grocery retail market is the largest in Europe at approximately 34% in 2013 according to Euromonitor International, driven by the presence of discount grocery retailers such as Aldi and Lidl. The Group’s recent acquisition of a majority stake in the JA Woll Group offers a significant opportunity for the operations and processes of the JA Woll Group to benefit from the Group’s strong supplier relationships, Far East sourcing expertise and roll-out execution, as well as sharing operational best practices. The Directors believe that the acquisition of a majority stake in the JA Woll Group also represents an opportunity to increase sales volumes across the Group and drive further efficiencies and economies of scale, in both businesses, as well as creating a significant long-term roll-out opportunity in Germany.

Continue to invest in infrastructure to support growth The Group will continue to invest in its infrastructure to support the long-term growth of its operations. Following the addition of its second distribution centre in Speke, Liverpool, the Directors believe the Company has sufficient capacity to manage its near-term growth prospects. However, as penetration into Southern England gathers pace, a further distribution centre in Southern England may become necessary. The Directors expect that the costs of such a new distribution centre would in part be offset by the fuel savings from deliveries that would otherwise have to be serviced from the existing distribution centres in Northern England. Non-binding heads of terms for the lease of an additional distribution centre in Southern England have been agreed, however it is not expected that the additional distribution centre will be operational until the year ending 25 March 2017, which would enable the Group to progress towards its eventual target of 850 B&M stores in the UK. This new distribution centre should enable stores in Southern England to be supplied at the same cost structure as the existing store portfolio.

The Group’s in-house fleet of HGVs gives it operational control of its distribution network. As its B&M store network continues to grow, the Group will continue to invest in its in-house fleet to ensure deliveries are made on time and that any new HGVs added to the fleet meet industry-leading levels of emission controls. It will also continue to invest in double-deck trailers to seek to offset future increases in transport costs.

The quality and ambiance of B&M stores is, and will remain, a core focus for the Group and it will continue to invest in stores to seek to ensure that they are clean and well-lit, and create a welcoming, easy and pleasant shopping experience for the customer.

Product Offering B&M stores offer a broad range of grocery and non-grocery products across a wide range of price points. In addition to providing customers with products at sensational prices, the Group's product offering also provides

52 price simplicity and convenience. For example, the Group's recognisable and trusted branded grocery products are offered in single unit or small pack sizes that are located at the front of the store for easy access. The Group does not have a “high-low” promotional pricing strategy, and instead delivers “Every Day Low Prices” under its “Every Day Low Cost” philosophy. By focusing on single unit packs, the Group offers convenience and allows the consumer to decide the quantity he or she wants to purchase. Alongside its grocery products are quality non- grocery products sold at highly disruptive prices.

The Group prides itself on its disciplined sourcing strategy, pursuant to which B&M stores target approximately 5,500 live SKUs. To maintain this number of live SKUs, the Group operates a “one in, one out” policy for adding new SKUs. Before a Group buyer can add a new SKU, he or she has to cut a SKU, typically a poor-performing SKU in that product category.

As of 29 March 2014, approximately 18% of the Group’s SKUs had a price point of £1 or 99p, and 66% of the Group’s SKUs had price points higher than £1. The following pie chart shows the distribution of price points for live SKUs as a percentage of total SKUs as at 29 March 2014.

£20.01+ £10.01-£20.00 4% 6% £0.01-£0.98 16% £5.01-£10.00 13% £0.99-£1.00 18% £3.01-£5.00 15%

£1.01-£3.00 28%

B&M stores’ product offering consists of: • Grocery products: the majority of the Group’s grocery products are branded FMCG products offered at sensational prices, and include household consumables, such as cleaning supplies, health and beauty products, confectionery, drinks and ambient food products. • Non-grocery products: which includes DIY products, household textiles, homewares, furniture, toys, seasonal goods, electrical goods and clothing. Many of the Group’s non-grocery products are its own private label products. This includes seasonal merchandise for Christmas, Halloween, Easter, Valentine’s Day and the back to school period, along with seasonal winter and summer products. The wide range of non-grocery products at various price points available at each B&M store is designed to encourage a “treasure hunt” browsing mentality for these products.

The following pie chart shows a breakdown of the Group's live SKUs as a percentage of total SKUs in B&M stores as of 29 March 2014 by category.

Ambient Food 14% Home 27%

FMCG Non-grocery 26% Toys & Seasonal 14% Other(1) 19%

(1) Other includes: Pet care, indoor furniture, health and beauty gift, electrical, DIY, stationery, textiles.

The Group’s business model involves operating with a flexible store layout and merchandising strategy pursuant to which each B&M store actively manages its product ranges to reflect a number of factors, including local competition, customer preferences in the local market, the store size and the season. The Group also aggressively re-allocates B&M store shelf space in order to take advantage of seasonal shifts in customer demand. Under this flexible category and space management model, the layout and SKU range of each B&M store is regularly adjusted in order to maximise the space allocated to seasonal and other faster-moving merchandise, thus enabling the Group to “trade the seasons”. The product mix at each B&M store is also regularly reviewed to seek to enhance sales and profitability, with the removal of slow-moving products and the addition of new products. In addition, the Group adjusts the sizes of the areas dedicated to particular product categories in response to seasonal changes and changes in customer demands and the local competitive environment.

53 Upon entering a B&M store, customers pass through the “Manager’s Specials” area. This area contains core grocery lines together with a selection of products and seasonal offers tailored to the time of the year and upcoming festive events. From the “Manager’s Specials” area, customers typically enter the grocery products area before passing through to the non-grocery products area. The seasonal department, which dramatically changes from season to season, is within the non-grocery products area. See “—Seasonal Trading”.

The Group’s store management is empowered with real time data to make fact-based decisions about the individual product inventory levels in their stores, including access to a fully integrated EPOS that delivers granular, in-store sales figures and margin data to store managers via a handheld terminal. This technology, together with approximately 700 stocktakes conducted across the estate each year, has helped the Group experience shrinkage of less than 0.90% over the last four years. The Group has recently been reviewing the amount of space given to each of its product categories at an individual B&M store level, in order to maximise the return on space. In connection with this review, the Group is grading each product category within an individual store, allowing it to optimise the product selection available in each store, and to provide a more tailored offering at the individual B&M store level.

Seasonal Trading The Group views its four main seasons as January/February (furniture, home and cold weather merchandise), Spring/Summer (gardening and outdoor recreational merchandise), Autumn (Halloween and home merchandise) and Christmas (toys and decorative merchandise). Out of these four seasons, the Group views the Christmas season as the most important with 32.2% of sales generated in the third quarter for the year ended 29 March 2014.

Private Label Products As of 29 March 2014, the Group’s range of private labels comprised approximately 96 different private labels, in a variety of product categories compared to 72 and 56 as of 30 March 2013 and 31 March 2012, respectively. The following table sets forth several examples of the Group’s proprietary brands and the applicable product category as at 29 March 2014.

Product Product Proprietary Brand Category Proprietary Brand Category

Cleaning Lighting

Car Care Outdoor Toys

Bathroom DIY

Christmas Home Décor

Childrenswear Homewares (boys)

Childrenswear Cleaning (girls)

54 Store Network The Group operated a network of 373 B&M stores encompassing a total of 5.34 million square feet of selling space as at 29 March 2014. The Group has B&M stores throughout the UK in England, Scotland, Wales and northern Ireland located in convenient locations, across a combination of town centres and out-of-town locations.

B&M stores were on average 14,145 square feet per store as at 29 March 2014. For the year ended 29 March 2014, all B&M stores opened prior to 1 January 2013 were profitable.

The following graph sets out the Group’s revenue distribution based on store size (expressed in thousands of square feet) for the year ended 30 March 2013 based on all B&M stores opened prior to 31 December 2012.

19.9%

15.1% 15.4% 14.1%

9.2% 9.4%

6.8%

3.5% 3.1% 2.3%

0.0% 0.3% 0.4%

Less than 2-4k 4-6k 6-8k 8-10k 10-14k 14-18k 18-22k 22-26k 26-30k 30-34k 34-38k Above 38k 2k Poundshops DIY Specialists Typical Size Typical Size

As highlighted by the above table, the Group has flexibility with its format as it is able to employ a variety of store sizes.

As of 29 March 2014, the Group had a portfolio of 166 town centre and 207 out-of-town B&M stores. The following table sets out information on the total number of B&M stores and the total average selling space (in square feet) of the Group as of 31 March 2012, 30 March 2013 and 29 March 2014.

As of 31 March 2012 30 March 2013 29 March 2014 Total number of B&M stores ...... 274 331 373 Total average selling space (square feet)...... 12,131 13,179 14,145

The following table sets out information on the geographic location of the Group’s B&M stores as of 29 March 2014.

Total England: North ...... 158 Midlands ...... 64 South ...... 52 Scotland ...... 48 Wales ...... 23 Northern Ireland ...... 28 Total ...... 373

55 B&M store density per 100,000 of population as at 29 March 2014 is illustrated in the map below:

STORES PER 100,000 POPULATION

1.5 to 2.0 1.0 to 1.5 0.5 to 1.0 0 to 0.5

The Directors believe that the ability of other general merchandise discounters, such as Poundland, to trade nationally demonstrates the opportunity for B&M to also expand into the south, especially as B&M’s price points are mostly above that £1 level.

New Store Roll-out According to analysis undertaken by OC&C in March 2014, only some 34% of the UK population has easy access to a B&M store, i.e. meaning less than a 10 minute car drive away.

The Group increased its B&M store network by 41 net new stores in the year ended 31 March 2012, 57 net new B&M stores in the year ended 30 March 2013 and 42 net new B&M stores in the year ended 29 March 2014. The Group has a strong and consistent track record of successfully opening new B&M stores in the UK over the last 7 years.

The following table sets forth the number of the Group’s net new B&M stores opened each quarter for the years ended 31 December 2011, 2012 and 2013.

For the year ended 31 December 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Number of net new stores opened during the period ...... 5 12 17 9 3 15 15 20 7 10 16 12

The Directors believe that there remains a significant opportunity to continue the roll-out of new B&M stores across the UK. As of 29 March 2014, there are only 52 B&M stores in Southern England. According to an OC&C study conducted in March 2014, returns in all B&M stores are approximately the same throughout the UK.

OC&C analysed the performance (on a UK GAAP basis) for the year ended 31 December 2013 of all B&M stores that had been opened before August 2012, and found that the average store contribution margin in the North, Scotland and Northern Ireland (199 stores) was 15.1%, in the Midlands and Wales (71 stores) was 14.9% and in the South (19 stores) was 15.4%. In the same study, OC&C found that B&M stores across all three regions had a consistent financial profile.

The Directors believe based on internal analysis and a study conducted by OC&C in March 2014 that the UK currently could support around 850 total B&M stores. The Group has a strong pipeline of potential new B&M stores which are either exchanged or currently going through legal processes, and currently intends to open approximately 40 new B&M stores and one new JAWOLL store in the year ending 28 March 2015 and to open

56 approximately 40 further new B&M stores and two new JAWOLL stores in the year ending 26 March 2016. The Directors believe that there is also the potential for the Group to leverage its business processes and sourcing platform into the general merchandise discount retail market in Europe.

The following table sets forth the actual and budgeted net number of the Group’s newly opened B&M stores for the years ended 31 December 2011, 2012 and 2013.

For the year ended 31 December 2011 2012 2013 Actual number of net new stores opened during the period ...... 43 53 45 Budgeted number of net new stores to be opened during the period ...... 40 40 40

The majority of the B&M store opening programme has been achieved through organic growth. Of the 98 B&M stores opened between 1 January 2012 and 30 March 2013, only three B&M stores were acquired as a package of stores from the administration of a failed retailer.

All B&M stores which were opened prior to 1 January 2013 made a positive store contribution in the year ended 29 March 2014, which the Directors believe is a testament to the Group’s highly disciplined and rigorous investment processes.

The Group also has experienced what it believes is limited cannibalisation to date. For example, the Group opened 73 new B&M stores between September 2012 and December 2013 and of those 73 only 22 were within five kilometres of an existing B&M store. Those 22 new B&M stores were within 5 kilometres of 32 existing B&M stores. The 32 existing B&M stores experienced the following changes in like-for-like revenue growth in the year ended 29 March 2014: two B&M stores continued to enjoy positive like-for-like revenue growth; 18 B&M stores were negative 0-3%, four B&M stores were negative 3-5%; four B&M stores were negative 5-10%; two B&M stores were negative 10-15% and two B&M stores were greater than negative 15%.

In addition, the Directors believe that based on internal analysis there is no clear correlation of an individual store’s performance with the number of third-party competitors in a catchment area.

The site selection process for each new B&M store follows a similar process beginning with a retained agent assessing (and visiting) potential sites and providing a store appraisal for each, which includes evaluating local demographics, retail adjacencies, property characteristics and economics. The Group tends to avoid prime location space that commands high rental prices, as the Directors believe that the Group has a compelling customer proposition that is enough to drive footfall to B&M stores. The Group has used the same agents for a number of years and the appraisal is tailored to management’s expectations. The Group’s property acquisitions team then reviews the site list compiled by the agent and, having consulted the operations team, condenses this into a recommendation. The CEO reviews all property department recommendations and approves the final decision. Head of terms are then negotiated before commencement of the legal process.

The Group’s typical B&M store roll-out process for a vacant store takes approximately eight weeks from entering the legal process to store opening (approximately four weeks from a site entering legal process to exchange and approximately four weeks to fit out and open the store). As at 29 March 2014, the Group’s two year B&M store roll-out pipeline included 17 B&M stores that are currently in the legal process, 50 B&M stores where heads of terms have been negotiated and agreed, and four B&M stores that are currently in the new build development stage. B&M stores opened in calendar years 2011 and 2012 had an average Payback Period of six months and an average Payback Period including Working Capital of 14 months. In the first year of operation, these B&M stores averaged £3.9 million of sales per store, had an average individual store EBITDA and EBITDA margin of £0.6 million and 15.7%, respectively, and an average net investment of £0.3 million. To date, the Directors believe that there has been minimal cannibalisation of the Group’s existing B&M stores by its new B&M stores.

In addition to the new B&M store roll-out, the Group refurbished 7, 16 and 22 existing B&M stores in the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively. The Group also relocated nil, two and one B&M stores over the same periods, respectively. Its combined operating expenditure on B&M store repairs and its capital expenditure on maintenance of B&M stores was £4.6 million, £5.5 million and £8.5 million for the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively. For the years ended 31 March 2012, 30 March 2013 and 29 March 2014, the Group has never had to close a B&M store due to poor economics. The only B&M store closures that have taken place were a result of relocations or compulsory purchase orders.

57 For the year ending March 2015, the Group does not currently have any plans to close any B&M stores, apart from one closure, which is due to relocation. No B&M store closures are currently planned for the year ending March 2016, unless a relocation becomes available.

Product Sourcing Grocery Products The Directors believe that the sale of branded food, FMCG and other grocery products at sensational prices delivers significant savings to the customer when compared to comparable products from other grocery retailers. A high proportion of the grocery products in B&M stores are branded and sourced directly from leading FMCG suppliers (such as Procter & Gamble, Unilever, Pepsico and Mondelez), with a limited reliance on overstock and clearance items. The Group is a growth channel for these leading FMCG suppliers. As the Group increases its trade in these FMCG grocery products, it is able to trade on increasingly more attractive terms.

The increased size of the Group together with FMCG companies becoming more supportive of value retailers, has allowed the Group, over time, to continuously source directly from these FMCG companies as opposed to using wholesalers or buying groups. This has helped limit the Group’s reliance on clearance and overstock products.

Non-Grocery Products The Group has an ongoing strategy of sourcing non-grocery products directly from manufacturers and suppliers in the Far East (principally China) that allow it to disintermediate UK importers and distributors. With the exception of those non-grocery categories where there are strong brands available, such as electrical, toys and stationery, non-grocery products are largely designed by the Group’s 10-strong in-house design team who are responsible for developing and merchandising private label products and their packaging. The Group works directly with its suppliers in the Far East to source these products in the most cost efficient manner and sell them under these private label brands. The Group also places particular emphasis on the packaging of its products from China. It employs five full-time packaging designers, who are dedicated to ensuring that products are presented in a contemporary and attractive manner. By offering a broad range of private label products, the Group seeks to provide its customers with a wide assortment of attractively-priced products, which also typically offer higher margins than grocery or leading brand products. The Group’s private label products are generally priced lower than similar leading brand products at its stores. However, because the suppliers do not incur marketing and advertising expenses on private label products and because the Group can order them in bulk, it can purchase private label products at lower prices than similar leading brand products. The Group’s strong and well-resourced in-house buying team is focused on making informed sourcing decisions, while keeping pace with evolving customer demand, thus enabling the Group to respond quickly to sales patterns observed in B&M stores.

Seasonal products are sourced six months in advance of the commencement of the relevant season. Planning for the following Christmas trading season starts in February when buyers place orders and pay deposits in advance to allow suppliers time to produce inventory. The Group starts to receive Christmas stock in August. Other than seasonal products, the Group typically purchases only twelve weeks’ worth of stock on any given new product line. This limits its risk of buying slow selling product and the business has a “clear as you go” policy towards slower selling product.

Suppliers The Group maintains strong relationships with a broad range of FMCG and non-grocery suppliers. The Directors believe that the breadth of its supplier basis is a competitive advantage. In total, the Group purchased from 1,411 suppliers in the year ended 29 March 2014. In the year ended 29 March 2014, Multi-Lines, the Group’s largest individual supplier, accounted for 5.8% of the Group’s total cost of sales and the Group's top five, 10, 20 and 30 suppliers (excluding Multi-Lines) accounted for 10%, 17%, 26% and 31%, respectively, of the Group’s total cost of sales. Eight of the Group’s ten largest suppliers of stock (excluding Multi-Lines) are well-known FMCG companies. The Directors believe that aside from the main branded FMCG companies, most of the products offered for sale by the Group could be sourced from alternative suppliers. Even for the leading brand FMCG companies, the Directors believe that there is typically a competing brand with alternative channels of sourcing in the event of any supply disruption.

In-house buying team The Group has developed a strong and well-resourced in-house buying team, composed of over 100 people as of 29 March 2014, that is capable of making informed sourcing decisions. The buyers currently have an average of

58 11 years of industry experience and five years of experience with the Group. The buying team also includes in- house merchandising, import and design teams responsible for designing, importing and merchandising private label and other non-grocery products. Each buyer is highly focused, and is responsible for on average 220 SKUs each out of a total of approximately 5,500 live SKUs. The buying team’s mission is to source high quality products from suppliers that will fulfil customer needs at sensational prices. This process involves regular, frequent reviews and adjustments within each product category using information regarding customer preferences gained through EPOS sales data, market analysis and feedback from store managers.

Flexible Far East Supply Chain The Group has a flexible and entrepreneurial approach to the sourcing of its non-grocery products from the Far East (principally China). It has a strong network of suppliers in the Far East from whom it sources approximately two-thirds of its non-grocery products for its B&M stores, either directly through its buyers from a network of over 300 manufacturers in the Far East, or through its Hong Kong based joint venture company, Multi-Lines. Multi-Lines is a sourcing agent based in Hong Kong for products from the Far East and liaises with over 20 South East Asian manufacturers. The Group owns a 50% shareholding in MultiLines and the other 50% is owned by its Hong Kong management team. Multi-Lines designs, sources and exports a wide range of products to the Group and to a lesser degree, other retailers that do not compete with the Group. There are current plans to recruit a dedicated team at Multi-Lines to service the JA Woll Group.

Direct sourcing for non-grocery products from the Far East was implemented in 2005 and over time the Group’s sourcing has moved from reliance on UK importers to direct sourcing for the majority of its non-grocery products. The majority of non-grocery products sourced from the Far East are machine-made. The Group typically pays deposits to Far East suppliers that can range from 10 to 30% of the total order value, and then the balance upfront in cash prior to the delivery of the products, rather than asking for credit or delayed payment terms. Orders typically have an approximate 90 day lead time (approximately 60 days to manufacture and approximately 30 days to transport to the UK).

The Group's Far East sourcing platform is build on the following four tenets: • Dual sourcing: where possible, the Group tries to maintain relationships with two or more manufacturers for any one particular product type. • Minimising stock risk: other than seasonal merchandise (such as Halloween or Christmas), the Group prefers to commit to production volumes “little and often” rather than long term commitments of six months. • Long term relationships: The Group benefits from long-term relationships of management with many of its Far East suppliers, with several relationships dating back 20 years. The Group has informal arrangements with some of its Far East suppliers, where the factory will not entertain orders from other UK retailers because of the volume that the Group purchases and the factory's reliance on the Group’s product development and packaging capability. The Group’s Far East suppliers are flexible and can produce similar products year after year, notwithstanding that the Group’s design team constantly refreshes the product range with up to date and contemporary designs, colours and motifs. The Group’s design teams closely monitor product trends in the USA and Europe, through visits to trade fairs, lifestyle magazines and keeping abreast of high street trends. Customer preferences are communicated into internal design briefs (or “mood boards”) which are followed by the buyers. While the Group avoids selling fashion-led clothing or footwear, it does endeavour to ensure that its housewares, home décor and soft furnishings are in line with current consumer fashions. The teams then work closely with these suppliers to develop private label products that deliver high quality and excellent value for money. The Group is often able to get these products from design and briefing to on sale in stores in 13 weeks. • Close monitoring of quality, timeliness and packaging by Multi-Lines.

The Group’s sourcing strategy is to remain flexible and risk averse even when, for example, following contemporary customer tastes in home décor. The Group prefers to commit to only approximately twelve weeks’ worth of sales when introducing a new product design. The Group then waits to gauge customer reaction before committing to further volumes. On those occasions where the Group receives sales data that a product has not been well-received by the customer, the Group acts promptly to reduce the selling price of the item. This entrepreneurial trading strategy allows the Group to dispose of disappointing products quickly rather than allowing shelves to be stocked with slow moving product. Conversely, the Group can arrange for repeat shipments of well-received new lines within a few weeks of that product first going on sale. Even where rates of

59 sale are acceptable, the Group often decides to refresh a product prior to repeating its order. A “refresh” may consist of packaging, improvements or a refresh of the products’ surface decoration and colouring. Unlike some of the larger retailers, the Group does not commit to a full six month static merchandise plan. It prefers to continually improve its product ranges in order to provide its shoppers with new options, which it views as an essential component of its ability to deliver like-for-like revenue growth.

The Directors believe that the Group’s policy of maintaining tight control on the number of live SKUs within each product category is highly effective in delivering its popular product ranges. This SKU count discipline requires buyers to immediately address any slow moving products. Its “one-in, one-out” strategy requires the buyers to keep the Group’s product ranges constantly refreshed and in line with customer demand.

Warehousing and Distribution The Group operates a well-invested warehouse and distribution system that currently consists of its principal distribution centre in Speke near Liverpool (“Speke 1”), a second distribution centre in Speke that commenced operations in February 2014 (“Speke 2”), secondary distribution centres in Blackpool and Knowsley and an in- house fleet of heavy goods vehicles for store deliveries and intra-warehouse transfers. This is reflected by the high level of on time despatches from distribution centres to stores (98%) and the low picking error rate (0.3%) for the period from 1 August 2011 to 3 March 2014.

In the medium term, the Group is preparing to open a new distribution centre in Southern England to support the roll-out of new stores there. The Directors believe that a southern distribution centre would be partly self- financing (through reduced transportation costs), given the Group’s expansion plans in Southern England. The Group has agreed non-binding heads of terms for the lease of an additional distribution centre further south as part of its expansion into Southern England and has budgeted £6.5 million for the year ending 25 March 2017 for the costs associated with such a distribution centre. Currently, this distribution centre is not expected to be necessary or operational until the year ending 25 March 2017. The Directors believe that the Group currently already has the infrastructure necessary to support up to 500 stores across the UK, and adding a third distribution centre in Southern England in 2017 would enable the Group to progress towards its eventual target of 850 stores in the UK.

B&M stores use an automated stock replenishment system that facilitates the maintenance of store inventory levels. It enables store and head office merchandisers to monitor and adjust inventory levels efficiently. B&M stores’ fully integrated EPOS system delivers granular, in-store sales and margin data to store management and its handheld technology empowers store managers to make informed inventory decisions. The system automatically submits orders to its distribution centres by comparing real-time information on inventory balances in stores against required stock levels set by local store managers. Selected B&M stores and head office employees have the ability to make adjustments to the required branch stock level when necessary. B&M stores seek to maintain high stock availability while managing inventories efficiently. B&M stores primarily restock their stores in the mornings or evenings to the fullest extent practicable, in order to trade peak periods with fully stocked shelves and minimise the impact of restocking on customers.

Distribution Centres The Group opened Speke 1 in August 2010, at the Group's headquarters in Liverpool. Speke 1 provides 70,000 pallet spaces of storage running 24 hours a day on a three shift rotation, with a capacity of 620,000 square feet. A bespoke version of a MICROS system is used. All “full pallet” moves within the distribution centre are controlled by a scanned barcode system on a warehouse management system (“WMS”) that controls forklift truck workflows on a real-time radio frequency communications platform. The picking process is a manual “Pick-by-Label” system that allows easy flexing of capacity during seasonal peaks. Speke 1 operations are based on a ‘keep it simple’ premise. This operates as the primary distribution centre for B&M stores’ grocery products.

Speke 2 opened in February 2014 and provides 500,000 square feet of warehousing space and is sited diagonally to Speke 1. It is a high density site, providing 50,000 pallet spaces that will hold 2,000 SKUs of non-grocery products. It currently runs 16 hours a day on a two shift rotation. The Speke 2 site location was determined based on the proximity to Speke 1, and the ability to leverage central functions and move staff as needed across the two Speke sites. The Directors believe that this investment was a critical step for the Group because it creates more capacity and is more efficient. To ensure a smooth move, the Group undertook a gradual ramp-up of the Speke 2 facility. The Speke 2 facility is currently fully operational and is now the primary distribution centre for B&M stores’ non-grocery products.

60 The Blackpool and Knowsley distribution centres are used primarily for seasonal overflow of imported non- grocery products for B&M stores. Both of these sites are 1930s industrial facilities with low building height. While picking processes are manual, the putaway and control of inventory is controlled on the MICROS WMS. The Blackpool facility, which is leased through to the end of 2014, provides 40,000 pallet spaces of storage and the Knowsley facility, which is leased through to August 2015, is used as an open plan distribution centre with 22,000 pallet spaces of storage, laid out for bulk unracked storage/picking.

Distribution The Group received the equivalent of approximately 20,500 twenty-foot equivalent full container loads of imported products, primarily via the Liverpool docks, in the year ended 29 March 2014. The Group contracts for transportation of containers from the docks to the appropriate distribution centre with two main providers.

As of 29 March 2014, the Group operates a fleet of 161 heavy goods vehicle tractor units and over 229 trailers. The Group has been making new investments in the fleet in the last two years. For the two years ended 29 March 2014, the Group took delivery of 120 new Scania tractor units and 130 new trailers. As of 29 March 2014, of the 161 HGV tractor units, 120 are less than 24 months old and of the new trailers, 110 are double-deckers. Despite the Group’s expansion into Southern England, variable transport costs as a percentage of revenue increased by only 0.1 percentage points, from 1.8% for the year ended 30 March 2013 to 1.9% for the year ended 29 March 2014. Variable warehouse costs as a percentage of revenue were stable over the same period at 1.5% in each of those two years. In addition, the Group has opened an in-house vehicle testing and servicing centre and recycling centre that was built at a capital expenditure cost of approximately £2 million.

The Group operates a dynamic store delivery schedule that flexes to accommodate daily or seasonal fluctuations. The Group has recently started a backhaul project, although this programme is currently in its infancy.

Customers and Customer Service Customers The Group’s wide range of branded FMCG products offered at sensational prices and a strong non-grocery product offering across a range of price points, has enabled the Group to attract and develop a broad and loyal customer base. The Group has a diversified customer base with representation across all socio-economic groups in the UK. Based on a customer survey conducted in October 2012, management believes that approximately 42% of customers of B&M stores were in the ABC1 socio-economic groups (of which 15% were in the AB group and 27% were in the C1 group), and approximately 58% of customers were in the C2DE socio-economic groups (of which 27% were in the C2 group and 31% were in the DE group), compared to the general UK population at the time, of which 27% were in the AB group, 29% were in the C1 group, 21% were in the C2 group, and 23% were in the DE group. Families with children living at home are represented in the Group’s customer base to a disproportionate extent compared to the UK general population. Based on a customer survey conducted in October 2012, management also believes that approximately 56% of B&M store customers have children living at home, approximately 30% have no children and approximately 14% have children who have left home. The Directors believe that the typical profile of a family customer is one who visits the store both to purchase specific branded products offered at sensational prices as well as to engage in a “treasure hunt” for bargains across the entire offer. The Group also believes B&M stores are a “destination” for homewares and seasonal products, particularly in the larger stores. Additionally, the Group’s card transactions as a percentage of revenue have increased from 36% to 43% to 48% in the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively, which the Directors believe indicates the Group’s customers are coming from a broader demographic than previously. Shoppers from the C2DE socio-economic groups tend to pay in cash, whereas those from the ABC1 socio-economic groups tend to pay using cards.

The Directors believe that customers shop at B&M stores for a number of reasons. The Group’s in-town/high street B&M stores typically attract customers from a local catchment of approximately four kilometres, based on the convenience aspect of the Group’s proposition, while customers at the Group’s out-of-town stores typically travel slightly further for a broader range of products. The Group’s non-grocery product offering is intended to stimulate impulse purchases as it is continually changing. Based on a customer survey conducted in October 2012, management believes that 47% of purchases are an impulse purchase. These impulse purchases are supported by approximately 100 new SKUs introduced in B&M stores every week. The Directors believe that B&M store customers recognise the strength of its attractive price proposition and see a clear price advantage versus other retail formats and enjoy the constant refreshing of the product range, especially in non-grocery.

61 The Directors believe that B&M stores’ diversified product offering and attractive price proposition has played an important role in building a strong and loyal customer base, which is evidenced by the number of customers making frequent and planned visits to B&M stores. According to a PDIQ exit survey conducted in December 2013 of 200 store customers, the three most important reasons for customer visits were price, convenience and brands, as detailed in the chart below, which are all elements that the Group emphasises in its business strategy.

Very good prices 97

Convenient location 63

Brands 1 know 40

Easy to find your way around 37

A quick way to shop 35

Very good for seasonal products 17

Helpful, professional staff 15

Stylish products 13

Has products others don’t sell 8

Staff that 1 know 2

Don’t know 1

Other reason 2

Not stated 1

Based on the same PDIQ customer survey, approximately 81% of customer visits to B&M stores were planned visits, and approximately 64% of B&M shoppers visit a B&M store at least once a fortnight. According to that survey, approximately 42% of B&M shoppers visited a B&M store at least once a week. These visit frequencies were broadly similar for both town centre and out-of-town sites. PDIQ measured the Group’s customer advocacy through a net promoter score (“NPS”), which was gathered through exit surveys. The Group’s NPS score measured by this method was 68% as of December 2013.

The Group recorded approximately 101 million, 118 million and 138 million customer transactions per annum for the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively, with an average transaction value of £8.84, £9.83 and £10.74 for those years.

Customer Service The Group is dedicated to providing an in-store experience focused on the customer and meeting customers’ needs in order to ensure customer satisfaction. The Group has implemented several procedures and initiatives in B&M stores focused on enhancing customer satisfaction and providing an opportunity to increase sales. For example, store management makes it a priority that B&M stores are fully stocked by the peak trading time of 10 a.m., with restocking taking place primarily in the mornings or evenings to the fullest extent practicable in order to minimise the impact of restocking on customers during peak trading periods. In addition, a customer standards review is conducted each morning to seek to ensure that B&M stores meet internal standards. The review is focused on ensuring that all products are ticketed appropriately and are in their correct locations. B&M stores also have a “queue busting” policy, whereby additional cashiers are opened when a queue forms in store, to reduce customer wait times.

In the year ended 29 March 2014, approximately 2,000 B&M store colleagues received customer service training at workshops run by the Group. The Group also produces in-house training videos and employee handbooks, as well as running regular briefings on health and safety, fire regulations and customer service. B&M stores offer its customers a “No Quibble” refund policy within 28 days in addition to their statutory rights. It also accepts all debit and major credit cards, with contactless card payment also available should the customer so desire.

Recently Acquired German Operations On 30 April 2014, the Group acquired 80% of the shareholding in the JA Woll Group, a large German out-of- town general merchandise discount retailer, with stores located primarily in north-western Germany, for cash consideration of approximately £66 million. The JA Woll Group in its audited financial statements for the year

62 ended 31 December 2013 (converted to IFRS), recorded revenue of €163.3 million, EBITDA of €13.4 million and Adjusted JA Woll EBITDA of €15.1 million (calculated as EBITDA adjusted to exclude exceptional transaction bonuses for JA Woll management). The JA Woll Group’s headquarters are located in Soltau, north- west Germany, and the JA Woll Group owns its own distribution centre, valued at approximately €10 million. The Directors believe that the German discount retail sector is the largest in Europe, that the German general merchandise discount market is fragmented and underdeveloped, and that there is space in the market for a general merchandise discount retailer as customers continue to focus on value, creating a significant long-term roll-out opportunity in Germany.

The JA Woll Group offers products across similar product categories to those offered in B&M stores: household goods, food, seasonal goods, plants, textiles, drugstore items, footwear, and beverages. The JA Woll Group does not currently offer its own private label products, except for fertiliser, and has a limited direct sourcing capability. The JA Woll Group grocery offering generates a lower percentage of revenue than that of the Group’s UK operations, but its seasonal gardening offering generates a higher percentage of revenue than that of the Group’s UK operations. Overall, the JA Woll Group has slightly higher gross margins than those of the Group’s UK operations.

JA Woll Group stores are currently all located in out-of-town locations, with an outdoor sales area facing the adjacent roads in order to attract customers with a visible assortment of outdoor garden products and target locations adjacent to Aldi and Lidl. As of 29 March 2014, the JA Woll Group operated 49 stores under the brand names JAWOLL and HAFU. In addition, five other stores were operated by a franchisee of the JA Woll Group, although further franchising is not foreseen. The JA Woll Group has nearly doubled its store portfolio over the past six years, increasing its total number of stores from 27 in 2007 to 49 as at 29 March 2014. The Group plans to build on this strong position and further develop the JA Woll Group's business and expand its footprint in Germany by sharing operational best practices and leveraging the Group's established Far East sourcing operations in order to provide the JA Woll Group with a competitive advantage, in the form of a non-grocery product offering that represents sensational value for German customers.

Prior to the acquisition, all buying activities were conducted from the JA Woll Group's headquarters in Soltau. Direct imports from Asian suppliers made up only approximately 10% of the JA Woll Group's total sourcing volume. The Group is planning on leveraging its strong supplier relationships and Far East sourcing expertise to accelerate the JA Woll Group's future growth and improve financial returns.

The JA Woll Group will continue to be run by its current strong management team, who retain a 20% stake in the business. The remaining minority shareholders have the right to sell their shares in the JA Woll Group to the Group and the Group has the right to purchase the shares of the remaining minority shareholders.

As at 29 March 2014, the JA Woll Group had 1,139 employees, of which 706 were employed on a part time basis. Approximately 80% of the JA Woll Group’s employees are employed at the store level.

Marketing The Group does not engage in material levels of advertising, and has an efficient, low-cost marketing strategy, as the Directors believe that the Group’s online presence, use of social media and in-store proposition are sufficiently strong to drive customer engagement, encourage favourable word-of-mouth recommendations by existing customers and attract new customers. The Group’s continuous change of its products on offer also encourages frequent and repeat visits.

The Group’s primary marketing spend is incurred on its non-transactional online presence, through the B&M website (www.bmstores.co.uk) and social media. The B&M website (www.bmstores.co.uk) displays SKUs and prices online, where the Group’s low price points are well-positioned to provide price transparency against its competitors. As of 29 March 2014, there were over 2,000 SKUs on B&M’s website (www.bmstores.co.uk). The Group had an average of over 1.2 million unique monthly website visits for the period from 1 January 2013 to 31 January 2014. (Source: Google Analytics). The Group’s marketing activities principally comprise choreographed social media campaigns that are used to drive awareness of new store launches, build brand engagement and generate interest in specific product offers, for example, through customer competitions. As of 12 March 2014, the Group had over 300,000 Facebook likes.

The Group’s approach to increasing customer loyalty is also based on monitoring changes in customer requirements and preferences, changes in customer spending and, more generally, changes in customer behaviour. In response to weekly sales data, the Group aggressively flexes its product mix and the display of

63 products on shelves and the availability and range of special offers to take advantage of seasonal trends and shifts in consumer preferences. To understand the needs of the customers that frequent each of its stores better, store management is empowered with real time data to make fact based decisions about inventory levels, which includes access to a fully integrated electronic point of sale system that delivers granular, in-store sales and margin data to store managers via a handheld terminal.

Employees The following table sets out the number of the Group’s full-time equivalent employees as of 31 December 2011, 2012 and 2013 by function.

As of 31 December 2011 2012 2013 Store base head count ...... 5,692 7,248 9,272 Administration and distribution ...... 319 382 483 Total ...... 6,011 7,630 9,755

The labour-intensive nature of the retail industry and the high number of employees involved in customer contact makes it important to have a suitably trained and motivated workforce. Consequently, the Group seeks to hire customer- and service-oriented employees and to offer competitive compensation and training programmes. The Group also aims to provide career growth and development opportunities in order to maintain high retention levels despite the traditionally fairly high turnover rate associated with the retail industry. For example, the Group aims to fill managerial positions by promoting its existing employees. The Group also offers vocational training and support.

The Group also hires employees on a temporary basis to assist with stock replenishment at B&M stores and with other tasks and to fill temporary vacancies (for example, due to sickness or vacations), as well as during peak trading periods, such as Christmas. B&M stores do not utilise “zero-hour” contracts.

The Directors believe that the Group’s relations with its employees have been and continue to be good. As of 29 March 2014, approximately 700 of the Group’s employees were members of a trade union. There are no collective bargaining agreements between the Group and its employees. The Group has not experienced any strikes or work stoppages by its employees in recent years.

Information Technology The Directors believe that B&M stores have an efficient, integrated, resilient and scalable IT infrastructure and applications that cover all major aspects of its business, including in-store systems, product management, warehousing, logistics, human resources, finance and other administrative systems. Its key IT systems include Nova ERP by MICROS (which produces the financial ledger and enables management of all product-based activities), Retail J (an electronic point of sale EPOS application), Datafreight (which controls and audits the movement of imported stock), Velocity from Voiteq (which enables real time control and visibility of pallet movements by forklift trucks within the distribution centres), Snowdrop and KCS (human resource and payroll applications) and Astro T&A (a time and attendance management system).

All B&M stores currently have a broadband connection to the head office that is managed by Vodat International. A 3G backup facility is also in place at B&M stores. Other key IT infrastructure includes fully managed 100mbps multiprotocol label switching technology that speeds up network traffic flow to stores and distribution centres, a backup network for critical applications, and a dual site setup for card payment authorisations.

The Group has a disaster recovery back-up site in Leeds. The critical Nova ERP servers are backed up to the Leeds site on a daily basis. This core backup solution is also complemented by the transfer of data on other servers to a tape library held offsite. In the event of a hardware failure the Group has a contract with Phoenix IT Group, where Phoenix IT Group will provide a service level agreement of four to eight hours.

Intellectual Property The Group owns the rights to “B&M”, “B&M Bargains”, “JAWOLL” and “HAFU”, which are the Group’s most important trademarks and which the Group has registered (in word form) with the appropriate authorities in the UK and Germany. The Group uses the “B&M” name as a trade name, as a trade mark in connection with various products and as a service mark. The Group has also registered or applied to register numerous registrable designs

64 in connection with its private label products in a variety of non-grocery categories. The Group has no patents. It owns various web domain names, particularly www.bmstores.co.uk and www.bandmretail.com. The Group regards its trademarks and other intellectual property rights as valuable assets and takes appropriate action to protect and will, when necessary, enforce them.

Insurance The Group maintains insurance policies on its buildings, machinery and equipment, and distribution centre inventories covering property damage (including damage due to windstorms, earthquakes, floods and other natural disasters) and business interruption (for losses that flow from the loss of otherwise insured property), primary and excess public liability, and product liability coverage. In addition, the Group also maintains insurance policies covering directors’ and officers’ liability, employers' liability, general liability, and policies that provide coverage for risks during the shipment of products. While the Directors believe that the Group’s insurance coverage is in accordance with UK retail industry custom and practice, its policies are subject to deductibles, exclusions and limitations that could affect its ability to make a claim. In addition, its business may be affected by certain risks for which full insurance cover is either not available or not available on commercially reasonable terms. The Group is not insured against terrorist acts and war related events at its premises, radioactive contamination, and electronic risks, including cyber-attacks. In addition, the Group also self-insures stock at its stores (whereas inventory at its distribution centres is covered by insurance policies). The Group’s insurance policies are provided by a number of major international insurance companies, such as Allianz Insurance.

Property B&M stores, JA Woll stores, the Group’s distribution centres in Speke, Blackpool and Knowsley and its headquarters are all leased. The freehold of the JA Woll Group’s distribution centre is owned by the Group. Related parties of the Group own the freehold (or superior lease) of 30 of the sites (as at 29 March 2014) where B&M stores are located, the site of Speke 2, and the vehicle maintenance area next to Speke 1. The rent per square foot at Speke 2 is the same as that of the primary Speke distribution centre, which is owned by an unrelated third party. It is expected that related parties would own the freehold of the new southern distribution centre. If the Company proceeds with leasing that site for its new southern distribution centre, and related parties own the freehold, that could constitute a related party transaction under the FCA’s Listing Rules, in which case the Company would seek shareholder approval before progressing with the transaction if required to do so by the FCA’s Listing Rules. JA Woll management owns the freehold of certain sites where JA Woll stores are located. Rent for the year ended 29 March 2014 was 4.4% of revenue, of which B&M store rent accounted for 4.1% of revenue. Under the Senior Facilities, the lenders have a charge over the Group’s leasehold interests in Speke 1 and its stores. As part of the Refinancing under the New Facilities, the lenders will take a charge over Speke 1 and Speke 2 and its stores in the UK.

Individual B&M store leases vary as to their terms, rental provisions and expiration dates. The lease agreements for B&M stores typically last between five and 15 years, with rent renewals typically every five years if relevant.

The average unexpired term of all leasehold B&M stores as at 29 March 2014 was approximately 8 years and 3 months. The table below shows the maturity profile for lease expiries for B&M stores as of 29 March 2014.

0-4 years 5-8 years 9-12 years Number of stores ...... 69 129 98

Over the three year period ended 29 March 2014, the Group settled 46 five yearly rent reviews and it experienced a weighted average rent increase of a total of 2.8% for these rent reviews. Of those 46 reviews, 39 resulted in nil uplift as the landlord was not able to demonstrate rental growth for the location over the preceding five year period.

Competition As a UK general merchandise discount retailer, the Group competes with other general merchandise discounters (principally Home Bargains, Wilkinson and Poundland) and supermarkets (including traditional and discount supermarkets), as well as specialist and online retailers in a number of individual product categories. Outside of the general merchandise discount retail sector, the Group faces competition from retailers of different sizes and with different sales strategies.

65 The UK grocery, single category specialist and general merchandise retail markets are highly competitive, particularly with respect to product range and quality, pricing, store location, convenience and design. The Directors believe that many of the Group’s competitors only compete with the Group with regards to certain of the products offered by the Group. For example, the Group competes with supermarkets with regards to its ambient grocery products and with specialist retailers with regards to its non-grocery products. The Group and certain other of its general merchandise discount retail competitors have sought to compete with these retailers by offering more attractive prices to consumers than non-discount grocery and specialist retailers, or by creating a single price £1 product offering. For more information on the competitive environment in which the Group operates, see Part 1: Industry Overview.

Regulatory Matters The Group’s operations are subject to governmental regulation from national and EU regulatory authorities concerning, among other things, export and import quotas and other customs regulations, consumer and data protection, the advertisement, promotion and sale of products, taxation, product safety, the health, safety and working conditions of the Group’s employees, the safety of the Group’s stores and their accessibility for the disabled, environmental matters and the Group’s competitive and marketplace conduct.

The products which the Group sells are subject to various consumer protection laws in the national market and across the EU, which has an effect on the pricing of products, product descriptions, promotional activity and product safety among other things.

Environment The Directors believe the Group complies in all material respects with the environmental standards applicable to it under applicable law and regulations. The Group has not been involved in any material legal proceedings that are, or have been in the 12 months preceding the date of this document, related to environmental protection issues. The Group is periodically subject to environmental audits or assessments performed by governmental authorities, none of which has resulted in any material expenses. The Group conducts due diligence relating to environmental matters as part of its due diligence process undertaken in connection with leasing new B&M store sites.

Corporate Social Responsibility The Group recognises that it has a responsibility to ensure that its business is conducted in a socially responsible manner, resulting in a high standard of social and environmental behaviour.

The Group is committed to achieving good environmental practice and strives to minimise adverse environmental impacts. The Group endeavours to achieve these goals by ensuring the efficient use of materials and energy, recycling wherever possible, minimising waste and ensuring compliance with relevant environmental legislation. The Group recycles all store and distribution centre waste paper, cardboard and plastics with approved and licensed recycling companies. The Group has a programme of investment in double-decker HGV trailers in order to reduce its carbon footprint. In stores, the Group specifies energy efficient high frequency light fittings for new stores and refurbishment projects, in order to reduce electricity consumption.

The Group also regularly reviews sources of supply to seek to ensure that its suppliers in the Far East operate fairly and ethically. The Group's code of conduct stipulates that all workers in factories which manufacture private label products for the Group must be over the minimum working age in the relevant jurisdiction. The Group does not source from high risk countries, such as Bangladesh.

The Group employs a team of health and safety officers to ensure that a safe and healthy environment is provided for its employees and customers. The Group endeavours to ensure that its suppliers, manufacturers and licensees also provide reasonable working standards for their employees and do not contravene the employment laws of their countries.

The Group is committed to a policy of equal opportunities for staff at all levels and provides direct employment and career development to thousands of employees across the UK. The Group is dedicated to training and development, and has invested significant amounts in training programmes. The Group also provides opportunities for large numbers of people seeking flexible or part-time hours.

66 Dividend Policy The Directors intend to adopt a progressive dividend policy, targeting initially a payout ratio of approximately 30% to 40% of net income on a normalised tax basis.

Assuming that there are sufficient distributable reserves available at the time, the Directors intend that the Company will pay an interim dividend and a final dividend in respect of each financial year in the approximate proportions of one-third and two-thirds, respectively, of the total annual dividend. The first dividend to be paid by the Company is intended to be the interim dividend, which will be pro rata for the period from Admission to 30 September 2014. This first dividend is expected to be paid in January 2015. The Directors intend to declare a final dividend in May 2015 in respect of the year ending 28 March 2015 which is expected to be paid in July 2015.

67 PART 3: DIRECTORS, SENIOR MANAGERS AND CORPORATE GOVERNANCE

Directors The Company’s board of Directors (together, the “Board” and each, a “Director”) are:

Date appointed Name Age Position to Board Notice Period Sir Terence (Terry) Patrick Leahy(1) . . . 58 Chairman 19 May 2014 Three months Sundeep (Simon) Arora ...... 44 Chief Executive Officer 19 May 2014 Twelve months Paul Andrew McDonald ...... 48 Finance Director 19 May 2014 Six months Thomas Martin Hübner ...... 56 Senior Independent Non-Executive 29 May 2014 Three months Director Ronald (Ron) Thomas McMillan . . . 61 Independent Non-Executive 29 May 2014 Director Three months Kathleen Rose Guion ...... 62 Independent Non-Executive 29 May 2014 Director Three months Henricus (Harry) Brouwer ...... 55 Independent Non-Executive 29 May 2014 Director Three months David Andrew Novak(1) ...... 45 Non-Executive Director 19 May 2014 Three months

(1) A representative of CD&R.

The business address of each of the Directors is The Vault, Dakota Drive, Estuary Commerce Park, Speke, Liverpool L24 8RJ, United Kingdom.

The management expertise and experience of each of the executive Directors (“Executive Directors”) is set out below:

Sir Terence (Terry) Patrick Leahy, Chairman Sir Terry is a senior advisor with CD&R. He is also currently a Director of Blackcircles.com. Previously Sir Terry worked at Tesco plc for 32-years during which he served in a number of senior positions, including Chief Executive Officer from 1997 to 2011. Sir Terry was Chancellor of The University of Manchester Institute of Science and Technology, his alma mater, from 2002 until 2004, when he became a Co-Chancellor of the newly- formed University of Manchester. Sir Terry was honoured with a Doctor of Science from Cranfield University in June 2007.

Sundeep (Simon) Arora, Chief Executive Officer Simon has been Chief Executive Officer of the Company since January 2005. Prior to this, he was co-founder and Managing Director of Orient Sourcing Services Ltd (a wholesale houseware business), and held various positions with McKinsey & Co., 3i plc and Barclays Bank PLC. Simon was educated at Manchester Grammar School and Cambridge University, where he took a degree in law.

Paul Andrew McDonald, Finance Director

Paul joined the Company as Finance Director in 2011. He has over 20 years of experience in the discount retail sector having held senior roles at Littlewoods, Ethel Austin and TJ Hughes. Paul was educated at Leeds University, where he read Economics and Economic History. Paul is a chartered certified accountant.

The management expertise and experience of each of the non-executive Directors (“Non-Executive Directors”) is set out below:

Thomas Hübner, Senior Independent Non-Executive Director Thomas joined the Company as the Senior Independent Non-Executive Director in June 2014. Prior to joining the Company, he was a Director of Carrefour SA, and held senior executive roles in McDonald’s, Prodega AG, Metro Cash & Carry International GmbH, Theo Müller, Citrus International and Contract Farming India. Thomas is a graduate of Hotelschool Belvoirpark Zürich and holds an M.B.A. from University of St. Gallen, Switzerland.

Ron McMillan, Independent Non-Executive Director Ron joined the Company as an Independent Non-Executive Director and Chairman of the Audit Committee in June 2014. He is also currently a Director of N Brown Group Plc and 888 Holdings Plc, and acts as a consultant

68 to PricewaterhouseCoopers in the Middle East. Previously, Ron was a Partner in PricewaterhouseCoopers for 28 years during which he served as Northern Regional Chairman for the United Kingdom firm and Deputy Chairman for PricewaterhouseCoopers in the Middle East. Ron is a graduate of University of Reading and a fellow of the Institute of Chartered Accountants of England and Wales.

Kathleen Guion, Independent Non-Executive Director Kathleen joined the Company as an Independent Non-Executive Director in June 2014. She is also currently a Director of The Pantry, Inc. and True Value Company. Prior to joining the Company, she was Division President and Executive Vice President of Dollar General Corporation, and held senior positions in E-Z Serve Corporation, Devon Partners, Duke and Long Distributing and 7-Eleven Corporation. Kathleen was educated at Loyola University and is a Governance Fellow of the National Association of Corporate Directors in the United States.

Harry Brouwer, Independent Non-Executive Director Harry joined the Company as an Independent Non-Executive Director in June 2014. He is also currently the Executive Vice President of Unilever Germany, Austria and Switzerland. Previously, Harry held senior roles at Bestfoods prior to its integration into Unilever. Harry is a graduate of Michigan State University, United States of America and holds an M.B.A. from Erasmus University, The Netherlands.

David Andrew Novak, Non-Executive Director David is a partner at CD&R and is a member of the Investment and Management Committees. David is also currently a Director of British Car Auctions and a member of the board of trustees for The American School in London and the Valerie Fund. David was previously a member of the Supervisory Board of Rexel S.A., and a director at Jafra Cosmetics International Inc. Brakes Group and HD Supply, among others. Previously, David worked in the private equity and investment banking divisions of Morgan Stanley. David is a graduate of Amherst College and holds an M.B.A. from Harvard Business School.

Senior Managers In addition to the executive management appointed to the Board, the following senior managers (each, a “Senior Manager”) are considered relevant to establishing that the Company has the appropriate expertise and experience for the management of its business:

Name Age Position Bobby Arora ...... 42 Trading Director Carl Brian Allen ...... 47 Operations Director Robert (Mike) Michael Benson ...... 47 Distribution Director Allison Dawn Green ...... 43 People Director

The business address of each of the Senior Managers is The Vault, Dakota Drive, Estuary Commerce Park Speke, Liverpool L24 8RJ, United Kingdom.

The management expertise and experience of each of the Senior Managers is set out below:

Bobby Arora, Trading Director Bobby has been Trading Director of the Company since January 2005. Bobby has over 15 years experience as a director, having co-founded Orient Sourcing Services Ltd (where he was responsible for buying merchandise from 1995 to 2004) and sat on the board of Lambert Howarth Group plc, the footwear and houseware company. Bobby was educated at William Hulme Grammar School.

Carl Brian Allen, Operations Director Carl has been Operations Director with responsibility for retail operations, central operations, health and safety, security, store development and human resources since joining the Company in January 2011. Carl was previously Operations Director at Alpha Tax and Duty Free, responsible for retail and catering operations across 20 airport terminals in the UK. Prior to joining the Company, Carl was Regional Manager for the Midlands and Northern England for Iceland Frozen Foods plc, having also held operational roles in internet shopping, merchandising and store development. Carl has 15 years of retail experience at J Sainsbury plc. Carl holds a Diploma in Management from the Institute of Leadership and Management.

69 Robert (Mike) Michael Benson, Distribution Director Mike has been Distribution Director with responsibility for all transport and warehouse functions since joining the Company in January 2011. Mike has over 30 years logistics experience in the supermarket and retail sectors, having previously held a number of supervisory and management roles at Safeway and ASDA supermarkets. Prior to joining the Company, Mike was responsible for servicing 350 ASDA stores as General Manager of their Doncaster distribution site, operated by Wincanton Plc.

Allison Dawn Green, People Director Allison has been People Director with responsibility for resourcing, HR, ER and learning and development since joining the Company in January 2014. Allison was previously Operations & People Director for the Youth Hostel Association from 2010 to 2014 with full responsibility for operations, food and beverage, capital developments, HR, learning and development, fundraising, youth engagement and volunteering. Prior to joining YHA, Allison was HR Director at Park Resorts Holiday Company from 2007 to 2010, and prior to this was HR Director at Roadchef Motorways from 2004 to 2007. Allison is a director at the County Sports Partnership Network and has a degree in Psychology and Theology.

Corporate Governance As the Company is seeking admission of its Shares to the premium listing segment of the Official List of the UKLA and to trading on the main market for listed securities of the London Stock Exchange, it is not subject to the Ten Principles of Corporate Governance of the Luxembourg Stock Exchange, which is the Luxembourg corporate governance regime recommended for companies listed on the Luxembourg Stock Exchange.

The Board is committed to the highest standards of corporate governance. Other than as set out in this section “Corporate Governance”, from Admission, the Company intends to comply with the UK Corporate Governance Code published in June 2010 by the Financial Reporting Council (the “UK Corporate Governance Code”). The Company will report to its Shareholders on its compliance with the UK Corporate Governance Code in accordance with the Listing Rules.

The UK Corporate Governance Code recommends that at least half of the members of the Board (excluding the Chairman) should be independent in character and judgement and free from relationships or circumstances which are likely to affect, or could appear to affect, their judgement.

The UK Corporate Governance Code also recommends that the Board should appoint one of the independent non-executive directors as senior independent director and Thomas Hübner, a Non-Executive Director, has been appointed to fill this role, conditional on Admission. The Senior Independent Non-Executive Director should be available to Shareholders if they have concerns which contact through the normal channels of the Chairman, the Chief Executive Officer or the Finance Director has failed to resolve or for which contact is inappropriate.

On Admission, the Board will be composed of eight members, consisting of the Chairman, two Executive Directors, four independent Non-Executive Directors and one other Non-Executive Director. For the purposes of the UK Corporate Governance Code, the Board does not regard Sir Terry Leahy as independent at the time of his appointment as Chairman by virtue of his role as senior adviser to CD&R. David Novak, as a Non-Executive Director nominated by CD&R, is also not regarded as independent for the purposes of the UK Corporate Governance Code.

The Chairman’s role is to ensure good corporate governance. His responsibilities will include leading the Board, ensuring the effectiveness of the Board in all aspects of its role, ensuring effective communication with shareholders, setting the Board’s agenda and ensuring that all Directors are encouraged to participate fully in the activities and decision making process of the Board. The Directors recognise that the Company does not comply with the recommendation of the UK Corporate Governance Code that the Chairman should be independent. However, the Directors believe that, in order to ensure maximum continuity in the Group’s transition from a privately owned company to a listed company, Sir Terry Leahy should remain as Chairman. In addition, the Directors believe that his significant knowledge and experience from his time as Chief Executive of Tesco plc will provide significant value and benefit to the Company. The UK Corporate Governance Code recommends that at least half of the Board (excluding the Chairman) should compromise independent Non-Executive Directors. Save with regard to the independence of the Chairman at the time of his appointment, the Board intends to comply fully with the requirements of the UK Corporate Governance Code and will report to shareholders on compliance with the UK Corporate Governance Code in accordance with the Listing Rules.

70 Committees of the Board The Board has established Nomination, Remuneration and Audit Committees, with formally delegated duties and responsibilities with written terms of references. From time to time, separate committees may be set up by the Board to consider specific issues when the need arises.

Nomination Committee The Nomination Committee assists the Board in discharging its responsibilities relating to the composition and make up of the Board. The Nominations Committee is responsible for evaluating the balance of skills, knowledge and experience on the Board, the size, structure and composition of the Board, retirements and appointments of additional and replacement directors and will make appropriate recommendations to the Board on such matters.

The UK Corporate Governance Code provides that a majority of the members of the Nomination Committee should be independent non-executive directors.

The Company’s Nomination Committee is composed of six members, four of whom are independent Non- Executive Directors (namely Ron McMillan, Thomas Hübner, Harry Brouwer and Kathleen Guion) and one is an Executive Director (namely Simon Arora). The chairman of the Nomination Committee is Sir Terry Leahy. The Company therefore considers that it complies with the UK Corporate Governance Code recommendations regarding the composition of the Nomination Committee.

The Nomination Committee will meet formally at least twice a year and otherwise as required.

Remuneration Committee The Remuneration Committee assists the Board in determining its responsibilities in relation to remuneration, including making recommendations to the Board on the Company’s policy on executive remuneration, determining the individual remuneration and benefits package of each of the Executive Directors and recommending and monitoring the remuneration of senior management below Board level.

The UK Corporate Governance Code provides that the Remuneration Committee should consist of at least three members who are all independent non-executive directors. In addition, the Chairman of the Company may be a member of, but not chair, the Remuneration Committee if he was considered independent on appointment as Chairman.

The membership of the Company’s Remuneration Committee comprises three Non-Executive Directors (namely Kathleen Guion, Ron McMillan and Harry Brouwer). The chairman of the Remuneration Committee is Kathleen Guion. The Company therefore considers that it complies with the UK Corporate Governance Code recommendations regarding the composition of the Remuneration Committee.

The Remuneration Committee will meet formally at least twice a year and otherwise as required.

Audit and Risk Committee The Audit and Risk Committee assists the Board in discharging its responsibilities with regard to financial reporting, audits and controls, including reviewing the Company’s annual financial statements, reviewing and monitoring the extent of the non-audit work undertaken by external auditors, advising on the appointment of external auditors and reviewing the effectiveness of the Company’s internal audit activities, internal controls and risk management systems. The ultimate responsibility for reviewing and approving the annual report and accounts and the half-yearly reports remains with the Board and the Shareholders, as applicable.

The Audit and Risk Committee is also responsible for (i) advising the Board on the Company’s risk strategy, risk policies and current risk exposures, (ii) overseeing the implementation and maintenance of the overall risk management framework and systems, and (iii) reviewing the Company’s risk assessment processes and capability to identify and manage new risks. When appropriate, the Audit and Risk Committee will meet with the Group’s Senior Managers in attendance.

The UK Corporate Governance Code recommends that an audit committee should comprise of at least three members who should all be independent non-executive directors, and that at least one member should have recent and relevant financial experience.

The membership of the Company’s Audit and Risk Committee comprises three independent Non-Executive Directors (namely, Ron McMillan, Thomas Hübner and Harry Brouwer). Ron McMillan is considered by the

71 Board to have recent and relevant financial experience. The chairman of the Audit Committee is Ron McMillan. The Company therefore considers that it complies with the UK Corporate Governance Code recommendations regarding the composition of the Audit and Risk Committee.

The Audit and Risk Committee will meet at least three times a year and otherwise as required.

Accordingly, save as set out above, on Admission the Company will comply with the provisions of the UK Corporate Governance Code and will report to shareholders on compliance with the UK Corporate Governance Code in accordance with the Listing Rules.

Model Code The Company has adopted, with effect from Admission, a code of securities dealings in relation to the Shares which is based on, and is at least as rigorous as, the Model Code set out in Annex 1 to Rule 9 of the Listing Rules. The code adopted will apply to the Directors and other relevant employees of the Group.

Relationship Agreements with CD&R Holdco and the Arora Family Immediately prior to Admission, it is expected that CD&R Holdco, Simon Arora, Bobby Arora and Robin Arora will hold, in aggregate, directly or indirectly, approximately 52.3%, 19.1%, 19.1% and 9.4%, respectively, of the voting rights attached to the issued share capital of the Company. Immediately following the Global Offer and Admission, it is expected that CD&R Holdco, Simon Arora, Bobby Arora and Robin Arora will hold, in aggregate, directly or indirectly, approximately 31.4%, 14.0%, 14.0% and 0.7%, respectively, of the voting rights attached to the issued share capital of the Company, assuming no exercise of the Over-allotment Option, and 29.0%, 13.5%, 13.5% and 0.0%, respectively, if the Over-allotment Option is exercised in full. CD&R Holdco, Simon Arora, Bobby Arora and Robin Arora will not have different voting rights attached to the Shares they hold.

On 12 June 2014, each of CD&R Holdco and Simon Arora, Bobby Arora, Robin Arora and SSA Holdco (the “Arora Family”) entered into Relationship Agreements with the Company which will, conditional upon Admission, regulate the ongoing relationship between the Company and CD&R Holdco and the Company and the Arora Family, respectively. The Relationship Agreements include provisions to ensure that the Company is able to conduct its business independently of CD&R Holdco and the Arora Family. The Relationship Agreements provide that each of CD&R Holdco and the Arora Family shall, and shall undertake that it, and each of its respective associates, will: (a) conduct all transactions and relationships with the Company at arm’s length and on normal commercial terms; (b) not take any action that would have the effect of preventing the Company from complying with its obligations under the Listing Rules; and (c) not propose or procure the proposal of a shareholder resolution which is intended or appears to be intended to circumvent the proper application of the Listing Rules.

The Relationship Agreements will continue for so long as CD&R Holdco or the Arora Family together with their respective associates, as the case may be, hold 5% or more, respectively, of the Shares. CD&R Holdco and the Arora Family can also terminate their respective Relationship Agreement if the Shares are no longer listed on the premium segment of the Official List and traded on the London Stock Exchange’s main market for listed securities.

Under the Relationship Agreement between the Company and CD&R Holdco, CD&R Holdco is entitled to propose for appointment two Non-Executive Directors to the Board for so long as it, together with its associates, holds, in aggregate, 10% or more of the Shares and one Non-Executive Director for so long as it, together with its associates, holds, in aggregate, 5% or more of the Shares. The Company and the Board have agreed that they will convene the shareholders’ meeting to approve any such appointment as soon as practicable and will not take any action which could delay or frustrate the appointment or the convening of the shareholders’ meeting to approve the appointment. The first such appointee of CD&R Holdco is David Novak. While Sir Terry Leahy remains a Director, CD&R Holdco will only have the right to propose one Director for appointment. For so long as CD&R Holdco together with any of its associates holds, in aggregate, at least 5% of the Shares, CD&R Holdco shall be entitled to appoint (and remove and reappoint) two persons to act as observers at any meetings of the Board (including any committees of the Board that may be established from time to time), who shall be entitled to receive notice of such meetings and all information provided to the Board (or committee of the Board).

72 Under the Relationship Agreement between the Company and the Arora Family, the Arora Family are able to appoint one Director to the Board for so long as they, together with their respective associates, hold, in aggregate 10% or more of the Shares. The Company and the Board have agreed that they will convene the shareholders’ meeting to approve any such appointment as soon as practicable and will not take any action which could delay or frustrate the appointment or the convening of the shareholders’ meeting to approve the appointment. The first such appointee of the Arora Family is Simon Arora.

In addition, the Relationship Agreements provide that the necessary quorum for Board meetings shall be three Directors and shall include (i) at least one Non-Executive Director appointed by CD&R Holdco or Sir Terry Leahy for so long as he is considered non-independent by the Board under the Code and (ii) an Executive Director.

73 PART 4: SELECTED FINANCIAL INFORMATION

The following tables present selected financial information of B&M European Value Retail 1 and its subsidiary undertakings as at the dates and for the periods indicated. The selected financial information in the tables headed Combined Statement of Comprehensive Income Data, Selected Combined of Financial Position Data and Selected Combined Cash Flows Data below have been extracted without material adjustment from the combined Historical Financial Information included in Part 7: Historical Financial Information.

Combined Statement of Comprehensive Income Data

For the year ended 29 March 2014 30 March 2013 31 March 2012 £’000 Revenue ...... 1,271,980 992,925 764,160 Cost of sales ...... (839,972) (653,291) (507,138) Gross profit ...... 432,008 339,634 257,022 Administrative expenses (excluding restructuring fees) ...... (315,044) (243,952) (198,053) Restructuring fees ...... — (7,361) — Other operating expenses ...... (13,998) (7,924) (3,440) Operating profit ...... 102,966 80,397 55,529 Financial costs ...... (101,195) (18,427) (1,821) Finance income ...... 1,855 320 45 Profit before tax ...... 3,626 62,290 53,753 Income tax expense ...... (6,939) (18,060) (14,428) (Loss)/Profit for the year ...... (3,313) 44,230 39,325

Selected Combined Financial Position Data

As at 29 March 2014 30 March 2013 31 March 2012 £’000 Non-current assets ...... 970,857 948,223 87,071 Current assets ...... 241,583 189,117 150,388 Total assets ...... 1,212,440 1,137,339 237,459 Total equity ...... 18,902 15,594 (104,233) Total current liabilities ...... (751,395) (123,148) (86,276) Total non-current liabilities ...... (479,947) (1,029,785) (46,950) Total liabilities ...... (1,231,342) (1,152,933) (133,226) Total equity and liabilities ...... (1,212,440) (1,137,339) (237,459)

Selected Combined Cash Flows Data

For the year ended 29 March 2014 30 March 2013 31 March 2012 £’000 Net cash flows from operating activities ...... 78,088 80,825 42,890 Net cash flows from investing activities ...... (33,028) (792,813) (9,562) Net cash flows from financing activities ...... (46,560) 725,917 (24,400) Net increase/(decrease) in cash and cash equivalents ...... (1,501) 13,930 8,928 Cash and cash equivalents at the beginning of the year ...... 26,403 12,473 3,545 Cash and cash equivalents at the end of the year ...... 24,902 26,403 12,473

74 PART 5: OPERATING AND FINANCIAL REVIEW

The following discussion of the results of operations and financial condition of the Group is based on and should be read in conjunction with the Historical Financial Information and related notes, prepared in accordance with IFRS, located in Part 7: Historical Financial Information, Important Information—Presentation of financial information and Part 2: Business.

The following discussion contains forward-looking statements that reflect the Group’s plans, estimates and beliefs. The Group’s actual results could differ materially from those anticipated in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this document, particularly in Risk Factors and Important Information— Forward-looking statements.

Unless otherwise specified or the context otherwise requires, all references to years in this Part 5 are references to the Group’s fiscal years and all references to “the period under review” in this Part 5 are references to the period commencing on the first day of the year ended 31 March 2012 and ending on the last day of the year ended 29 March 2014.

Overview The Group is a general merchandise discount retailer in the UK and Germany. Its UK business is one of the largest and most profitable companies in the fast growing general merchandise discount retail market in the UK, which the Directors believe is having a disruptive impact on the overall UK retail market. The Group has grown revenues from £764.2 million in the year ended 31 March 2012 to £1,272.0 million in the year ended 29 March 2014, demonstrating a CAGR of 29.0% over this three year period. The Directors believe that B&M stores offer a compelling customer proposition, combining leading brand fast-moving consumer goods (“FMCG”) products at attractive prices with a strong non-grocery product offering that together deliver sensational value to customers over a wide range of price points.

Grocery products in B&M stores principally consist of branded FMCG products at competitive prices combined with typically higher priced non-grocery products. The Group delivers significant savings to the customer when compared to comparable products from other retailers. The Group operates a flexible B&M store format and its dynamic trading strategy flexes its product ranges aggressively to take advantage of seasonal shifts in customer demand over the course of each year. Under this flexible category and space management model, the layout and stock keeping unit (“SKU”) range of each B&M store is regularly adjusted in order to maximise the space allocated to seasonal and other faster- moving merchandise, thus enabling the Group to “trade the seasons”. As a result, the Directors believe B&M stores compete across the UK grocery, specialist and general merchandise discount retail markets (the “Addressable Market”). Within the Addressable Market, the Group particularly focuses on the fragmented UK specialty retail segment, which was £127 billion in 2013, according to Euromonitor International.

The Group maintains strong relationships with a broad range of global FMCG manufacturers. A high proportion of B&M stores’ grocery products are branded and sourced directly from leading FMCG suppliers (such as Procter & Gamble, Unilever, Pepsico and Mondelez which have increased their sales to the Group from the year ended 31 March 2011 to the year ended 29 March 2014 at CAGRs of 58%, 169%, 33% and 15%, respectively). Within its non-grocery product category, the Group has established a strong network of suppliers in the Far East (principally China), either directly through a network of over 300 manufacturers in the Far East, or through its Hong Kong based joint venture company, Multi-Lines, that allows it to disintermediate UK importers and distributors. The Group has a well-developed Far East sourcing process that allows it to respond quickly to consumer taste. The Group has developed a strong and well-resourced in-house buying team, composed of over 100 people as of 29 March 2014, that leverages the Group’s strong supplier relationships to make informed sourcing decisions. This platform, as well as a highly focused approach to SKU count, allows the Group to deliver sensational value for money to customers, and disruptive pricing which the Directors believe has enabled it to attract and develop a broad and loyal customer base.

As of 29 March 2014, the Group operated a network of 373 general merchandise discount retail stores located throughout the UK, in town centres and in out-of-town locations such as retail parks. B&M stores encompassed a total of 5.34 million square feet of selling space as at 29 March 2014 throughout England, Scotland, Wales and Northern Ireland, with extensive coverage in the northern regions of the UK and the Midlands, and increasing penetration of Southern England. The Group has a strong and consistent track record of successfully opening new stores in the UK. The Directors believe that there remains a significant opportunity to continue the roll-out of

75 new B&M stores, with a focus on increasing the density of the store network in the northern regions of the UK and the Midlands and increasing the penetration of the Group’s store network into Southern England. Based on an analysis conducted by OC&C in March 2014, the Directors believe that the UK currently could support around 850 total B&M stores. Approximately 66% of the UK population still did not have easy access to a B&M store (i.e. meaning less than a 10 minute car drive), as of 26 March 2014, according to OC&C. The Group has budgeted to open approximately 40 new B&M stores in the year ending 28 March 2015 and to open approximately 40 further new B&M stores in the year ending 26 March 2016. As of 29 March 2014, the Group employed over 15,900 employees, including part-time employees.

The Group operates a well-invested warehouse and distribution system for B&M stores that consists primarily of its two principal distribution centres in Speke near Liverpool, which are well located as a majority of its shipments from China arrive at the port of Liverpool. The Group operates an in-house fleet of heavy goods vehicles for B&M store deliveries and intra-warehouse transfers. The Directors believe that the Group has the existing infrastructure necessary to support up to 500 B&M stores across the UK. Non-binding heads of terms for the lease of an additional distribution centre in Southern England have been agreed, however it is not expected that the additional distribution centre will be operational until the year ending 25 March 2017, which would enable the Group to make progress towards its eventual target of 850 B&M stores in the UK.

The Directors believe that there is also the potential for the Group to expand its operations within the European general merchandise discount retail market. On 30 April 2014, the Group acquired a majority stake in JA Woll Group, which owns and operates 49 stores. This provides the Group with an attractive platform for growth in Germany. Germany has the largest discount retail market in Europe, with minimal general merchandise discount retailer penetration and customers that focus on value, according to Euromonitor International. The Directors believe that the acquisition of a majority stake in the JA Woll Group also represents an opportunity to increase sales volumes across the Group and drive further efficiencies and economies of scale. The Group currently intends to open one new JAWOLL store in the year ending 28 March 2015 and two new JAWOLL stores in the year ending 26 March 2016.

The Group’s diversified product offering and sensational value proposition to customers have resulted in a consistent track record of strong growth in revenue and EBITDA. The Group’s strong growth has been delivered under its experienced founder-led management team. The Group’s senior management includes seasoned retail industry professionals, supported by a well-trained employee base with strong and high quality buying, retail and operational teams. The Group’s total revenue and EBITDA were £764.2 million and £62.8 million for the year ended 31 March 2012, £992.9 million and £88.0 million for the year ended 30 March 2013, and £1,272.0 million and £112.7 million for the year ended 29 March 2014. The Group’s revenue grew by a CAGR of 29.0% over the three year period ended 29 March 2014, and its EBITDA grew by a CAGR of 34.0% over the same three year period. The Group has also recorded strong and consistent like-for-like revenue growth over the last three years to 29 March 2014, with average annual like-for-like revenue growth of 6.1% over the period. The above financial performance to 29 March 2014 does not include the JA Woll Group which was acquired subsequent to the 2014 financial year end.

Current Trading and Prospects The Group has continued to trade strongly since 29 March 2014 and UK revenue for the 5 weeks ended 3 May 2014 increased by 27.3% compared with the comparable period in the prior year. Like-for-like revenue growth in the comparable period was 10.1%. Both total UK revenue and like-for-like revenue growth were positively impacted by the timing of Easter in the two periods.

The Group’s roll out strategy continues to proceed well in the UK and as at 25 May 2014 the Group had opened six new B&M stores since the year ended 29 March 2014, taking the total number of B&M stores in the UK to 379.

In Germany, the JA Woll Group is also trading strongly and integration of the supply chain is on schedule with the buying team of the JA Woll Group now working with the Group’s Hong Kong and Liverpool offices to integrate into the UK business’ established global supplier base.

Recent Developments On 30 April 2014, the Group acquired 80% of the shareholding in the JA Woll Group, a large German out-of- town general merchandise discount retailer, with stores located primarily in north-western Germany, for cash consideration of £66 million. See Part 2: Business—Recently Acquired German Operations.

76 On 21 May 2014, B&M Holdco 4 and certain other members of the Group entered into the £590 million New Facilities, comprising a non-amortising £300 million New TLA Facility (which is scheduled to mature five years after Admission), a non-amortising £140 million New TLB Facility (which is scheduled to mature six years after Admission) and a £150 million New RCF (which is scheduled to mature five years after Admission), all of which will bear interest at a variable rate linked to the sterling LIBOR. See Part 10: Additional Information—Material Contracts—New Facilities.

Significant Factors Affecting the Group’s Results of Operations The results of the Group’s operations have been, and will continue to be, affected by many factors, some of which are beyond the Group’s control. This section sets out factors that the Directors believe have significantly affected the Group’s results of operations and/or financial condition in the period under review and/or will have a significant effect on the Group’s results of operations and/or financial condition in the future.

New store openings New store openings have been a primary driver of the Group’s revenue growth in the period under review and are expected to continue to materially affect the Group’s results of operations going forward. During the period under review, the Group opened 140 net new stores. The Group opened 41, 57 and 42 net new B&M stores in the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively.

The following table sets forth the net number of the Group’s newly opened stores and the total number of stores.

As at and for the year ended 29 March 2014 30 March 2013 31 March 2012 Number of net new stores opened during the period ...... 42 57 41 Total number of stores as at the end of the period ...... 373 331 274

As part of the Group’s new B&M store openings it has incurred significant growth capital expenditure, infrastructure capital expenditure and maintenance capital expenditure in relation to the new B&M store openings and to support further store openings.

For the three years ended 29 March 2014, the Group incurred growth capital expenditure of £40.7 million primarily related to the opening of 140 net new B&M stores. For the year ended 29 March 2014, the Group had an average capital expenditure of £312,000 per new B&M store. New B&M stores are generally opened and fully operational within four weeks following lease completion, and B&M stores opened in calendar years 2011 and 2012 in their first year of operations had an average Payback Period including Working Capital of around 14 months.

To date, the Group has incurred costs to put in place infrastructure to support further growth and enable it to substantially increase its store portfolio without requiring significant further investment, such as the second distribution centre in Speke and the ongoing investment in its transportation fleet. Additionally, the Group has strengthened its head office by increasing head office personnel for buying, merchandise design, finance and HR. The Group’s annual average full time equivalent employees in administration and distribution increased from 319 for the year ended 31 December 2011 to 483 for the year ended 31 December 2013.

Gross margin A variety of factors affect the Group’s gross margin such as the mix of products sold (including with respect to grocery versus non-grocery products and UK-sourced versus directly imported goods) and the result of the Group’s sourcing from suppliers (including any supplier incentives). The Group typically realises higher margins on its non-grocery products than its grocery products. Just over half of the Group’s sales at B&M stores have been non-grocery products in recent years.

The Group’s gross margin remained broadly stable for the years ended 31 March 2012, 30 March 2013 and 29 March 2014, at 33.6%, 34.2% and 34.0%, respectively. This stability was achieved through efforts undertaken to manage its gross margin, including strengthening its supplier relationships, leading to increased buying power driven by increased scale, sourcing an increased number of non-grocery items directly from suppliers in Asia and

77 aggressively managing its product range and selling space. Further, the Group attempts to maintain a diversified product mix in its stores to avoid excessive reliance on any particular product category, which helps to maintain stability in its gross margin. The Group has the ability to flex its gross margin on a product line or category level to seek to maintain stability in the Group’s gross margin.

The Group continues to adjust its product mix to account for seasonal trends, rotate the bottom performing SKU lines, and to exploit new market opportunities. For example, the Group has recently introduced a new range of leading brand stationery and also extended its product range into craft and hobbyist products under a “Hobbyworld” private label range. The Directors believe that by managing the Group’s product mix they are able to deliver products that its customers want and that this has a positive effect on the Group’s results of operations and business.

The Group expects to further manage its product mix, including by improving the Group’s offering of private label items as its business grows. In addition, as general economic conditions improve and consumer disposable income increases, the Directors believe that there is scope for the Group to increase sales of “impulse purchases” and/or discretionary purchases, which are generally of higher margins.

Like-for-like revenue growth The following table sets out the Group’s like-for-like revenue growth for the years ended 29 March 2014, 30 March 2013 and 31 March 2012. See Important Information—Non-IFRS Information for information on the method of calculation.

For the year ended 29 March 2014 30 March 2013 31 March 2012 Like-for-like growth, customer transactions (%) ...... 2.7 1.8 2.6 Like-for-like growth, average transaction value (%) ...... 3.8 4.8 2.5 Total like-for-like revenue growth (%) ...... 6.5 6.6 5.1

The Group’s like-for-like revenue growth was 5.1%, 6.6% and 6.5% for the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively, which was due to increases in both average transaction value and customer transactions for B&M stores. These year-on-year increases in the Group’s like-for-like revenue were significant contributors to the increases in the Group’s revenue during the periods under review. The Group’s number of customer transactions per year was 101 million, 118 million and 138 million for the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively. The Group’s average transaction value was £8.84, £9.83 and £10.74 for the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively.

The Directors believe that the growth in B&M stores of both customer transactions and average transaction value on a like-for-like basis is based on the Group’s continuous improvement of sourcing quality and popular products for customers, high consumer recommendation rate and an overall structural and cultural shift by customers to value retailing.

Further, even mature B&M stores have had like-for-like revenue growth close to the Group’s overall like-for-like revenue growth. For example, like-for-like revenue growth for B&M stores opened prior to 2011 was 4.5%, 6.5% and 5.7% in the years ended 31 March 2012, 30 March 2013 and 29 March 2014.

Operating costs The Group’s management of its cost base is an important driver of its operating margins. The Group’s operating costs include staff salaries and wages and rental costs, both of which have increased in line with the new B&M store roll-out programme. The Group operates using a flexible low-cost operating model focused on cost efficiency, and the Group has been successful at maintaining its ratio of B&M store level operating costs to revenue ratio in the period under review, notwithstanding the significant expansion of the business and investment in infrastructure. The Group’s ratio of B&M store level operating costs to revenue for the years ended 31 March 2012, 30 March 2013 and 29 March 2014, was 18.9%, 18.4% and 18.3%, respectively. The Group’s B&M store wages as a percentage of revenue was 9.0%, 9.0% and 8.9% for the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively. The Group’s total rent as a percentage of revenue was 4.4% for the year ended 29 March 2014.

78 The following table sets forth information on selected operating costs for the Group for the years ended 29 March 2014, 30 March 2013 and 31 March 2012.

For the year ended 29 March 2014 30 March 2013 31 March 2012 ’000 Rent ...... 56,503 44,011 34,907 of which store rent ...... 51,733 40,591 31,743 Store wages(1) ...... 112,661 89,684 69,105 Other store costs ...... 68,588 52,588 43,671 Transport and warehouse ...... 43,487 33,164 28,428 Central costs ...... 19,311 13,027 13,593 Total ...... 300,550 232,474 189,704

% of Revenue Rent ...... 4.4% 4.4% 4.6% of which store rent ...... 4.1% 4.1% 4.2% Store wages(1) ...... 8.9% 9.0% 9.0% Other store costs ...... 5.4% 5.3% 5.7% Transport and warehouse ...... 3.4% 3.3% 3.7% Central costs ...... 1.5% 1.3% 1.8% Total ...... 23.6% 23.4% 24.8%

(1) Store wages excludes any store manager bonuses.

Seasonality The Group’s business is subject to seasonal peaks with January/February (with respect to furniture, home and cold weather merchandise), Spring/Summer (with respect to gardening and outdoor recreational merchandise), Autumn (with respect to Halloween and home merchandise) and especially Christmas (with respect to toys and decorative merchandise) an important part of the Group’s sales mix. Due to the sales of Christmas-related merchandise, historically, revenue and profit in the Group’s third quarter (October, November and December) have historically been higher than revenue and profit achieved in each of the other quarters of the fiscal year. For the year ended 29 March 2014, 21.9% of the Group’s annual revenue was generated in the first quarter, 23.0% in the second quarter, 32.2% in the third quarter and 22.9% in the fourth quarter. 20.9% of the Group’s retail segment EBITDA for the year ended 29 March 2014 was generated in the first quarter, 21.2% in the second quarter, 37.4% in the third quarter and 20.5% in the fourth quarter. The Group also incurs additional expense in advance of these seasonal peaks, including the cost of additional employees and the purchase of seasonal goods.

The Group’s results can be adversely affected by periods of extreme weather conditions, as the Group sees less shopping activity resulting in reduced footfall during periods of inclement weather in the United Kingdom.

Property B&M stores are typically leased on standard institutional landlords’ terms which require upward only rent reviews. The Group typically benefits from incentives on its new store leases, which vary in line with prevailing market conditions. The Group’s lease agreements typically last between five and 15 years, with rent renewals typically every five years, if applicable. In general, the level of any rent review increase will be affected by the local market conditions over the intervening period and existing at the time of review. Where possible, the Group obtains a retail price index or similar cap on future uplifts on rent review, or pre-agrees the first fifth year rent review.

For the year ended 29 March 2014, the Group’s aggregate store rental costs were £51.7 million and its weighted average annual rental costs per square foot across its leasehold store portfolio was £10.24. In evaluating rental costs, the Group evaluates a store’s rent level as a percentage of revenue due to the broad range of store sizes and geographical locations at which it trades.

As of 29 March 2014, a total of 60 stores had outstanding rent reviews, of which 32 related to rent reviews commenced in the year ended 29 March 2014 and 28 related to unsettled rent reviews commenced in financial years prior to the year ended 29 March 2014. A total of 43 stores have rent reviews in the year ending 28 March 2015, and 48 stores have rent reviews in the year ending 26 March 2016.

79 Warehouse and distribution The Group currently operates from four distribution centres. In February 2014, the Group opened its Speke 2 distribution centre, rental cost of which is currently £4.50 per square foot and capital expenditure for fit-out, which was £6.1 million in the year ended 29 March 2014, adding a total of 500,000 square feet of warehousing space and sited adjacent to the current Speke distribution centre.

The new Speke distribution centre site location was determined based on the proximity to the existing Speke distribution centre facility, proximity to the Liverpool docks for imported products, and the ability to leverage central functions and flex staff across the two sites. The Directors believe that opening this new facility was a critical step for the Group because it increased the Group’s total warehouse capacity, as well as created increased operational efficiencies given its location next to the Group’s original Speke site. To ensure a smooth transition, the Group gradually ramped up the Speke 2 facility alongside a reduction in activity at the Blackpool site. The Group is exploring opening another warehouse further south as part of its expansion into Southern England and has budgeted £6.5 million for the year ending 25 March 2017 for the costs associated with such a warehouse. Currently, this is not expected to be necessary or operational until the year ending 25 March 2017.

As of 29 March 2014, the Group operates a fleet of 161 HGV tractor units and over 300 trailers. The Group has continued to modernize its transport fleet during the period under review. The Group plans to continue to invest to maintain and improve the quality of the B&M fleet of tractors and trailers.

General economic climate The Group’s performance is affected by the general economic climate in the markets in which it operates, in particular as a result of how the economy impacts consumers’ spending patterns. Poor economic conditions have attracted some UK consumers to the general merchandise discount retail sector. However, the Directors believe that any improvements in the general economic outlook in the markets in which it operates and growth in consumer spending should have a positive impact on the Group’s future performance. Based on consumer surveys and trading performance, the Directors believe that UK consumers will continue to shop in the Group’s B&M stores and will tend to increase the proportion of non-consumable, discretionary items they purchase, which are typically higher margin. General economic conditions, such as inflation and minimum wage levels, can also have the effect of increasing the Group’s payroll costs, direct product costs and the cost of goods and services. However, the Directors believe that this should not create pressure on the Group’s gross margin, as it operates a cost-plus pricing model for its products.

Global Sourcing The Group sources products for its B&M stores from a broad range of FMCG and general merchandise suppliers. The Group has developed a strong in-house buying team, composed of over 100 people as of 29 March 2014, who are dedicated to sourcing FMCG as well as general merchandise products directly from suppliers in the Far East, with support from an in-house design team responsible for developing and merchandising private label and other general merchandise products. The Directors believe that the Group has a strong and experienced buying and merchandising team responsible for delivering strong product quality and value as well as improved gross margins.

The Group also has a strong network of suppliers in the Far East from whom it sources approximately two-thirds of its general merchandise products sold in B&M stores, either directly through its buyers from a network of over 300 manufacturers in the Far East, or through its Hong Kong based associate company, Multi-Lines. Direct sourcing for general merchandise products from the Far East was implemented in 2005 and over time the Group’s sourcing has moved from reliance on UK importers to direct sourcing for the majority of its non-grocery general merchandise products sold in B&M stores.

Increases to UK Statutory Minimum Wage The UK statutory minimum wage is currently £6.31 for employees aged 21 and over. In October 2013 the statutory minimum wage for adults increased from £6.19 per hour to £6.31 per hour, outside London, resulting in increased costs to the Group of £0.7 million in the year ended 29 March 2014. The annualised impact of this change in the current year is estimated by the Directors to be £1.4 million. As at 29 March 2014, 68% of the Group’s employees were on minimum wage. The Group’s store based staff costs have remained stable at approximately 9% of revenue despite annual increases to the statutory minimum wage in the UK for the three years ended 29 March 2014. In response to the Low Pay Commission’s 2014 report, the UK government has

80 announced that it will raise the statutory minimum wage for adults to £6.50 per hour in October 2014. The Group nevertheless is continuing to target to maintain the prior year’s ratio of store based staff costs to revenue.

Impact of capital structure and Admission As described in Part 2: Business—History and Development of the Group, in March 2013 the Company’s operating group was acquired by CD&R Fund VIII. In common with most private equity sponsored acquisitions, the structure of the acquisition and subsequent investments in the Group had a material effect on the reported financial position and results of operations of the Group included in Part 7: Historical Financial Information.

In the year ended 30 March 2013, the Group had finance costs of £18.4 million, of which £10.5 million related to costs incurred on raising debt finance. A further £4.5 million related to interest accrued, but not paid, on preferred equity certificates with a nominal value of £556.1 million (the “Preferred Equity Certificates”). In the year ended 29 March 2014, the Group had finance costs of £101.2 million, of which £33.9 million related to interest on debt and borrowings. A further £67.3 million related to interest accrued, but not paid, on Preferred Equity Certificates, preference shares and ordinary share capital. Following the Reorganisation, the Group will cease to incur these non-cash finance costs and cash costs on indebtedness are expected to be substantially lower.

In the current financial year the Group will incur the costs of the Global Offer accrued since 29 March 2014. Following Admission, the Group will incur on an on-going basis the costs of maintaining the listing of its Shares, the additional Directors appointed to the Board and the new executive and share incentive plans described in paragraph 12 of Part 10: Additional Information; the expected cash costs for these items are currently estimated to be £1.5 million in the year ended 28 March 2015 and approximately £1.5 million per year thereafter. The Group currently estimates the annual (non-cash) cost of the LTIP scheme to be £150,000, £350,000 and £600,000 for the years ending 28 March 2015, 26 March 2016 and 25 March 2017, respectively. Taking into account the Reorganisation undertaken in connection with the Global Offer, the Group currently expects that its cash tax rate for the year ending 28 March 2015 will be approximately 18.5%, and that its cash tax rate will be approximately 21% thereafter.

Non-IFRS financial and operational data The following table sets out certain key non-IFRS financial and operational data of the Group. The Directors believe that the following non-IFRS financial and operational data provide useful supplemental information to understand and analyse the underlying results of the Group.

Non-IFRS financial data

As at or for the year ended 29 March 2014 30 March 2013 31 March 2012 £’000, unless otherwise specified Like-for-like revenue growth (%)(1) ...... 6.5 6.6 5.1 Gross margin (%)(2) ...... 34.0 34.2 33.6 EBITDA(3) ...... 112,714 88,047 62,817 EBITDA margin (%)(4) ...... 8.9 8.9 8.2 Adjusted EBITDA (5) ...... 130,374 105,155 67,261 Adjusted EBITDA margin (%)(6) ...... 10.2 10.6 8.8 Profit margin (%)(7) ...... (0.3) 4.5 5.1 Capital expenditures (8) ...... 32,881 21,792 9,441 Net debt(9) ...... 432,723 450,197 26,868 Net debt to Adjusted EBITDA ratio ...... 3.3x 4.3x 0.4x Operating Cash Flow(10) ...... 83,786 85,859 42,578 Cash Conversion Ratio (%)(11) ...... 64 82 63

81 Operational data As at or for the year ended 29 March 2014 30 March 2013 31 March 2012 Operational data: Number of stores ...... 373 331 274 Net new stores(12) ...... 42 57 41 Total average selling space (square feet)(13) ...... 14,145 13,179 12,131 Average transaction value (pounds sterling)(14) ...... 10.74 9.83 8.84

(1) Like-for-like revenue growth is a comparison between two years of the Group’s sales of all relevant stores that were open for a minimum of one week as at the end of the first relevant year and not closed permanently by the end of the second relevant year. Like-for-like revenue includes all revenue from any such store commencing with the first full week that such store is open in the first relevant year, and all revenue from such store in the corresponding period of the second relevant year. Like-for-like revenue growth is expressed as a percentage. (2) Gross margin consists of gross profit expressed as a percentage of revenue. (3) EBITDA represents operating profit before depreciation and amortisation. EBITDA and EBITDA related measures are not a measurement of performance or liquidity under IFRS or US GAAP and should not be considered by investors in isolation or as a substitute for measures of profit, or as an indicator of the Group’s operating performance or cash flows from operating activities as determined in accordance with IFRS or US GAAP. The Group has presented these supplemental measures because they are used by it in managing its business. In addition, the Directors believe that EBITDA and EBITDA related measures are commonly reported by comparable businesses and used by investors and analysts in comparing the performance of businesses without regard to depreciation and amortisation, which can vary significantly depending upon accounting methods (particularly when acquisitions have occurred). EBITDA and EBITDA related measures may not be comparable to similarly titled measures disclosed by other companies and investors should not use these non-GAAP measures as a substitute for the figures provided in the Historical Financial Information. See also “Important Information—Non-IFRS Information” for further information. (4) EBITDA margin represents EBITDA expressed as a percentage of revenue. (5) Adjusted EBITDA represents EBITDA, as defined above, adjusted to exclude items that the Directors consider to be exceptional and non-trading items, including pre-opening store costs, onerous leases, transaction costs, costs relating to the 2011 excise duty dispute, dilapidations, CPO income, management LTIP bonuses, B&M European Value Retail 1 professional fees, shareholder monitoring fees, profit/(loss) on fixed asset disposal and profit/(loss) on foreign exchange derivatives. Adjusted EBITDA and Adjusted EBITDA related measures are not a measurement of performance or liquidity under IFRS or US GAAP and should not be considered by investors in isolation or as a substitute for measures of profit, or as an indicator of the Group’s operating performance or cash flows from operating activities as determined in accordance with IFRS or US GAAP. The Group has presented these supplemental measures because they are used by it in managing its business. In addition, the Directors believe that Adjusted EBITDA and Adjusted EBITDA related measures are commonly reported by comparable businesses and used by investors and analysts in comparing the performance of businesses without regard to items that the Directors consider to be exceptional and non-trading items. Adjusted EBITDA and Adjusted EBITDA related measures may not be comparable to similarly titled measures disclosed by other companies and investors should not use these non- GAAP measures as a substitute for the figures provided in the Historical Financial Information. See also “Important Information—Non- IFRS Information” for further information. (6) Adjusted EBITDA margin represents Adjusted EBITDA expressed as a percentage of revenue. (7) Profit margin represents profit for the year expressed as a percentage of revenue. (8) Capital expenditures consists of additions to land and buildings, plant, fixtures and equipment and motor vehicles. (9) Net debt represents the actual cash amount (rather than carrying value) of indebtedness and is defined as interest bearing loans and borrowings, excluding Preferred Equity Certificates, preference shares and ordinary shares, less cash and short term deposits. (10) Operating Cash Flow is defined as Adjusted EBITDA plus or minus the changes in Working Capital less total capital expenditures. Working Capital is the sum of inventories, trade and other receivables, trade and other payables and reverse lease premium. (11) Cash Conversion Ratio is defined as Operating Cash Flow as a percentage of Adjusted EBITDA. (12) Net new stores is calculated as the number of stores opened net of relocations and stores closed due to lease expiry or compulsory purchase orders. (13) Total average selling space is calculated as the total square footage of selling space of all B&M stores divided by the number of B&M stores. (14) Average transaction value is defined as (i) the Group’s total revenue (including VAT) from all stores during a particular period, divided by (ii) the number of customer transactions at the Group’s stores in that period.

Basis of Presentation On 6 March 2013, B&M European Value Retail 1 acquired control of B&M European Value Retail 2 S.à r.l. (“B&M European Value Retail 2”) and became the holding company for the Group. This business combination is discussed in further detail in note 8 of Part 7: Historical Financial Information. As a result of the acquisition, the structure of the group carrying out the Group’s business has not been the same throughout the entire period covered by the Historical Financial Information. Prior to 6 March 2013, the Group did not constitute a separate legal group. As a result, prior to this date, combined financial statements have been prepared on a basis that combines the results and assets and liabilities of each of the companies constituting the Group by applying the consolidation procedures of IFRS 10 Consolidated Financial Statements (“IFRS 10”) and includes the assets, liabilities, revenues and expenses that management has determined are specifically attributable to each entity included in the combined financial statements.

82 The Group comprised the following entities during the periods presented: Combined financial information for the year Combined financial information for the Combined financial information for ended 31 March 2012 year ended 30 March 2013 the year ended 29 March 2014 Firesource Limited Firesource Limited Firesource Limited B&M Retail Limited B&M Retail Limited B&M Retail Limited Opus Homewares Limited Opus Homewares Limited Opus Homewares Limited Meltore Limited Meltore Limited Meltore Limited B&M European Value Retail B&M European Value Retail 2 S.à r.l. 2 S.à r.l. B&M European Value Retail B&M European Value Retail Holdco 1 Limited Holdco 1 Limited B&M European Value Retail B&M European Value Retail Holdco 2 Limited Holdco 2 Limited B&M European Value Retail B&M European Value Retail Holdco 3 Limited Holdco 3 Limited B&M European Value Retail B&M European Value Retail Holdco 4 Limited Holdco 4 Limited B&M European Value Retail B&M European Value Retail 1 S.à r.l. 1 S.à r.l. During the year ended 31 March 2012, Firesource controlled B&M Retail Limited, Opus Homewares Limited and Meltore Limited. Refer to note 31 of Part 7: Historical Financial Information for details of the principal activity and country of incorporation of these entities. The combined financial information has been prepared in accordance with the requirements of the Listing Rules and in accordance with the basis of preparation set out in note 2 of Part 7: Historical Financial Information. The basis of preparation set out in note 2 of Part 7: Historical Financial Information describes how the financial information has been prepared in accordance with IFRS as adopted by the EU except as described therein. Prior to 6 March 2013, B&M European Value Retail 1 did not control B&M European Value Retail 2 and consequently is not permitted by IFRS 10 to present consolidated financial information. Accordingly the financial information which has been prepared specifically for the purpose of this document is prepared on the basis set out in note 2 of Part 7: Historical Financial Information for each of the three periods presented.

Explanation of Key Line Items in the Statement of Comprehensive Income Revenue Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable. Revenue for the sale of goods is the total amount receivable by the Group for goods supplied, in the ordinary course of business excluding VAT and trade discounts, returns and relevant vouchers and offers. Revenue is recognised at the initial point of sale of goods to customers, when the risk and rewards of the ownership of the goods have been transferred to the buyer and the revenue can be reliably measured.

Cost of sales Cost of sales consists of cost of inventories recognised as expenses, any supplier costs on imported goods (including any duty or freight for such imported goods), supplier discounts and shrinkage.

Administrative Expenses Administrative expenses mainly consist of salaries and wages, social security, rent, warehouse costs, business rates, transport costs, pension costs, auditors’ remuneration, depreciation of property, plant and equipment not held under finance lease, depreciation of property, plant and equipment held under finance lease, amortisation of intangible assets, net foreign exchange differences and operating lease rentals.

Other Operating Expenses Other operating expenses consist of dilapidations, excise duty, onerous leases, profit/loss of associate company, professional costs in connection with the Global Offer, shareholder monitoring fees and other.

83 Restructuring Fees Restructuring fees consist of costs relating to the raising of equity and other professional costs associated with the acquisition of a majority stake in the Group by CD&R.

Finance Costs Finance costs consists mainly of total interest expenses on loans and borrowings, finance leases, and losses in the fair value of foreign exchange forward contracts and interest rate swaps and the amortisation of fees related to the raising of debt finance.

Finance Income Finance income consists mainly of interest income on bank deposits and gains in the fair value of interest rate swaps.

Income Tax Expense Income tax expense consists of current and deferred taxes.

EBITDA and Adjusted EBITDA EBITDA represents operating profit before depreciation and amortisation. Adjusted EBITDA represents EBITDA, as defined above, adjusted to exclude items that the Directors consider to be exceptional and non- trading items, including pre-opening store costs, onerous leases, transaction costs, costs relating to the 2011 excise duty dispute, dilapidations, CPO income, management LTIP bonuses, B&M European Value Retail 1 professional fees, shareholder monitoring fees, profit/(loss) on fixed asset disposal and profit/(loss) on foreign exchange derivatives. The Directors use EBITDA and Adjusted EBITDA as key performance indicators of the Group’s business. See Important Information—Non-IFRS Information. The following table sets forth a reconciliation of EBITDA and Adjusted EBITDA to operating profit for the periods indicated. Year ended 29 March 2014 30 March 2013 31 March 2012 £’000 Operating profit ...... 102,966 80,397 55,529 Depreciation ...... 9,561 7,484 7,153 Amortisation ...... 188 166 135 EBITDA ...... 112,715 88,047 62,817 Pre-opening store costs(1) ...... 3,813 2,473 569 Onerous lease(2) ...... 812 1,125 — Transaction costs(3) ...... 529 1,005 — Excise duty(4) ...... 3,560 3,618 — Dilapidations(5) ...... 605 300 2,740 CPO income(6) ...... (695) — — Management LTIP bonuses(7) ...... 1,381 3,556 — B&M European Value Retail 1(8) ...... 83 6,355 — Shareholder monitoring fees(9) ...... 5,628 411 — Profit / (loss) on fixed asset disposal ...... 72 (250) 75 Profit / (loss) on foreign exchange derivatives ...... 1,872 (1,485) 1,060 Adjusted EBITDA ...... 130,374 105,155 67,261

(1) Pre-opening store costs consist of costs incurred after entering into the lease of the property but before opening the store. (2) Onerous lease consists of the expected future costs of rent on specific leasehold properties where operations have been resited, but the Group still has rent obligations. (3) Transaction costs consist of professional fees relating to the acquisition of B&M European Value Retail 2 S.à r.l. in March 2013, incurred by Firesource. (4) Excise duty consists of certain goods purchased on which, according to HMRC, the Group owed duty. The Group typically purchases its goods duty paid. (5) Dilapidations consist of the expected future costs of dilapidations on specific leasehold properties. (6) CPO income consist of compulsory purchase order income. (7) Management LTIP bonuses consist of the bonuses under management LTIP which matured in December 2013. (8) B&M European Value Retail 1 consist of professional fees relating to the acquisition of B&M European Value Retail 2 S.à r.l. in March 2013, incurred by B&M European Value Retail Holdco 1 Limited, B&M European Value Retail Holdco 2 Limited, B&M European Value Retail Holdco 3 Limited (“B&M Holdco 3”) and B&M Holdco 4. (9) Shareholder monitoring fees consists of professional fees paid to the CD&R Investors, and to Simon Arora, Bobby Arora, Robin Arora, Rani 1 Life Interest Trust and Rani 2 Life Interest Trust (based on their ownership of the Preferred Equity Certificates).

84 Adjusted EBITDA was £130.4 million for the year ended 29 March 2014, an increase of £25.2 million, or 24.0% from £105.2 million for the year ended 30 March 2013. The increase reflected the favourable impact on Adjusted EBITDA of new stores opened in the year ended 29 March 2014 (impact of £14 million), the full year impact of new stores opened in the prior year (impact of £12 million) and an increase in Like-for-Like Revenue Growth (impact of £7 million), offset in part by increased costs attributable to an increase in personnel and insurance costs in preparation for an initial public offering and the fit-out of Speke 2 during the year ended 29 March 2014

Adjusted EBITDA margin was 10.2% for the year ended 29 March 2014 compared to 10.6% for the year ended 30 March 2013. This decrease in Adjusted EBITDA margin was principally due to increased costs attributable to an increase in personnel and insurance costs in preparation for an initial public offering and the fit-out of Speke 2 during the year ended 29 March 2014.

Adjusted EBITDA was £105.2 million for the year ended 30 March 2013, an increase of £37.9 million, or 56.3% from £67.3 million for the year ended 31 March 2012. The increase reflected the favourable impact on Adjusted EBITDA of new stores opened in the year ended 30 March 2013 (impact of £18 million), an increase in Like-for-Like Revenue Growth (impact of £13 million) and the full year impact of new stores opened in the prior year (impact of £9 million), offset in part by an increase in variable costs and the impact of the earlier period being a 53 week period.

Adjusted EBITDA margin was 10.6% for the year ended 30 March 2013 compared to 8.8% for the year ended 31 March 2012. This increase in Adjusted EBITDA margin was principally due to improved gross margin (0.6%), efficiencies achieved in transport and distribution (0.4%) and the business benefitted from leveraging the fixed cost base as like-for-like revenue grew and new stores were opened (0.8%).

Results of Operations The following table sets forth selected combined statement of comprehensive income data for the years ended 29 March 2014, 30 March 2013 and 31 March 2012 as extracted without material adjustment from the combined financial information of the Group as set out in Part 7: Historical Financial Information.

Year ended 29 March 2014 30 March 2013 31 March 2012 £’000 Revenue ...... 1,271,980 992,925 764,160 Cost of sales ...... (839,972) (653,291) (507,138) Gross profit ...... 432,008 339,634 257,022 Administrative expenses (excluding restructuring fees) ...... (315,044) (243,952) (198,053) Restructuring fees ...... — (7,361) — Total administrative expenses ...... (315,044) (251,313) (198,053) Other operating expenses ...... (13,998) (7,924) (3,440) Operating profit ...... 102,966 80,397 55,529 Finance costs ...... (101,195) (18,427) (1,821) Finance income ...... 1,855 320 45 Profit before tax ...... 3,626 62,290 53,753 Income tax expense ...... (6,939) (18,060) (14,428) (Loss) / Profit for the year ...... (3,313) 44,230 39,325

85 Results of operations for the year ended 29 March 2014 compared with the year ended 30 March 2013 The following table sets forth combined statement of comprehensive income data for the years ended 29 March 2014 and 30 March 2013 derived from the combined financial information of the Group as set out in Part 7: Historical Financial Information, and shows the amount of the change and the percentage change in each of the components of the Group’s statement of comprehensive income between these two years.

Year ended Change 29 March 2014 30 March 2013 (amount) (%) £’000, except percentages Revenue ...... 1,271,980 992,925 279,055 28.1 Cost of sales ...... (839,972) (653,291) (186,681) 28.6 Gross profit ...... 432,008 339,634 92,374 27.2 Administrative expenses (excluding restructuring fees) ...... (315,044) (243,952) (71,092) 29.1 Restructuring fees ...... — (7,361) 7,361 (100.0) Total administrative expenses ...... (315,044) (251,313) (63,731) 25.4 Other operating expenses ...... (13,998) (7,924) (6,074) 76.7 Operating profit ...... 102,966 80,397 22,569 28.1 Finance costs ...... (101,195) (18,427) (82,768) 449.2 Finance income ...... 1,855 320 1,535 479.7 Profit before tax ...... 3,626 62,290 (58,664) (94.2) Income tax expenses ...... (6,939) (18,060) 11,121 (61.6) Profit / (Loss) for the year ...... (3,313) 44,230 (47,543) (107.5)

Revenue Revenue was £1,272.0 million for the year ended 29 March 2014, an increase of £279.1 million, or 28.1% from £992.9 million for the year ended 30 March 2013, principally due to £103.5 million from net new store openings, £112.5 million from the full year effect of stores opened in the previous period and £63.0 million from like-for- like revenue growth.

Expansion of the Group’s store network was the primary reason for the increase in revenue in the year ended 29 March 2014 as compared to the prior year.

Like-for-like revenue grew £63.0 million or 6.5% for the year ended 29 March 2014 as compared to the year ended 30 March 2013, principally due to an increase in the Group’s average transaction value from £9.83 to £10.74 and an increase in store traffic.

Cost of sales Cost of sales was £840.0 million for the year ended 29 March 2014, an increase of £186.7 million, or 28.6% from £653.3 million for the year ended 30 March 2013, principally due to an increase in the purchase of inventories. This increase was principally due to increase in like-for-like revenue growth and sales from new B&M store openings. As a percentage of revenue, cost of sales increased from 65.8% for the year ended 30 March 2013 to 66.0% for the year ended 29 March 2014.

Gross profit Gross profit was £432.0 million for the year ended 29 March 2014, an increase of £92.4 million, or 27.2% from £339.6 million for the year ended 30 March 2013, principally due to the increase in revenue while maintaining a stable gross margin.

Gross margin was 34.0% for the year ended 29 March 2014 compared to 34.2% for the year ended 30 March 2013.

86 Administrative expenses (excluding restructuring fees) The following table set forth the principal components of the Group’s administrative expenses (excluding restructuring fees) for the years ended 29 March 2014 and 30 March 2013.

Year ended Change 29 March 2014 30 March 2013 (amount) (%) £’000, except percentages Administrative expenses (excluding restructuring fees) ...... 315,044 243,952 71,092 29.1 Of which: Employee benefit expense: Salaries and wages ...... 142,727 110,156 32,571 29.6 Social Security ...... 6,110 4,955 1,155 23.3 Pension costs ...... 382 39 343 879.5 Auditors remuneration ...... 150 49 101 206.1 Payments to auditors in respect of non-audit services ...... 110 8 102 1,275.0 Depreciation of property, plant and equipment (“PPE”) not held under finance lease ...... 9,379 7,302 2,077 28.4 Depreciation of PPE held under finance lease ...... 182 182 — 0.0 Amortisation of intangible assets ...... 188 166 22 13.3 Net foreign exchange differences ...... 81 60 21 35.0 Operating lease rentals ...... 59,762 44,902 14,860 33.1

Administrative expenses (excluding restructuring fees) were £315.0 million for the year ended 29 March 2014, an increase of £71.1 million, or 29.1% from £244.0 million for the year ended 30 March 2013, principally due to increased salaries and wages, increased operating lease rentals and increased other central costs.

The increase in salaries and wages within administrative expenses was principally due to an increase in the number of employees. The number of the Group’s FTE employees increased by 27.8% from 7,630 as at 31 December 2012 to 9,755 as at 31 December 2013, principally due to the expansion of the Group’s store network. In October 2013 the statutory minimum wage for adults increased from £6.19 per hour to £6.31 per hour, outside London. Store wages as a percentage of revenue were 9.0% and 8.9% in the years ended 30 March 2013 and 29 March 2014, respectively.

The increase in operating lease rentals within administrative expenses was principally due to an increase in the number of stores as well as a small increase in rent for properties up for rent review. The number of the Group’s stores increased by 12.7% from 331 as at 30 March 2013 to 373 as at 29 March 2014.

Restructuring fees Restructuring fees were nil for the year ended 29 March 2014, compared to £7.4 million for the year ended 30 March 2013. Restructuring fees consisted of vendor due diligence fees, fees related to the raising of equity and other professional fees related to the acquisition of B&M European Value Retail 2. See note 8 of Part 7: Historical Financial Information.

Other operating expenses Other operating expenses were £14.0 million for the year ended 29 March 2014, an increase of £6.1 million, or 76.7% from £7.9 million for the year ended 30 March 2013. Other operating expenses consisted of expenses and income in relation to pre-opening store costs, the shareholder monitoring fee, HMRC excise duty, dilapidations, onerous leases, compulsory purchase orders, professional project fees and foreign exchange on consolidation. The increase was principally due to opening more new stores, variable costs of supporting those new stores and central overheads.

Operating profit Operating profit was £103.0 million for the year ended 29 March 2014, an increase of £22.6 million, or 28.1% from £80.4 million for the year ended 30 March 2013, principally due to the reasons outlined above. Operating profit margin was 8.1% for the year ended 29 March 2014 compared to 8.1% for the year ended 30 March 2013.

87 Finance costs The table below presents the breakdown of the Group’s finance costs for the years ended 29 March 2014 and 30 March 2013.

Year ended Change 29 March 2014 30 March 2013 (amount) (%) £’000, except percentages Interest on debt and borrowings ...... 33,897 3,291 30,606 930.0 Interest on preferred equity certificates, preference shares and ordinary share capital ...... 67,295 4,570 62,725 1,372.5 Finance charges payable under finance leases and hire purchase contracts ...... 3 16 (13) (81.3) Total interest expense ...... 101,195 7,877 93,318 1184.7 Costs incurred raising debt finance ...... — 10,550 (10,550) (100.0) Loss on financial instruments at fair value through profit or loss ...... — — — — Total finance costs ...... 101,195 18,427 82,768 449.2

Finance costs were £101.2 million for the year ended 29 March 2014, an increase of £82.8 million, or 449.2% from £18.4 million for the year ended 30 March 2013, principally due to the full year effect in the year ended 29 March 2014 of interest accrued or paid on Preferred Equity Certificates and the Group’s facility loans, which were entered into in March 2013.

Finance income Finance income was £1.9 million for the year ended 29 March 2014, an increase of £1.5 million, or 479.7% from £0.3 million for the year ended 30 March 2013, principally due to the increase in the fair value of the Group’s interest rate swaps.

Profit before tax Profit before tax was £3.6 million for the year ended 29 March 2014, a decrease of £58.7 million, or 94.2% from £62.3 million for the year ended 30 March 2013, principally due to the increase in interest accrued or paid on Preferred Equity Certificates and the Group’s facility loans.

Income tax expense The table below presents the breakdown of the Group’s income tax expense for the years ended 29 March 2014 and 30 March 2013.

Year ended Change 29 March 2014 30 March 2013 (amount) (%) £’000, except percentages Current and non-current tax ...... 6,708 18,708 (12,000) (64.1) Deferred tax ...... 231 (648) 879 135.6 Total tax expense ...... 6,939 18,060 (11,121) (61.6)

Income tax expense was £6.9 million for the year ended 29 March 2014, a decrease of £11.2 million, or 61.6%, from £18.1 million for the year ended 30 March 2013 due to higher interest costs, which reduced taxable income.

The Group’s effective income tax rate increased from 29.2% in the year ended 30 March 2013 to 191.4% in the year ended 29 March 2014, principally due to the disallowed element of the Preferred Equity Certificate cost and overall finance charges.

For the year ended 29 March 2014 the effective rate of tax of 191.4% was higher than the UK statutory rate of 23%, principally due to the disallowed element of the Preferred Equity Certificate cost and overall finance charges. For the year ended 30 March 2013 the effective rate of tax of 29.2% was higher than the UK statutory rate of 24%, principally due to expenses that were not deductible for tax purposes, the largest element of which were the costs related to the raising of equity.

88 During December 2013, the Group reached agreement with HMRC to allow a proportion of the interest on the Preferred Equity Certificates to be deducted for corporation tax purposes. The benefit of the agreement resulted in a lower tax charge for the year ended 29 March 2014.

This agreement was formalised under an Advanced Thin Capitalisation Agreement signed by the Company and HMRC.

Profit/(Loss) for the year As a result of the above, loss for the year was £3.3 million for the year ended 29 March 2014, a decrease of £47.5 million from a profit for the year of £44.2 million for the year ended 30 March 2013.

Results of operations for the year ended 30 March 2013 compared with the year ended 31 March 2012 The following table sets out combined statement of comprehensive income data for the years ended 30 March 2013 and 31 March 2012 derived from the consolidated financial information of the Group as set out in Part 7: Historical Financial Information, and shows the amount of the change and the percentage change in each of the components of the Group’s statement of comprehensive income between these two years.

Year ended Change 30 March 2013 31 March 2012 (amount) (%) £’000, except percentages Revenue ...... 992,925 764,160 228,765 29.9 Cost of sales ...... (653,291) (507,138) (146,153) 28.8 Gross profit ...... 339,634 257,022 82,612 32.1 Administrative expenses (excluding restructuring fees) ...... (243,952) (198,053) (45,899) 23.2 Restructuring fees ...... (7,361) — (7,361) 100.0 Total administrative expenses ...... (251,313) (198,053) (53,260) 26.9 Other operating expenses ...... (7,924) (3,440) (4,484) 130.3 Operating profit ...... 80,397 55,529 24,868 44.8 Finance costs ...... (18,427) (1,821) (16,606) 911.9 Finance income ...... 320 45 275 611.1 Profit before tax ...... 62,290 53,753 8,537 15.9 Income tax expenses ...... (18,060) (14,428) (3,632) 25.2 Profit for the year ...... 44,230 39,325 4,905 12.5

Revenue Revenue was £992.9 million for the year ended 30 March 2013, an increase of £228.8 million, or 29.9% from £764.2 million for the year ended 31 March 2012, principally due to £136.9 million in revenue from net new store openings, £53.8 million in revenue from the full year effect of stores opened in the previous period and £49.7 million in revenue from like-for-like revenue growth, which was partially offset by £11.7 million from the effect in the year ended 31 March 2012 being a 53 week period whereas the year ended 30 March 2013 was a 52 week period.

Expansion of the Group’s store network was the primary reason for the increase in revenue in the year ended 30 March 2013 as compared to the prior year.

Like-for-like revenue grew £49.7 million or 6.6% for the year ended 30 March 2013 as compared to the year ended 31 March 2012, principally due to an increase in the Group’s average transaction value from £8.84 to £9.83 and an increase in customer transactions.

Cost of sales Cost of sales was £653.3 million for the year ended 30 March 2013, an increase of £146.2 million, or 28.8% from £507.1 million for the year ended 31 March 2012, principally due to an increase in the purchase of inventories. As a percentage of revenue, cost of sales decreased from 66.4% for the year ended 31 March 2012 to 65.8% for the year ended 30 March 2013. This decrease was principally due to improved cost prices resulting from direct sourcing as well as a modest increase in the proportion of sales consisting of non-grocery products.

89 Gross profit

Gross profit was £339.6 million for the year ended 30 March 2013, an increase of £82.6 million, or 32.1% from £257.0 million for the year ended 31 March 2012, principally due to the increase in revenue while maintaining a stable gross margin.

Gross margin was 34.2% for the year ended 30 March 2013 compared to 33.6% for the year ended 31 March 2012.

Administrative expenses (excluding restructuring fees)

The following table set forth the principal components of the Group’s administrative expenses (excluding restructuring fees) for the years ended 30 March 2013 and 31 March 2012.

Year ended Change 30 March 2013 31 March 2012 (amount) (%) £’000, except percentages Administrative expenses ...... 243,952 198,053 45,899 23.2 Of which: Employee benefit expense: Salaries and wages ...... 110,156 86,078 24,078 28.0 Social Security ...... 4,955 4,805 150 3.1 Pension costs ...... 39 41 (2) (4.9) Auditors remuneration ...... 49 49 — 0.0 Payments to auditors in respect of non-audit services ...... 8 7 1 14.3 Depreciation of property, plant and equipment (“PPE”) not held under finance lease ...... 7,302 6,970 332 4.8 Depreciation of PPE held under finance lease ...... 182 183 (1) (0.5) Amortisation of intangible assets ...... 166 135 31 23.0 Net foreign exchange differences ...... 60 (4) 64 (1,600.0) Operating lease rentals ...... 44,902 35,427 9,475 26.7

Administrative expenses (excluding restructuring fees) were £244.0 million for the year ended 30 March 2013, an increase of £45.9 million, or 23.2% from £198.1 million for the year ended 31 March 2012, principally due to an increase in salaries and wages and an increase in operating lease rentals.

The increase in salaries and wages within administrative expenses was principally due to an increase in the number of employees. The number of the Group’s FTE employees increased by 26.9% from 6,011 as at 31 December 2011 to 7,630 as at 31 December 2012, principally due to the expansion of the Group’s store network. Store wages as a percentage of revenue were 9.0% in each of the years ended 31 March 2012 and 30 March 2013.

The increase in operating lease rentals within administrative expenses was principally due to an increase in the number of stores as well as a small increase in rent for properties up for rent review. The number of the Group’s stores increased by 20.8% from 274 as at 31 March 2012 to 331 as at 30 March 2013.

Restructuring fees

Restructuring fees of £7.4 million were incurred in the year ended 30 March 2013 in connection with the acquisition of the business by the CD&R Investors, as compared to no such fees in the year ended 31 March 2012. See note 8 of Part 7: Historical Financial Information.

Other operating expenses

Other operating expenses were £7.9 million for the year ended 30 March 2013, an increase of £4.5 million, or 130.3% from £3.4 million for the year ended 31 March 2012. The increase was principally due to the £3.6 million in management bonuses accrued with respect to the LTIP, as well as an excise duty of £3.6 million in the year ended 30 March 2013.

90 Operating profit Operating profit was £80.4 million for the year ended 30 March 2013, an increase of £24.9 million, or 44.8% from £55.5 million for the year ended 31 March 2012, principally due to the reasons outlined above. Operating profit margin was 8.1% for the year ended 30 March 2013 compared to 7.3% for the year ended 31 March 2012. This increase in operating profit margin was principally due to the efficiency achieved by the increase in revenues leveraged against the Group’s fixed costs, partially offset by restructuring fees incurred in the year ended 30 March 2013.

Finance costs The table below presents the breakdown of the Group’s finance costs for the year ended 30 March 2013 and 31 March 2012.

Year ended Change 30 March 2013 31 March 2012 (amount) (%) £’000, except percentages Interest on debt and borrowings ...... 3,291 1,594 1,697 106.5 Interest on preferred equity certificates, preference shares and ordinary share capital ...... 4,570 — 4,570 0.0 Finance charges payable under finance leases and hire purchase contracts ...... 16 35 (19) (54.3) Total interest expense ...... 7,877 1,629 6,248 383.5 Costs incurred on raising debt finance ...... 10,550 — 10,550 0.0 Loss on financial instruments at fair value through profit or loss ...... — 192 (192) (100.0) Total finance costs ...... 18,427 1,821 16,606 911.9

Finance costs were £18.4 million for the year ended 30 March 2013, an increase of £16.6 million, or 911.9% from £1.8 million for the year ended 31 March 2012, principally due to the costs incurred on raising debt finance and the interest on Preferred Equity Certificates in the year ended 30 March 2013.

Finance income Finance income was £0.3 million for the year ended 30 March 2013, an increase of £275 thousand, or 611.1% from £45 thousand for the year ended 31 March 2012.

Profit before tax Profit before tax was £62.3 million for the year ended 30 March 2013, an increase of £8.5 million, or 15.9% from £53.8 million for the year ended 31 March 2012, principally due to the reasons outline above.

Income tax expense The table below presents the breakdown of the Group’s income tax expense for the years ended 30 March 2013 and 31 March 2012.

Year ended Change 30 March 2013 31 March 2012 (amount) (%) £’000, except percentages Current and non-current tax ...... 18,708 14,827 3,881 26.2 Deferred tax ...... (648) (398) (250) (62.8) Total tax expense ...... 18,060 14,429 3,631 25.2

Income tax expense was £18.1 million for the year ended 30 March 2013, an increase of £3.6 million, or 25.2%, from £14.4 million for the year ended 31 March 2012 due to increased operating profit for the year ended 30 March 2013.

91 The Group’s effective income tax rate increased from 26.8% in the year ended 31 March 2012 to 29.2% in the year ended 30 March 2013, principally due to one-off items and non-deductible items, such as the costs of raising equity, offset in part by a reduction in the UK statutory rate from 26% in the year ended 31 March 2012 to 24% in the year ended 30 March 2013.

For the year ended 30 March 2013 the effective rate of tax of 29.2% was higher than the UK statutory rate of 24%, principally due to expenses not deductible for tax purposes, the largest element of which was the costs related to the raising of equity. For the year ended 31 March 2012 the effective rate of tax of 26.8% was higher than the UK statutory rate of 26%, principally due to short-term timing differences.

Profit/(Loss) for the year

As a result of the foregoing, profit for the year was £44.2 million for the year ended 30 March 2013, an increase of £4.9 million, or 12.5% from £39.3 million for the year ended 31 March 2012.

Liquidity and Capital Resources

During the period under review, the Group has been cash generative with the principal source of the Group’s liquidity coming from its operating activities and its existing finance facilities. The Group’s liquidity requirements arise primarily from the need to fund its working capital requirements and capital expenditure programme, as well as to make interest and principal payments on its indebtedness.

The Group’s ability to generate cash from operations will depend on its future operating performance, which in turn is dependent on various factors, including but not limited to those described under “—Significant Factors Affecting the Group’s Results of Operations”, many of which are beyond the Group’s control. The Directors believe that the Group’s operating cash flows and borrowing capacity will be sufficient to meet its requirements and commitments for the foreseeable future. The Group’s actual financing requirements will depend on numerous factors, including general economic conditions, the availability of credit from banks, other financial institutions and capital markets, restrictions in the instruments governing its debt and the Group’s general financial performance.

Cash flows

The table below presents a summary of the Group’s cash flows for the years ended 29 March 2014, 30 March 2013 and 31 March 2012.

Year ended 29 March 2014 30 March 2013 31 March 2012 £’000 Net cash flows from operating activities ...... 78,088 80,825 42,890 Net cash flows from investing activities ...... (33,028) (792,813) (9,562) Net cash flows from financing activities ...... (46,560) 725,917 (24,400) Net increase / (decrease) in cash and cash equivalents ...... (1,501) 13,930 8,928 Cash and cash equivalents at the end of the year ...... 24,902 26,403 12,473

Net cash flows from operating activities

For the year ended 29 March 2014, net cash flows from operating activities were £78.1 million, a decrease of £2.7 million, or 3.4% from £80.8 million for the year ended 30 March 2013. For the year ended 29 March 2014, cash generated from operations was £89.5 million, a decrease of £14.4 million, or 13.8% from £103.9 million for the year ended 30 March 2013, which principally reflected an increase in working capital, payment of the balance of costs of the 2013 CD&R acquisition in the year ended 29 March 2014, as well as £4.9 million of payments made under the management LTIP in the year ended 29 March 2014, (of which £3.6 million was accrued for in the year ended 30 March 2013). For the year ended 29 March 2014, income taxes paid were £11.4 million, a decrease of £11.6 million, or 50.4% from £23.0 million for the year ended 30 March 2013, principally as a result of the deductible portion of interest on the Preferred Equity Certificates.

92 For the year ended 30 March 2013, net cash flows from operating activities were £80.8 million, an increase of £37.9 million, or 88.4% from £42.9 million for the year ended 31 March 2012. For the year ended 30 March 2013, cash generated from operations was £103.9 million, an increase of £52.4 million, or 101.7% from £51.5 million for the year ended 31 March 2012, which principally reflected increased EBITDA and improved working capital. For the year ended 30 March 2013, income taxes paid were £23.0 million, an increase of £14.4 million, or 166.7% from £8.6 million for the year ended 31 March 2012, principally as a result of increased profit before tax.

Net cash flows from investing activities For the year ended 29 March 2014, net cash used in investing activities was £33.0 million which was primarily due to the purchase of property, plant and equipment associated with new B&M store openings.

For the year ended 30 March 2013, net cash used in investing activities was £792.8 million which was primarily due to £765.5 million used for the acquisition of the Group by the CD&R Investors and £21.8 million used for the purchase of property, plant and equipment which was primarily due to new store openings.

For the year ended 31 March 2012, net cash used in investing activities was £9.6 million which was primarily due to £9.4 million for the purchase of property, plant and equipment which was was primarily due to new store openings.

Net cash flows from financing activities For the year ended 29 March 2014, net cash used in financing activities was £46.6 million which was primarily due to £27.4 million in interest payments and £19.0 million in loan repayments.

For the year ended 30 March 2013, net cash provided by financing activities was £725.9 million, which primarily consisted of £811.4 million in net borrowings used for the acquisition of the Group by the CD&R Investors, offset in part by £39.3 million in loan repayments, £33.1 million in transaction fees included in the facility loan balance, £10.6 million in transaction fees and expenses and £2.1 million in interest paid.

For the year ended 31 March 2012, net cash used in financing activities was £24.4 million, which was primarily due to the repayment of £22.3 million of borrowings and £1.6 million in interest paid. No dividends have been paid in the three years ended 29 March 2014.

Capital expenditure The table below presents a breakdown of the Group’s capital expenditure for the years ended 29 March 2014, 30 March 2013 and 31 March 2012.

Year ended 29 March 2014 30 March 2013 31 March 2012 £’000 Growth capital expenditure ...... 16,676 16,482 7,536 Infrastructure capital expenditure ...... 9,482 2,717 379 Maintenance capital expenditure ...... 6,723 2,593 1,525 Total capital expenditure ...... 32,881 21,792 9,440

The Group’s total capital expenditure was £9.4 million, £21.8 million and £32.9 million in the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively. The largest component of capital expenditure was spent on the opening of new stores. The Group’s store portfolio increased by 41, 57 and 42 net new stores for the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively. In the year ended 29 March 2014, the average capital expenditure per new store opened was approximately £312,000.

Capital expenditure for store refurbishments during the period under review was limited, given the relative simplicity of the B&M store shopfit. However, given that the Group intends to refurbish B&M stores approximately every six years, capital expenditure for store refurbishments is expected to modestly increase as the Group’s growing store portfolio ages.

93 Capital expenditure incurred on the second distribution centre in Speke was £6.1 million for the year ended 29 March 2014. The Group has continued to modernize its transportation and mechanical handling fleet during the period under review and incurred capital expenditure of £0.9 million, £1.1 million, and £1.4 million in the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively, on such modernisation.

Maintenance capital expenditure includes store development, such as new merchandising initiatives and sales displays, equipment purchases and store maintenance. Maintenance capital expenditure is undertaken by individual stores on an ad-hoc basis, as required, with total maintenance capital expenditure for existing stores of £1.5 million, £2.6 million and £6.7 million in the years ended 31 March 2012, 30 March 2013 and 29 March 2014, respectively. Store maintenance capital expenditure should be considered in the context of the Group’s ongoing repair and renewal expenditure within operating costs. The increase in investment in the year ended 29 March 2014 was mainly attributable to a deliberate decision to upgrade the shopfit at the Group’s larger B&M stores.

For the year ending 28 March 2015 the Group’s capital expenditure is expected to include new store openings, maintenance expenditure on existing stores, plant and machinery and IT equipment. For the year ending 28 March 2015, the Group’s total capital expenditure is currently expected to be approximately £26.6 million, of which approximately £14.0 million is expected to be for new store openings. For the year ending 26 March 2016, the Group’s total capital expenditure is currently expected to be approximately £23.6 million, of which approximately £13.9 million is expected to be for new store openings.

Indebtedness Indebtedness prior to the Global Offer The table below presents a breakdown of the Group’s interest-bearing loans and borrowings as at 29 March 2014, 30 March 2013 and 31 March 2012.

As at 29 March 2014 30 March 2013 31 March 2012 £’000 Current liabilities: Term facility bank loans ...... 7,750 2,375 8,400 Preferred equity certificates ...... 622,775 — — Preference shares ...... 1,960 — — Ordinary share capital ...... 240 — — Share premium on “A” ordinary shares ...... 16 — — Revolving facility bank loans ...... — 16,599 — 632,741 18,974 8,400 Non-current liabilities: Term facility bank loans ...... 423,930 425,467 30,941 Preferred equity certificates ...... — 556,050 — Preference shares ...... — 1,750 — Ordinary share capital ...... — 239 — Share premium on “A” ordinary shares ...... — 16 — 423,930 983,522 30,941 Total interest bearing loans and borrowings ...... 1,056,671 1,002,496 39,341

On 1 March 2013, B&M Holdco 3 and B&M Holdco 4, among others, entered into a senior facilities agreement consisting of a revolving credit facility (the “Senior RCF”), a term loan A facility (the “TLA Facility”), a term loan B facility (the “TLB Facility”) and an acquisition / capex facility (the “Senior ACF”).

94 The Senior RCF provides for a committed £100.0 million secured multicurrency revolving credit facility, made available for general corporate purposes of the Group. The interest rate payable for each interest period was LIBOR + 5% and from 6 March 2014 is LIBOR + 4.75%. The margin is subject to a margin ratchet calculated by by reference to a leverage ratio calculation applied to B&M Holdco 3 and its subsidiaries. B&M Holdco 4 is the original borrower under the Senior RCF. The Senior RCF is secured by a first priority lien on all tangible and intangible assets of B&M Holdco 3 and the stock and all tangible and intangible assets of its material subsidiaries.

The TLA Facility provides for a committed £125.0 million secured GBP term loan, made available, among other things, for financing the acquisition of a controlling stake in B&M European Value Retail 2 S.à r.l. by the CD&R Investors. The interest rate payable on the TLA Facility for each interest period was LIBOR + 5% and from 6 March 2014 is LIBOR + 4.75%. The margin is subject to a margin ratchet calculated by reference to a leverage ratio calculation applied to B&M Holdco 3 and its subsidiaries. B&M Holdco 4 is the original borrower under the TLA Facility. The TLA Facility is secured by a first priority lien on all tangible and intangible assets of B&M Holdco 3 and the stock and all tangible and intangible assets of its material subsidiaries.

The TLB Facility provides for a committed £335.0 million secured GBP term loan, made available, among other things, for financing the acquisition of a controlling stake in European Value Retail 2 S.à r.l. by the CD&R Investors. The interest rate payable on the TLB Facility for each interest period was LIBOR + 5.5% and from 6 March 2014 is LIBOR + 5.25%. The margin is subject to a margin ratchet calculated by by reference to a leverage ratio calculation applied to B&M Holdco 3 and its subsidiaries. B&M Holdco 4 is the original borrower under TLB Facility. The TLB Facility is secured by a first priority lien on all tangible and intangible assets of B&M Holdco 3 and the stock and all tangible and intangible assets of its material subsidiaries.

The Senior ACF is an amortising term loan acquisition capex facility providing for a committed £25.0 million GBP term loan, available for financing certain acquisitions and capital expenditure expenses. The ACF is scheduled to mature on 6 March 2019.

The Group will repay any amounts outstanding under the Senior Facilities Agreement (and cancel the loan facilities thereunder) shortly after Admission using the net proceeds of the Global Offer, together with drawings under the New Facilities. See Part B of Part 8: Unaudited Pro Forma Information.

The Preferred Equity Certificates, preference shares and ordinary share value are carried at their nominal value (which represented their fair value on initial recognition of these instruments) plus interest which was compounded on 6 March 2014. Their classification as current in 2014 is based upon their expected redemption date rather than their maturity date, which is 2062 for the preferred equity certificates and not applicable for the preference and ordinary shares.

Preference shares rank ahead of ordinary shares in terms of distributions. Each preference share carries one vote. The preference shares have been classified as debt on the balance sheet, along with the interest which compounded on 6 March 2014.

The Preferred Equity Certificates with a nominal value of £556 million are made up of 55,604,952,750 12% certificates of £0.01 each. These certificates are mandatorily redeemed in March 2062, or in the event of a listing (amongst other events). The preferred equity certificates rank pari passu with each other, and ahead of all ordinary and preference shares in terms of distribution. They do not carry voting rights. The preferred equity certificates have been classified as debt on the balance sheet, along with the interest compounded on 6 March 2014.

As part of the Reorganisation, the Preferred Equity Certificates and preference shares will be redeemed.

Indebtedness after the Global Offer

On 21 May 2014, B&M Holdco 4, as borrower, (in such capacity, the “New Facilities Borrower”, and together with any other member of the Group, which subsequently accedes to the New Facilities as borrower (the “Borrowers”) and B&M Holdco 4 and certain other members of the Group as guarantors (the “New Facilities

95 Guarantors”, and together with any other member of the Group that subsequently accedes to the New Facilities as guarantor, the “Guarantors”), entered into the £590 million New Facilities, comprising a non-amortising £300 million New TLA Facility (which is scheduled to mature five years after Admission), a non-amortising £140 million New TLB Facility (which is scheduled to mature six years after Admission) and a £150 million New RCF (which is scheduled to mature five years after Admission).

The interest rate payable on the New TLA Facility for each interest period is LIBOR + 3.25% per annum. The interest payable on the New TLB Facility for each interest period is LIBOR + 3.75% per annum. The interest rate payable on the New RCF for each interest period is LIBOR + 3.25% per annum. See “—Quantitative and Qualitative Disclosures about Market Risk—Interest rate risk” for information on interest rate hedging.

See paragraph 21 of Part 10: Additional Information for a description of these debt facilities.

Shortly after Admission, the Group will use drawings under the New Facilities, together with the net proceeds of the Global Offer to repay any amounts outstanding under the Senior Facilities Agreement (and cancel the loan facilities thereunder). See Part B of Part 8: Unaudited Pro Forma Information.

Contractual Obligations The Group has various contractual obligations and commercial commitments, which are items for which it is contractually obliged or committed to pay a specified amount at a specific point in time. The table below presents a summary of the Group’s contractual obligations by maturity as at 29 March 2014.

As at 29 March 2014 Less than More than 1 year 1 – 2 years 2 – 5 years 5 years Total £’000 Interest bearing loans ...... 32,480 40,100 151,675 372,413 596,668 Preferred equity certificates ...... 652,873 — — — 652,873 Preference shares ...... 2,055 — — — 2,055 Ordinary share capital ...... 256 — — — 256 Fuel swap contract ...... 19 — — — 19 Forward foreign exchange contracts ...... 1,407 — — — 1,407 Trade payables ...... 60,086 — — — 60,086 Accruals and deferred income ...... 4,923 5,773 18,877 10,206 39,779 Finance lease commitments ...... 22 — — — 22

The table does not include outstanding purchase contracts with suppliers, payments due under arrangements related to provisions and contingent liabilities entered into in the ordinary course of business.

Off balance sheet arrangements As at 29 March 2014, the Group did not have any off balance sheet arrangements.

Quantitative and Qualitative Disclosures about Market Risk The Group is exposed to various market risks, including currency, interest rate, credit and liquidity risks associated with its underlying assets, liabilities, forecast transactions and firm commitments.

The main risks arising from the Group’s financial instruments are currency risk, cash flow interest rate risk, credit risk and liquidity risk. The Directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous years.

The existence of these financial instruments exposes the Group to a number of financial risks, which are described in more detail below. In order to manage the Group’s exposure to those risks, in particular the group’s exposure to currency risk, the group enters into forward foreign currency contracts. No transactions in derivatives of a speculative nature are undertaken.

96 Currency risk The Group is exposed to translation and transaction foreign exchange risk arising from exchange rate fluctuations on its purchases from its overseas suppliers. Translation risk is not considered material to the Group’s business as amounts owed in foreign currency are short term of up to 30 days and are of a relatively modest nature. Transaction exposures, including those associated with forecast transactions, are hedged when known, principally using forward currency contracts to minimise the risk associated with that exposure. Whilst the aim is to achieve an economic hedge, the company does not adopt an accounting policy of hedge accounting for these financial statements.

With the exception of the JA Woll Group, where sales are denominated in euros, all of the Group’s sales are to customers in the UK and there is no currency exposure in this respect. However, approximately 27% of the Group’s purchases in the year ended 29 March 2014 were priced in U.S. dollars and the Group uses forward currency contracts to minimise the risk associated with that exposure.

The following table demonstrates the sensitivity to a reasonably possible change in U.S. dollar year end exchange rates with all other variables held constant.

The impact on the Group’s profit before tax is largely due to changes in the fair value of the foreign currency options.

Change in 29 March 30 March 31 March USD rate 2014 2013 2012 £’000 Effect on profit before tax ...... +2.5% (2,506) (188) (2,515) -2.5% 2,634 192 3,162 Effect on equity ...... +2.5% (1,930) (145) (1,937) -2.5% 2,028 148 2,435

The Group also has balances denominated in Euros, however the sensitivity to these balances was immaterial in each of the years presented.

Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group is exposed to changes in interest rates, as all of its bank borrowings are subject to a floating interest rate based on LIBOR.

The Group uses interest rate swaps to manage the impact of interest rate fluctuations. The interest rates for borrowings up to £390 million under the New Facilities are hedged until 28 March 2015, such that the Group’s LIBOR rates for the New Facilities will be approximately 0.7% for the year ending 28 March 2015. The interest rates for borrowings up to £299 million under the New Facilities are hedged for the year ending 27 March 2016, such that the Group’s LIBOR rates for the New Facilities will be approximately 1.0% for the year ending 27 March 2016.

Credit risk Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group’s principal financial assets are cash and trade debtors. The credit risk associated with cash is limited as the Group’s main counterparty is a UK clearing bank with a high credit rating. The principal credit risk arises therefore from the Group’s trade debtors.

In order to manage credit risk, the Group sets limits for customers based on a combination of payment history and third party credit references. Credit limits are reviewed by the credit controller on a regular basis in conjunction with debt ageing and collection history. Provisions against bad debts are made where judged to be appropriate.

Liquidity risk Liquidity risk is the risk that the Group may have difficulty in obtaining funds in order to meet both its day-to- day operating requirements and debt servicing obligations (interest and debt repayments). This arises mostly in connection with the contractual maturity of its monetary assets and liabilities that result from business activities and from the possibility that its trade debtors may not be able to settle their payment obligations within the normal terms of trade.

97 The Group seeks to ensure that it has sufficient cash or loan facilities to meet all its commitments when they fall due. The Group’s borrowings are subject to quarterly banking covenants against which the Group has had significant headroom to date. The Group has entered into the new RCF to provide for flexibility in meeting its liquidity needs.

Critical Accounting Policies and Estimates The Group’s critical accounting policies are set out in note 3 in Part 7: Historical Financial Information of this document.

98 PART 6: CAPITALISATION AND INDEBTEDNESS STATEMENT

The following tables set out the capitalisation of the Group as at 29 March 2014 and indebtedness of the Group as at 3 May 2014 and have been extracted, without material adjustment, in the case of the capitalisation statement from the accounting records underlying the Group’s Historical Financial Information in Part 7: Historical Financial Information and in the case of the indebtedness statement, from the Group’s accounting records underlying its internal monthly management accounts.

You should read this table together with Part 5: Operating and Financial Review and Part 7: Historical Financial Information.

There has been no material change to the Group's total capitalisation since 29 March 2014 or total indebtedness since 3 May 2014.

1. Capitalisation and Indebtedness Statement

As at 3 May 2014(3) (£'000) Indebtedness Guaranteed ...... — Secured(1) ...... 36,415 Unguaranteed/unsecured(2) ...... 625,376 Total current debt ...... 661,791 Guaranteed ...... — Secured(1) ...... 451,659 Unguaranteed/unsecured(2) ...... — Total non-current debt ...... 451,659 Total debt ...... 1,113,450

As at 29 March 2014 (£'000) Capitalisation Shareholders’ equity ...... Share capital ...... — Statutory and other reserves ...... 3 Retained loss ...... (18,905) Total capitalisation ...... (18,902) Total capitalisation and indebtedness ...... 1,094,548

(1) Includes the TLA Facility and TLB Facility (2) Includes Preferred Equity Certificates (3) Includes JA Woll Group balances available as at 2 May 2014

99 2. Net financial indebtedness

As at 3 May 2014(6) (£'000) Cash ...... 20,809 Cash equivalents ...... — Trading securities ...... — Liquidity ...... — 20,809 Current bank debt(1) ...... (25,385) Current portion of non-current debt(2) ...... (10,250) Other current financial debt(3) ...... (626,156) Current financial debt ...... (661,791) Net current financial indebtedness ...... (640,981) Non-current bank loans(4) ...... (445,435) Bonds issued ...... — Other non-current loans(5) ...... (6,224) Non-current financial indebtedness ...... (451,659) Net financial indebtedness ...... (1,092,640)

(1) Represents the senior RCF overdraft (2) Represents part of the TLA Facility and amortisation to date for the year ending 28 March 2015 (3) Represents Preferred Equity Certificates, finance leases and ordinary share capital (4) Represents part of the TLA Facility, the senior ACF, the TLB Facility and unamortised fees (5) Represents finance leases (6) Includes JA Woll Group balances available as at 2 May 2014

100 PART 7: HISTORICAL FINANCIAL INFORMATION

PART A: REPORT ON COMBINED FINANCIAL INFORMATION

Grant Thornton UK LLP 30 Finsbury Square London EC2P 2YU T +44 (0)20 7383 5100 F +44 (0)20 7184 4301 www.grant-thornton.co.uk

B&M European Value Retail S.A. 16, Avenue Pasteur L-2310 Luxembourg

12 June 2014

Dear Sirs,

B&M European Value Retail 1 S.à r.l. and its subsidiary undertakings (collectively, the “Lux Holdco Group”) We report on the combined financial information of the Lux Holdco Group (the “financial information”) for the three years ended 29 March 2014. This financial information has been prepared for inclusion in the prospectus of B&M European Value Retail S.A. dated 12 June 2014 (the “Prospectus”) on the basis of the accounting policies set out in note 2 of Part B of Part 7 of the Prospectus.

This report is required by item 20.1 of Annex I of the EU Prospectus Directive Regulation 809/2004 (the “PD Regulation”) and is given for the purpose of complying with that item and for no other purpose.

Responsibilities Save for any responsibility arising under article 9(1) of the Luxembourg Prospectus Law to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with item 20.1 of Annex I of the PD Regulation consenting to its inclusion in the Prospectus.

The Directors of B&M European Value Retail S.A. are responsible for preparing the financial information in accordance with International Financial Reporting Standards as adopted by the European Union. It is our responsibility to form an opinion on the financial information and to report our opinion to you.

Basis of opinion We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the financial information. It also included an assessment of the significant estimates and judgements made by those responsible for the preparation of the financial information and whether the accounting policies are appropriate to the entity's circumstances, consistently applied and adequately disclosed.

101 We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial information is free from material misstatement, whether caused by fraud or other irregularity or error.

Opinion In our opinion, the financial information gives, for the purposes of the Prospectus, a true and fair view of the state of affairs of the Lux Holdco Group as at 31 March 2012, 30 March 2013 and 29 March 2014 and of its results, comprehensive income, cash flows, recognised gains and losses and changes in equity for the periods then ended in accordance with the basis of preparation set out in note 2.

Declaration In accordance with article 9(1) of the Luxembourg Prospectus Law, we are responsible for this report as part of the Prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in compliance with item 1.2 of annex I of the Prospectus Regulation.

Yours faithfully,

GRANT THORNTON UK LLP

102 PART B: COMBINED FINANCIAL INFORMATION

The financial information set out below of B&M European Value Retail 1 S.à r.l. and its subsidiary undertakings for the years ended 31 March 2012, 30 March 2013 and 29 March 2014 have been prepared by the directors of the company on the basis set out in note 2.

The accompanying notes represent an integral part of the financial information.

The financial information contained within this document does not constitute statutory accounts. The financial information is derived from the Group’s IFRS statutory financial statements and underlying financial information for the period ended 29 March 2014, and the UK GAAP statutory accounts and underlying financial information for the periods ended 31 December 2012 and 2011.

The financial statements for those periods have been reported on by the company’s auditor and will be delivered to the Registrar of Companies in due course. The reports of the auditor were (i) unqualified and (ii) did not contain statements under section 498(2) or section 498(3) of the Companies Act 2006.

B&M European Value Retail 1 S.à r.l.

Combined statement of comprehensive income

For the year ended 29 March 30 March 31 March 2014 2013 2012 Notes £’000 £’000 £’000 Revenue 1,271,980 992,925 764,160 Cost of sales (839,972) (653,291) (507,138) Gross profit 432,008 339,634 257,022 Administrative expenses (excluding restructuring fees) (315,044) (243,952) (198,053) Restructuring fees 8 — (7,361) — Total administrative expenses (315,044) (251,313) (198,053) Other operating expenses (13,998) (7,924) (3,440) Operating profit 102,966 80,397 55,529 Finance costs 10 (101,195) (18,427) (1,821) Finance income 11 1,855 320 45 Profit before tax 9 3,626 62,290 53,753 Income tax expense 12 (6,939) (18,060) (14,428) (Loss) / profit for the year (3,313) 44,230 39,325

Other comprehensive income (OCI) OCI to be reclassified to profit or loss in subsequent periods Exchange differences on retranslation of subsidiary accounts 5 (2) — Other comprehensive income / (loss) for the year net of tax 5 (2) — Total comprehensive (loss) / income for the year net of tax (3,308) 44,228 39,325

(Loss) / profit attributable to: Equity holders of the parent (3,313) 44,230 39,325 Total comprehensive (loss) / income attributable to: Equity holders of the parent (3,308) 44,228 39,325 (Loss) / earnings per share Basic, (loss) / profit attributable to ordinary equity holders of the parent (£) 13 (0.14) 1.85 1.64 Diluted, (loss) / profit attributable to ordinary equity holders of the parent (£) 13 (0.14) 1.85 1.64

103 B&M European Value Retail 1 S.à r.l.

Combined statement of financial position

As at 29 March 30 March 31 March 2014 2013 2012 Notes £’000 £’000 £’000 Assets Non-current assets Goodwill 14 807,496 807,496 57,415 Other intangible assets 14 94,307 94,020 412 Investment in associates 2,093 1,855 — Property, plant and equipment 15 64,996 42,040 27,921 Other non-current financial assets 25 1,819 — — Deferred tax assets 12 146 2,812 1,323 Total non-current assets 970,857 948,223 87,071

Current assets Inventories 16 170,371 132,139 109,245 Trade and other receivables 17 45,951 30,150 28,670 Other current financial assets 25 — 425 — Income tax receivable 12 359 — — Cash and cash equivalents 18 24,902 26,403 12,473 Total current assets 241,583 189,117 150,388 Total assets 1,212,440 1,137,339 237,459

Equity Share capital 19 — — (1,225) Foreign Exchange Reserve (3) 2 — Capital redemption reserve — — (5,445) Retained loss / (earnings) 18,905 15,592 (97,563) Total Equity 18,902 15,594 (104,233)

Liabilities Non-current liabilities Interest-bearing loans and borrowings 19,21 (423,930) (983,522) (30,941) Other non-current financial liabilities 25 — — (680) Provisions 22 (2,149) (2,260) (1,660) Other liabilities 20 (34,856) (22,556) (12,740) Deferred tax liabilities 12 (19,012) (21,447) (929) Total non-current liabilities (479,947) (1,029,785) (46,950)

Current liabilities Trade and other payables 20 (110,233) (93,325) (66,378) Interest-bearing loans and borrowings 21 (632,741) (18,974) (8,400) Other current financial liabilities 25 (1,447) — (572) Income tax payable 12 — (4,348) (8,671) Provisions 22 (6,974) (6,501) (2,255) Total current liabilities (751,395) (123,148) (86,276) Total liabilities (1,231,342) (1,152,933) (133,226) Total Equity and Liabilities (1,212,440) (1,137,339) (237,459)

104 B&M European Value Retail 1 S.à r.l.

Combined statement of changes in equity

Foreign Capital Share exchange Retained redemption Total capital reserve earnings reserve equity £’000 £’000 £’000 £’000 £’000 Balance as at 27 March 2011 1,225 — 58,238 5,445 64,908 Profit for the year — — 39,325 — 39,325 Other comprehensive income for the year — — — — — Total comprehensive income — — 39,325 — 39,325 Balance as at 31 March 2012 1,225 — 97,563 5,445 104,233

Balance as at 1 April 2012 1,225 — 97,563 5,445 104,233 Transactions with Owners Reduction in Firesource Share Capital (475) — 475 — — Effect of restructure on 6 March 2013 (750) — (157,860) (5,445) (164,055) Total for Transactions with Owners (1,225) — (157,385) (5,445) (164,055) Profit for the year — — 44,230 — 44,230 Other comprehensive loss for the year — (2) — — (2) Total comprehensive (loss) / income — (2) 44,230 — 44,228 Balance as at 30 March 2013 — (2) (15,592) — (15,594)

Balance as at 31 March 2013 — (2) (15,592) — (15,594) Loss for the year — — (3,313) — (3,313) Other comprehensive income for the year — 5 — — 5 Total comprehensive income / (loss) — 5 (3,313) — (3,308) Balance as at 29 March 2014 — 3 (18,905) — (18,902)

105 B&M European Value Retail 1 S.à r.l.

Combined statement of cash flows

For the year ended 29 March 30 March 31 March 2014 2013 2012 Notes £’000 £’000 £’000 Cash flows from operating activities Cash generated from operations 23 89,503 103,855 51,525 Income tax paid 12 (11,415) (23,030) (8,635) Net cash flows from operating activities 78,088 80,825 42,890

Cash flows from investing activities Acquisition of SBR Europe as subsidiary 8 — (765,452) — Acquisition of Associates — (1,060) — Deferred consideration regarding subsidiary — (5,000) — Purchase of property, plant and equipment (32,881) (21,792) (9,441) Purchase of intangible fixed assets (474) (74) (315) Proceeds from sale of property, plant and equipment 292 438 165 Interest received 35 127 29 Net cash flows from investing activities (33,028) (792,813) (9,562)

Cash flows from financing activities Proceeds from borrowings — 811,409 — Fees paid and included within borrowings 8 — (33,135) — Fees paid in relation to debt finance and expensed 8 — (10,550) — Repayment of borrowings (18,974) (39,341) (22,259) Interest Paid (27,358) (2,131) (1,613) Payment of finance lease interest and charges (228) (335) (528) Net cash flows from financing activities (46,560) 725,917 (24,400)

Net (decrease) / increase in cash and cash equivalents (1,501) 13,930 8,928 Cash and cash equivalents at the beginning of the year 26,403 12,473 3,545 Cash and cash equivalents at the end of the year 18 24,902 26,403 12,473

Cash and cash equivalents comprise: Cash at bank and in hand 24,902 26,403 12,473 24,902 26,403 12,473

106 B&M European Value Retail 1 S.à r.l.

Notes to the combined financial information 1. Corporate information The financial information of B&M European Value Retail 1 S.à.r.l and its subsidiaries (collectively, the Group) for the years ended 29 March 2014, 30 March 2013 and 31 March 2012 and as at those dates was authorised for issue in accordance with a resolution of the directors on 29 May 2014. B&M European Value Retail 1 S.à.r.l was incorporated on 27 November 2012 as a private limited company (a “societe a responsabilite limitee”) and registered in Luxembourg with registered number B 173.461. The Company’s registered address is 5, rue Guillaume Kroll, L-1882, Luxembourg.

The principal activity of the Group is that of discount retailers.

2. Nature of operations and basis of presentation The basis of preparation and accounting policies used in preparing the combined financial information for the years ended 31 March 2012, 30 March 2013 and 29 March 2014 are set out below. These accounting policies have been consistently applied in all material respects to all the periods presented unless otherwise stated.

Basis of preparation On 6 March 2013, B&M European Value Retail 1 S.à.r.l. (Lux Holdco) acquired control of B&M European Value Retail 2 S.à.r.l. (SBR Europe) and became the holding company for the Group. This business combination is discussed in further detail in note 8. As a result of the acquisition, the structure of the group carrying out the Group’s business has not been the same throughout the entire period covered by the financial information.

Prior to 6 March 2013, the Lux Holdco group has not constituted a separate legal group. As a result, prior to this date, combined financial information has been prepared on a basis that combines the results and assets and liabilities of each of the companies constituting the Group by applying the consolidation procedures of IFRS 10 Consolidated Financial Statements (‘IFRS 10’) and include the assets, liabilities, revenues and expenses that management has determined are specifically attributable to each entity included in the combined financial information.

The Group comprised the following entities during the years presented:

Combined financial information for the Combined financial information for the year Combined financial information for the year ended 29 March 2014 ended 31 March 2012 year ended 30 March 2013 (Lux Holdco Group) Firesource Limited (Firesource) Firesource Limited Firesource Limited B&M Retail Limited (B&M) B&M Retail Limited B&M Retail Limited Opus Homewares Limited (Opus) Opus Homewares Limited Opus Homewares Limited Meltore Limited (Meltore) Meltore Limited Meltore Limited B&M European Value Retail 2 B&M European Value Retail 2 S.à.r.l. S.à.r.l. (Parent company of Firesource) (SBR Europe) B&M European Value Retail Holdco B&M European Value Retail Holdco 1 Ltd (UK Holdco 1) 1 Ltd B&M European Value Retail Holdco B&M European Value Retail Holdco 2 Ltd (UK Holdco 2) 2 Ltd B&M European Value Retail Holdco B&M European Value Retail Holdco 3 Ltd (UK Holdco 3) 3 Ltd B&M European Value Retail Holdco B&M European Value Retail Holdco 4 Ltd (UK Holdco 4) 4 Ltd B&M European Value Retail 1 B&M European Value Retail 1 S.à.r.l. S.à.r.l. (Lux Holdco)

Note during the year ended 31 March 2012, Firesource Limited controlled B&M Retail Limited, Opus Homewares Limited and Meltore Limited.

Refer to note 31 for details of the principal activity and country of incorporation of these entities.

107 B&M European Value Retail 1 S.à r.l.

Notes to the combined financial information The combined financial information has been prepared in accordance with the requirements of the London Stock Exchange Listing Rules and in accordance with this basis of preparation. This basis of preparation describes how the financial information has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) except as described below. References to ‘‘IFRS’’ hereafter should be construed as references to IFRS as adopted by the EU.

Prior to 6 March 2013, Lux Holdco did not control SBR Europe and consequently is not permitted by IFRS 10 to present consolidated financial information. Accordingly the financial information which has been prepared specifically for the purpose of the prospectus is prepared on the following basis for each of the three periods presented:

Accounting period ended 31 March 2012 (the ‘Initial Combined Period’) The results for the 12 months ended 31 March 2012 have been prepared on a basis of consolidating the results of Firesource, B&M, Opus and Meltore (the “Firesource group”) from 27 March 2011 to 31 March 2012.

The statement of comprehensive income and statement of cash flows for the year ended 31 March 2012 and the statement of financial position as at 31 March 2012 represent the consolidated statement of comprehensive income, statement of cash flows and statement of financial position of the Firesource group at that date.

The entities which comprise the Firesource group have been combined by applying the principles underlying the consolidation procedures of IFRS 10 (the ‘‘Initial Combination’’) for the period 27 March 2011 to 31 March 2012 (the ‘‘Initial Combined Period’’). Internal transactions within the Firesource group have been eliminated on combination.

Accounting period ended 30 March 2013 (the ‘Comparative Combined Period’) The results for the 12 months ended 30 March 2013 have been prepared on a basis of aggregating the results of the Firesource group from 1 April 2012 to 30 March 2013 with the results of SBR Europe, Lux Holdco and UK Holdco’s 1 to 4 from their respective dates of incorporation (see note 31) to 30 March 2013. The balance sheet as at 30 March 2013 represents the combined balance sheet of Lux Holdco and its subsidiaries as at that date following Lux Holdco’s acquisition of SBR Europe on 6 March 2013.

Prior to 6 March 2013, the entities which comprise the Group have been combined by applying the principles underlying the consolidation procedures of IFRS 10. Internal transactions within the Group have been eliminated on combination.

Subsequent to 6 March 2013, the entities which comprise the Lux Holdco group have been combined by applying the principles underlying the consolidation procedures of IFRS 10 for the period 6 March 2013 to 30 March 2013. Internal transactions within the Group have been eliminated on consolidation. A company applies the purchase method as defined by IFRS 3 Business Combinations (IFRS 3) on the date of acquisition of its subsidiaries, which is also the date from which those subsidiaries are consolidated, hence the Lux Holdco group does present a consolidated statement of financial position as at 30 March 2013. Lux Holdco has applied IFRS 3 from 6 March 2013 as detailed in note 8.

Departures from IFRS IFRS does not provide for the preparation of combined financial information, and accordingly in preparing the combined financial information certain accounting conventions commonly used for the preparation of historical financial information for inclusion in investment circulars as described in the Annexure to SIR 2000 (Investment Reporting Standard applicable to public reporting engagements on historical financial information) issued by the UK Auditing Practices Board have been applied. The application of these conventions results in the following material departures from IFRS. In other respects IFRS has been applied. • The financial information does not comply with IFRS 10 because, as explained above, prior to 6 March 2013, Lux Holdco did not control SBR Europe or the Firesource group and consequently is not permitted under IFRS 10 to present consolidated financial information for the years ended 31 March 2012 and 30 March 2013.

108 B&M European Value Retail 1 S.à .r.l.

Notes to the combined financial information The combined historical financial information has therefore been prepared on a combined basis by applying the principles underlying the consolidation procedures of IFRS 10 for these periods, except that the Lux Holdco group does present a consolidated statement of financial position as at 30 March 2013. • The financial information for the years ended 31 March 2012, 30 March 2013 and 29 March 2014 does not constitute a set of general purpose financial statements under paragraph 2 of IAS 1 and consequently Lux Holdco does not make an explicit and unreserved statement of compliance with IFRS as contemplated by paragraph 16 of IAS 1. • A company is only permitted to apply the first-time adoption rules of IFRS 1 in its first set of financial statements where such an unreserved statement of compliance has been made. Although such a statement has not been made here, the combined financial information for the Lux Holdco group has been prepared as if the date of transition to IFRS is from its date of incorporation on 27 November 2012 and the requirements of IFRS 1 have been applied to that information from that date. For the purpose of the financial information relating to the Firesource group, prior to the date of incorporation of the Lux Holdco group, a date of transition to IFRS of 1 April 2011 has been applied. IFRS 1 allows certain exemptions in the application of particular IFRS to prior periods in order to assist companies with the transition process. For the purpose of presenting the financial information for the Initial Combined Period from 1 April 2011, the exemptions applied are detailed in note 33. The Lux Holdco group has not previously prepared or reported any combined financial information or statements, and therefore no reconciliations from previous financial information to IFRS have been presented. • Earnings per share is disclosed but not as required by IAS 33 Earnings Per Share (IAS 33) as the historical financial information has been prepared on a combined basis, rather than a legal consolidation.

The following summarises the accounting and other principles applied in preparing the combined historical financial information: • Transactions and balances between the entities in the Firesource group, SBR Europe group and Lux Holdco group have been eliminated on combination for the relevant periods detailed above. • Equity for the Initial Combined Period comprises share capital and reserves of the companies within the Initial Combination, after eliminating investments in the companies within the Initial Combination, being the share capital and reserves for the Firesource group. Equity for the Comparative Combined Period comprises share capital and reserves of the companies within the Group, after eliminating investments in the companies within the Group, being the share capital and reserves for the Lux Holdco group. • The combined historical financial information reflects overheads, interest payable and tax charges based on the results for the period by the entities within the Initial Combined Periods and Comparative Combined Period respectively.

Accounting period ended 29 March 2014 The combined results for the 12 months ended 29 March 2014 have been prepared in accordance with IFRS except in respect of the following matters: • IAS 1 Presentation of Financial Statements (IAS 1) requires disclosure of comparative information in respect of the previous period of all amounts reported in the financial statements. As explained above under “Accounting period ended 31 March 2012”, “Accounting period ended 30 March 2013” and “Departures from IFRS”, the comparative financial information for these periods has been prepared on the basis as set out above which in certain specific regards is not consistent with that which has been applied in preparing the financial information for 2014. • The combined financial information does not constitute a set of general purpose financial statements under paragraph 2 of IAS 1 and consequently Lux Holdco does not make an explicit and unreserved statement of compliance with IFRS as contemplated by paragraph 16 of IAS 1.

109 B&M European Value Retail 1 S.à r.l.

Notes to the combined financial information As a result of the basis of preparation adopted, the combined historical financial information for the years ended 31 March 2012 and 30 March 2013 may not be comparable to the information in respect of the year ended 29 March 2014 in the following respects: • The income statement as presented includes profit before tax of £53.8 million related to the period 27 March 2011 to 31 March 2012 and £80.3 million related to the period 1 April 2012 to 5 March 2013 during which Lux Holdco did not control the Firesource group and does not reflect the effect of the application of the purchase method on 6 March 2013 in accounting for the acquisition of SBR Europe (including the Firesource group) by Lux Holdco. • The change in the capital structure resulting from the acquisition of SBR Europe has not been reflected in the combined historical financial information for the periods from 27 March 2011 to 5 March 2013 and therefore the financing costs may not be comparable.

The preparation of financial information on the basis prepared above requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The combined financial information is presented in pounds sterling and all values are rounded to the nearest thousand (£000), except when otherwise indicated.

3. Principal accounting policies The combined financial information has been prepared on a historical cost basis, except for derivative financial instruments which have been measured at fair value.

Basis of consolidation The Group has chosen to early adopt IFRS 10 Consolidated Financial Statements (IFRS 10). IFRS 10 replaces IAS 27 Consolidated and Separate Financial Statements that addresses the accounting for consolidated financial statements. IFRS 10 establishes a single control model that applies to all entities. The adoption of IFRS 10 has not had any impact on the currently held investments of the Group.

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has: • Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee) • Exposure, or rights, to variable returns from its involvement with the investee, and • The ability to use its power over the investee to affect its returns

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: • The contractual arrangement with the other vote holders of the investee • Rights arising from other contractual arrangements • The Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary, excluding the situations as outlined in the basis of preparation.

110 B&M European Value Retail 1 S.à r.l.

Notes to the combined financial information Business Combinations Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at the acquisition date fair value. Acquisition-related costs are expensed depending on their nature with costs of raising finance amortised over the term of the relevant element of finance provided and the remainder expensed when incurred.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the gain is recognised immediately in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units or group of cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Going Concern The Directors have made appropriate enquiries and formed a judgement at the time of approving the financial information that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason the Directors continue to adopt the going concern basis in preparing the financial information.

Foreign currencies The financial information is presented in pounds sterling. The functional currency for all group members is pounds sterling, except B&M European Value Retail 2 S.à.r.l. whose functional currency is Euros.

B&M European Value Retail 2 S.à.r.l. (SBR Europe) has been consolidated into the group via retranslation of their accounts in line with IAS 21 The Effects of Changes in Foreign Exchange Rates. The assets and liabilities of SBR Europe are translated into pounds sterling at the year end exchange rate. The revenues and expenses are translated into pounds sterling at the average monthly exchange rate during the year. Any resulting foreign exchange difference is cumulatively recorded in the Foreign Exchange Reserve with the annual effect being charged/credited to Other Comprehensive Income.

Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction, though in practice an average rate is used. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date. All exchange differences, arising on settlement or on the retranslation of year end monetary cash and liabilities, are dealt with through profit or loss.

Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable.

Sale of goods Revenue is the total amount receivable by the Group for goods supplied, in the ordinary course of business excluding VAT and trade discounts, returns and relevant vouchers and offers. Store retail turnover is recognised at the initial point of sale of goods to customers, when the risks and rewards of the ownership of the goods have been transferred to the buyer.

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Notes to the combined financial information Interest For all financial instruments measured at amortised cost, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability. Interest income is included in finance income in profit and loss.

Segment reporting Operating segments are reported in a manner consistent with internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the executive directors of the Group. The board is responsible for assessing the performance of the business for the purpose of making decisions about resources to be allocated.

Goodwill Goodwill is initially measured at cost, being the excess of the consideration transferred over the fair value of the net identifiable assets acquired and liabilities assumed at the date of acquisition.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to the relevant cash-generating units that are expected to benefit from the combination.

Goodwill is tested for impairment at each year end and at any time where there is any indication that goodwill may be impaired. Internally generated goodwill is not recognised as an asset.

Other intangible assets Intangible assets acquired separately, including computer software, are measured on initial recognition at cost comprising the purchase price and any directly attributable costs of preparing the asset for use.

The cost of intangible assets acquired in a business combination, including the brand is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation begins when an asset is available for use and is calculated on a straight line basis to allocate the cost of the asset over its estimated useful life as follows:

Computer software acquired 4 years Brand Indefinite

Amortisation and impairment are included within administrative expenses in profit and loss.

Property, plant and equipment Property, plant and equipment is carried at cost less accumulated depreciation and accumulated impairment losses. Cost comprises purchase price and directly attributable costs. Freehold land is not depreciated. For all other property, plant and equipment, depreciation is calculated on a straight line basis to allocate cost, less residual value of the assets, over their estimated useful lives as follows:

Freehold buildings 2% straight line Leasehold land and buildings Life of lease Plant, fixtures and equipment 10%–25% straight line Fixtures, fittings and vehicles 20%–25% straight line

Residual values and useful lives are reviewed at least each year end and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.

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Notes to the combined financial information Impairment of non-financial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating units (CGU) fair value less costs to sell and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

The Group bases its impairment calculation on detailed budgets and forecasts which are prepared separately for each of the Group’s CGU’s to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations, including impairment on inventories, are recognised in the income statement in those expense categories consistent with the function of the impaired asset.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount.

A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the income statement.

Inventories Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs to sell.

Cash and cash equivalents Cash and cash equivalents comprise cash at bank and in hand, less bank overdrafts. Income taxes Current income tax Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Group operates and generates taxable income. Current income tax relating to items recognised directly in equity is recognised in equity and not in profit or loss.

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Notes to the combined financial information Deferred tax Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for all taxable temporary differences, except: • When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; • In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except: • When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; • In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Provisions Provisions are recognised when a present obligation (legal or constructive) exists as a result of a past event and where it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the amount can be reliably estimated.

Provisions are discounted where the time value of money is considered to be material.

In respect of leased properties, where the economic benefits from occupying the leased properties are less than the obligations payable under the lease (onerous contract), a provision is made for the present value of the estimated future net cash outflows for each lease. A dilapidation provision is in place based on the Group’s estimate of dilapidation charges.

Financial instruments 1) Financial Assets Initial recognition and measurement The classification of financial instruments is determined at initial recognition. The group has the following types of financial assets; Trade and other receivables and cash which are classified within the IAS 39 definition of loans and receivables and derivative contracts which are classified within the IAS 39 definition of fair value through profit and loss. All financial assets are initially recognised at fair value plus transaction costs other than for financial assets carried at fair value through profit or loss.

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Notes to the combined financial information The Group does not have any held-to-maturity or available-for-sale financial assets.

Subsequent measurement The subsequent measurement of financial assets depends on their classification as described below:

Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method (EIR), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income. The losses arising from impairment are recognised in finance costs.

Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IAS 39. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with changes in fair value recognised in finance income or finance costs.

Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when the rights to receive cash flows from the asset have expired and the entity has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full and either (a) the entity has transferred substantially all the risks and rewards of the asset, or (b) the entity has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.

2) Financial Liabilities Initial recognition and measurement Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss or loans and borrowings. The entity determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings, subsequently carried at amortised cost. This includes directly attributable transaction costs. For financial liabilities not subsequently carried at fair value through profit or loss. The entity’s financial liabilities include trade and other payables, bank overdrafts, loans and borrowings and derivative financial instruments.

Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held-for-trading. Financial liabilities are classified as held-for-trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IAS 39. Gains or losses on liabilities held-for-trading are recognised in finance income or finance costs as appropriate.

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Notes to the combined financial information Loans and borrowings After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the income statement when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs.

Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

Fair value of financial instruments The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to mark-to-market quotations obtained from the relevant bank (bid price for long positions and ask price for short positions), without any deduction for transaction costs.

3) Derivative financial instruments Initial recognition and subsequent measurement The Group uses derivative financial instruments such as forward currency contracts and interest rate swaps to reduce its foreign currency risks and interest rate risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Leases The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date. The arrangement is assessed for whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

Entity as a lessee Finance leases that transfer to the Group substantially all of the risks and benefits incidental to ownership of the leased item, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Operating lease payments are recognised as an operating expense in the income statement on a straight-line basis over the lease term.

Pensions and other post-employment benefits The Group operates a defined contribution scheme and contributions are expensed to profit or loss.

4. Significant accounting judgements, estimates and assumptions The preparation of the financial information in accordance with IFRS requires management to make judgements, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the

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Notes to the combined financial information accompanying disclosures. Although these estimates are based on management’s best knowledge of the amount, events or actions, actual results may ultimately differ from those estimates. The key judgments, estimates and assumptions used are set out below.

Judgements, estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the financial information was prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

Classification of items related to equity The Group’s equity structure is outlined in note 19. The ordinary share capital, preference shares and preferred equity certificates have been classified as debt items due to an unavoidable requirement to pay cash on a redemption event.

The balances were therefore initially recognised at fair value on the balance sheet with such fair value considered equal to the par value of the items, and a redemption date of 31 July 2014 being management’s best estimate of the actual redemption date at the date of initial recognition.

Impairment of non-financial assets Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use.

The fair value less costs to sell calculation is based on available data from binding sales transactions, conducted at arm’s length for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested.

The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows and the growth rate used for extrapolation purposes. The key assumptions used to determine the recoverable amount for the different CGUs, including a sensitivity analysis, are disclosed and further explained in note 14.

Deferred tax assets Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

The Group had £0.1m (2014), £2.8m (2013) and £1.3m (2012) of deferred tax assets at each year end. These assets relate to the temporary difference between the recognition of tax deductions in the relevant entity’s tax return in comparison to the timing of recognition of the expense as a result of (i) the amortisation profile of the reverse lease premiums in the combined financial information (2012 and 2013), (ii) the fair value of derivative contracts (2012), (iii) the LTIP provision (2013) and (iv) depreciation on fixed assets (2014). At the year end dates management has made the judgment that when these losses were likely to become available for tax purposes, then there will be enough profit available for these to be used. Therefore the deferred tax assets have been recognised.

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Notes to the combined financial information Provisions Dilapidations As part of the identification and measurement of assets and liabilities, the Group has recognised a provision for dilapidations associated with the obligation in operating lease agreements to return certain store premises to the landlord in the condition in which they were let to the Group. In determining the value of the provision, assumptions and estimates are made in relation to the expected cost to make good a store and the expected timing of those costs.

Onerous Lease In respect of leased properties, where economic benefits from occupying the leased properties are less than the obligations payable under the lease, a provision is made for the present value of the estimated future cash outflows for each lease. The provision unwinds on a systematic basis. The provision is reviewed on a regular basis

Long-term Incentive Plan (LTIP) Management has estimated the value of the LTIP as at the year end 30 March 2013 based upon information available at that date. The LTIP matured on 31 December 2013.

Other Provisions The other provisions principally relate to disputes concerning property issues and customer claims. The directors believe it would be seriously prejudicial to disclose any further information in relation to these provisions as the disputes are ongoing.

5. Standards issued not yet effective The standards and interpretations that are issued but not yet effective up to the date of issuance of the Group’s financial information are disclosed below. The Group intends to adopt these standards, if applicable, when they become effective.

IAS 32 Offsetting Financial Assets and Financial Liabilities—Amendments to IAS 32 These amendments clarify the meaning of “currently has a legally enforceable right to set-off”. The amendments also clarify the application of the IAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms that are not simultaneous. These amendments are not expected to impact the Group’s financial position or performance and become effective for annual periods beginning on or after 1 January 2014.

IFRS 9 Financial Instruments IFRS 9, as issued, reflects the first phase of the IASB’s work on the replacement of IAS 39 and applies to classification and measurement of financial assets and financial liabilities as defined in IAS 39. The Group will determine the effect of this first phase in conjunction with the other phases, when the final standard including all phases is issued. In July 2013 the IASB tentatively decided to defer the mandatory effective date of IFRS 9 and has left open the effective date pending the finalisation of key phases of the project.

6. Segment analysis For management purposes, the Group is organised into one reportable segment, being the retail segment.

No operating segments have been aggregated to form the reportable operating segment.

The executive directors monitor the operating results of the retail segment for the purpose of making decisions about resource allocation and performance assessment. The retail segment performance is evaluated based on

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Notes to the combined financial information profit or loss under UK GAAP and excludes certain items identified as part of the ‘corporate segment’, hence a reconciliation is detailed below to the IFRS financial information presented for the Group in this financial information.

The Group’s financing (including finance costs and finance income) and income taxes are managed on a Group basis.

IFRS adjustments and Retail Corporate eliminations Combined Year ended 29 March 2014 £’000 £’000 £’000 £’000 Revenue 1,271,980 — — 1,271,980 Segment gross profit 432,008 — — 432,008 Segment EBITDA 205,494 (84,710) (8,070) 112,714 Interest received — 35 1,820 1,855 Interest expense — (101,195) — (101,195) Income tax expense — (8,410) 1,471 (6,939) Segment profit 205,494 (203,882) (4,925) (3,313) Total assets 180,847 1,022,186 9,407 1,212,440 Total liabilities (34,019) (1,182,577) (14,746) (1,231,342) Other disclosures: Capital expenditure — 33,105 (224) 32,881

IFRS adjustments and Retail Corporate eliminations Combined Year ended 30 March 2013 £’000 £’000 £’000 £’000 Revenue 992,925 — — 992,925 Segment gross profit 339,634 — — 339,634 Segment EBITDA 159,920 (68,990) (2,883) 88,047 Interest received — 128 192 320 Interest expense — (18,427) — (18,427) Income tax expense — (18,704) 644 (18,060) Segment profit 159,920 (116,394) 704 44,230 Total assets 140,333 986,627 10,379 1,137,339 Total liabilities (24,826) (1,117,316) (10,791) (1,152,933) Other disclosures: Capital expenditure — 21,407 385 21,792

IFRS adjustments and Retail Corporate eliminations Combined Year ended 31 March 2012 £’000 £’000 £’000 £’000 Revenue 764,160 — — 764,160 Segment gross profit 257,022 — — 257,022 Segment EBITDA 114,417 (48,376) (3,224) 62,817 Interest received — 45 — 45 Interest expense — (1,629) (192) (1,821) Income tax expense — (15,235) 807 (14,428) Segment profit 114,417 (75,514) 422 39,325 Total assets 118,203 114,185 5,071 237,459 Total liabilities (16,991) (109,850) (6,385) (133,226) Other disclosures: Capital expenditure — 9,201 240 9,441

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Notes to the combined financial information 7. Capital management For the purpose of the Group’s capital management, capital includes issued capital and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Group’s capital management is to maximise the shareholder value.

In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current or prior period.

The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.

To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Group monitors its capital structure by using the net debt statistic, with a target for the Rolling Credit Facility component of this to be £nil by the end of December. This target was met in December 2013, with the RCF being brought into place in March 2013.

The Group uses the following definition of net debt :

Interest bearing loans and borrowings less cash and short-term deposits.

The interest bearing loans figure used is the gross amount of cash borrowed at that time, as opposed to the carrying value under the amortised cost method, and does not include the equity items which have been classed as debt (since these do not form part of this statistic as reviewed by management).

29 March 2014 30 March 2013 31 March 2012 Year ended £’000 £’000 £’000 Interest bearing loans and borrowings (note 25) (457,625) (476,599) (39,341) Less: Cash and short-term deposits 24,902 26,402 12,473 Net debt (432,723) (450,197) (26,868)

Prior to the changes in group structure in March 2013, Firesource group also used the net debt statistic in order to monitor the capital structure.

8. Business combinations Acquisition of B&M European Value Retail 2 S.à.r.l. (SBR Europe) On 6 March 2013, the Group acquired 100% of the voting shares of B&M European Value Retail 2 S.à.r.l. (SBR Europe), an unlisted company based in Luxembourg and specialising in discount retail in the UK. The acquisition has been accounted for via the acquisition method of accounting.

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Notes to the combined financial information Assets acquired and liabilities assumed The fair values of the identifiable assets and liabilities of SBR Europe as at the date of acquisition were:

Fair value recognised on acquisition

£’000 Assets Property, plant and equipment 40,764 Investment in associates 1,816 Cash and cash equivalents 7,607 Receivables and other assets 7,567 Inventory 135,661 Deferred tax asset 2,726 Brand 93,700 Liabilities Payables and accruals 77,584 Corporation tax accrual 7,280 Dilapidation provision 3,040 Deferred tax liability 20,737 Total fair value of assets acquired 181,200 Goodwill asset recognised 807,496 Total consideration 988,696

The fair value of the trade receivables and other assets amounted to £7.6m which is equal to the gross value of trade receivables since none were impaired. It is expected that the full contractual amounts can be collected.

The deferred tax liability comprises the tax effect of the recognition of the intangible brand asset, accelerated capital allowances, the fair value of the foreign exchange derivatives and other temporary differences.

The deferred tax asset comprises the tax effect of the IFRS adjustment to the reverse lease premium balance.

The brand intangible asset has been recognised based upon the relief from royalty approach and is assumed to have an indefinite life. The deferred tax liability recognised specifically relating to this asset was £19.7m and is included in the deferred tax liability above.

The goodwill of £807.5m largely relates to the growth potential of the business, with smaller elements relating to the workforce and location of the B&M stores. None of the elements which make up goodwill can, or are not material enough to, be recognised as a separate intangible asset. This goodwill balance has been tested for impairment against management forecasts – see note 14.

None of the goodwill recognised is expected to be deductible for income tax purposes.

From the date of acquisition, SBR Europe has contributed £79.3m of revenue and £6.1m to the profit before tax from continuing operations of the Group. Over the year to 30 March 2013 SBR Europe has contributed £992.9m of revenue and £86.2m profit before tax to the combined financial information presented herein.

As the cashflow is stated in terms of the combined position of the Group, the consideration transferred in cash has not been taken net of cash acquired. This is because cash acquired was already part of Firesource group which has been combined to produce the statement, and to net it off would double count that amount.

Purchase consideration

£’000 Consideration settled in cash 765,452 Total Cash 765,452 Consideration settled in loan notes 223,244 Total Consideration 988,696

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Notes to the combined financial information Overall Fees of £51.1m were incurred in completing the acquisition. These fees have been allocated as follows;

£’000 Fees immediately expensed through administrative expenses 6,356 Fees immediately expensed through finance costs 10,550 Fees netted against facility loan balances 33,135 Fees included in prepayments and released over 12 months 90 Vendor due diligence expensed through administrative expenses 1,005 Total Deal Fees 51,136

The fees netted against the loan balances are released using the amortised cost method over the term of the loan to which they relate.

9. Profit before tax information The table below sets out selected information included in profit before tax.

29 March 30 March 31 March 2014 2013 2012 Year ended £’000 £’000 £’000 Included in cost of sales: Cost of inventories recognised as an expense 848,632 662,295 513,086 Included in administrative expenses: Employee benefit expense: - Salaries and wages 142,727 110,156 86,078 - Social Security 6,110 4,955 4,805 - Pension costs 382 39 41 Auditors remuneration 150 49 49 Payments to auditors in respect of non-audit services 110 8 7 Depreciation of PPE not held under finance lease 9,379 7,302 6,970 Depreciation of PPE held under finance lease 182 182 183 Amortisation of intangible assets 188 166 135 Net foreign exchange differences 81 60 (4) Operating lease rentals 59,762 44,902 35,427

10. Finance cost

29 March 30 March 31 March 2014 2013 2012 Year ended £’000 £’000 £’000 Interest on debt and borrowings 33,897 3,291 1,594 Interest on preferred equity certificates, preference shares and ordinary share capital 67,295 4,570 — Finance charges payable under finance leases and HP contracts 3 16 35 Total interest expense 101,195 7,877 1,629 Costs incurred on raising debt finance — 10,550 — Loss on financial instruments at fair value through profit or loss — — 192 Total finance costs 101,195 18,427 1,821

11. Finance income

29 March 30 March 31 March 2014 2013 2012 Year ended £’000 £’000 £’000 Interest income on loans and bank accounts 36 128 45 Gain on financial instruments at fair value through profit or loss 1,819 192 — Total finance income 1,855 320 45

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Notes to the combined financial information 12. Tax (i) Tax included in the combined income statement 29 March 30 March 31 March 2014 2013 2012 Year ended £’000 £’000 £’000 Current tax (6,708) (18,708) (14,827) Deferred tax (231) 648 398 (6,939) (18,060) (14,429)

(ii) Tax reconciliation In each year, the Group’s effective rate of tax has been higher than the statutory rate, as shown in the following table. 29 March 30 March 31 March Year ended 2014 2013 2012 Effective rate of tax 191.4% 29.2% 26.8% Statutory rate of tax 23.0% 24.0% 26.0%

This has been reconciled as follows.

29 March 30 March 31 March 2014 2013 2012 Year ended £’000 £’000 £’000 Profit before tax 3,626 62,290 53,753 Tax credit/(charge) at the UK statutory rates above (834) (14,950) (13,976) Tax effect of; IFRS Adjustments on the fair value of financial instruments — 50 (38) IFRS Adjustments on Lease Incentives — (134) (68) Income not taxable 55 71 52 Expenses not deductible (7,251) (2,914) (321) Difference between capital allowances and depreciation 736 (402) (217) Other short term timing differences 66 754 (668) Other permanent differences (659) 69 — Foreign operation taxed at local tax rate (42) 21 — Adjustment in respect of prior years 34 (625) 807 Change in deferred tax rate 956 — — Income tax expense in the combined income statement (6,939) (18,060) (14,429)

(iv) Analysis of deferred tax Deferred tax relates to the following: Combined statement of financial Combined statement of position (year ended) comprehensive income (year to) 29 March 30 March 31 March 29 March 30 March 31 March 2014 2013 2012 2014 2013 2012 £’000 £’000 £’000 £’000 £’000 £’000 Accelerated tax depreciation 146 (590) (590) 736 — (41) Fair value of derivative contracts — (97) 288 97 (386) 288 Lease Incentive IFRS adjustment — 2,065 1,035 (2,065) 1,030 518 Relating to the intangible brand asset (18,740) (19,677) — 937 — — Other temporary differences (272) (336) (339) 64 4 (367) Total deferred tax expense/(income) (231) 648 (398) Net deferred tax assets/(liabilities) (18,866) (18,635) 394

There were no tax movements within other comprehensive income in the years under review.

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Notes to the combined financial information The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

13. (Loss) / earnings per share Basic earnings per share amounts are calculated by dividing the net profit for each year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during each year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during each year plus the weighted average number of ordinary shares that would be issued on conversion of any dilutive potential ordinary shares into ordinary shares. There are no dilutive potential ordinary shares for the years ended 31 March 2012, 30 March 2013 and 29 March 2014.

The following reflects the income and share data used in the basic and diluted earnings per share computations:

29 March 30 March 31 March 2014 2013 2012 Year ended £’000 £’000 £’000 Total comprehensive income attributable to ordinary equity holders of the parent (3,308) 44,228 39,325

Thousands Thousands Thousands Weighted average number of ordinary shares for basic earnings per share 23,917 23,917 23,917 Effect of dilution: No dilutive effects — — — Weighted average number of ordinary shares adjusted for the effect of dilution 23,917 23,917 23,917

The weighted average number of ordinary shares identified above used for the calculation of earnings per share is under the assumption that the Group has always existed in its current form.

The calculation includes the number of shares held as ordinary share capital of the Group as stated in note 19. Note that these are classified as debt within the balance sheet.

14. Goodwill and other intangible assets Goodwill Software Brand Total £’000 £’000 £’000 £’000 Cost: At 31 March 2013 807,496 1,110 93,700 902,306 Additions — 474 — 474 At 29 March 2014 807,496 1,584 93,700 902,780

Accumulated amortisation: At 31 March 2013 — 790 — 790 Amortisation for the year — 188 — 188 At 29 March 2014 — 977 — 977 Carrying value at 29 March 2014 807,496 607 93,700 901,803

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Notes to the combined financial information Goodwill Software Brand Total £’000 £’000 £’000 £’000 Cost: At 1 April 2012 57,415 1,036 — 58,451 Additions 807,496 74 93,700 901,270 Other movements (57,415) — — (57,415) At 30 March 2013 807,496 1,110 93,700 902,306

Accumulated amortisation: At 1 April 2012 — 624 — 624 Amortisation for the year — 166 — 166 At 30 March 2013 — 790 — 790 Carrying value at 30 March 2013 807,496 320 93,700 901,516

The Goodwill and Brand movement above reflects the restructuring of the Group in the combined financial information for year ended 30 March 2013.

Goodwill Software Total £’000 £’000 £’000 Cost: At 27 March 2011 57,415 721 58,136 Additions — 315 315 At 31 March 2012 57,415 1,036 58,451

Accumulated amortisation: At 27 March 2011 — 489 489 Amortisation for the year — 135 135 At 31 March 2012 — 624 624 Carrying value at 31 March 2012 57,415 412 57,827

Impairment testing of goodwill The goodwill balance recorded in the Group’s financial information arises as a result of business combinations.

Goodwill—Meltore Limited and Opus Homewares Limited The goodwill recorded as at 27 March 2011 and 31 March 2012 relates to the prior period acquisitions of Meltore Limited (Meltore) and Opus Homewares Limited (Opus).

The goodwill has been allocated as follows between the two groups of cash generating units (CGU’s), which relate directly to the specific stores acquired in those business combinations. These groups of CGU’s are at a lower level than the operating and reportable segment for impairment testing.

31 March 27 March 2012 2011 £’000 £’000 Meltore 19,012 19,012 Opus 38,403 38,403 Total 57,415 57,415

The Group has performed an impairment test as at 31 March 2012 and 27 March 2011 (as the deemed IFRS opening balance sheet date for the Group for the purposes of preparing this historical financial information). The impairment test involves assessing the net present value (NPV) of the expected cashflows in relation to the stores within each CGU according to a number of assumptions (more detail on which follows below) to calculate the value in use (VIU) for each CGU.

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Notes to the combined financial information The results of the impairment tests identified that the VIU is significantly in excess of the carrying value of the assets associated with each CGU at each date. No other indicators of impairment were noted, with the Group continuing to expand rapidly and like for like sales increasing within the specified former Opus and Meltore stores at each testing date.

The key assumptions for the value in use calculations are:

(a) Discount rates. The pre-tax discount rates used in the value in use calculations are set out in the table below. These discount rates are derived from the Group’s weighted average cost of capital. Changes in the discount rates over the years are calculated with reference to latest market assumptions for the risk free rate, equity market risk premium and the cost of debt.

(b) Sales growth rates. Future sales have been extrapolated using like for like growth rates as set out in the table below. These growth rates are considered to be prudent when compared with the current like for like growth experienced by the Group.

(c) Costs have been assumed to rise in line with the current inflation rate.

(d) The management forecasts used cover the next five years with a perpetuity for the following years based upon the year 5 figures with nil growth.

A summary of the assumptions used is shown in the following table:

31 March 27 March 2012 2011 Discount Rate 7.2% 8.1% Like for like sales growth 3.0% 3.0% Cost inflation 3.6% 5.3%

As a guide to the sensitivities around the key assumptions set out above, for the VIU to fall beneath the carrying value of the relevant stores (and with all other parameters being equal), in 2012; (i) The discount rate would have to have been 47.2% for Meltore or 28.0% for Opus or, (ii) the like for like growth would have to have been (8.1%) for Meltore or (4.4%) for Opus, (iii) cost inflation would have to have been 18.3% for Meltore or 13.4% for Opus.

In 2011; (i) The discount rate would have to have been 41.1% for Meltore or 18.8% for Opus or, (ii) the like for like growth would have to have been (6.3%) for Meltore or (0.7%) for Opus, (iii) cost inflation would have to have been 16.6% for Meltore or 9.6% for Opus.

Management therefore considers that no reasonably possible change in any of the key assumptions would cause the recoverable amount of goodwill attached to the above CGUs to fall below their carrying value in either year reported.

The goodwill relating to Meltore and Opus forms part of the retail CGU acquired as part of B&M European Value Retail 2 Sarl on 6 March 2013. The new goodwill balance created as part of this deal has been tested below.

(b) Goodwill—B&M European Value Retail 2 S.à.r.l. The goodwill balance recorded in the Group’s financial information for the years ended 29 March 2014 and 30 March 2013 arose as a result of the business combination undertaken as at 6 March 2013, the acquisition of B&M European Value Retail 2 S.à.r.l. (SBR Europe) ultimately by B&M European Value Retail 1 S.à.r.l. (Lux Holdco).

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Notes to the combined financial information The goodwill has been allocated to one group of cash generating units (CGU’s), being those CGU’s comprising the retail segment.

29 March 2014 30 March 2013 £’000 £’000 Allocated to retail store estate 807,496 807,496 Total 807,496 807,496

The Group has performed impairment tests as at the 2013 and 2014 year end dates. The impairment test involves assessing the net present value (NPV) of the expected cashflows in relation to the stores within each CGU according to a number of assumptions (more detail on which follows below) to calculate the value in use (VIU) for the group of CGU’s.

The results of the impairment tests identified that the VIU is significantly in excess of the carrying value of assets within the CGU at each date. No other indicators of impairment were noted, with the Group continuing to expand rapidly and like for like sales increasing.

The key assumptions for the value in use calculations are: (a) Discount rates. The pre-tax discount rates used in the value in use calculations are set out in the table below. These discount rates are derived from the Group’s weighted average cost of capital. Changes in the discount rates over the years are calculated with reference to latest market assumptions for the risk free rate, equity market risk premium and the cost of debt. (b) A prudent like for like rate as forecast by management and detailed below. (c) Costs have been assumed to rise in line with the current inflation rate, the company like for like (LFL) growth rate and actual specific rent forecasts as appropriate to each broad cost category. (d) The working capital requirement has been assumed to change in line with projected gross profit. (e) The calculation runs to the next 10 years with a perpetuity then applied based upon the year 10 figures.

A summary of some of the key values behind the assumptions used is shown in the following table :

29 March 2014 30 March 2013 Discount Rate 9.5% 9.3% Like for like sales growth 3.0% 3.0% Cost inflation 2.5% 3.3%

As a guide to the sensitivities around the key assumptions set out above, for the VIU to fall beneath the carrying value of Assets associated with this CGU (and with all other parameters being equal) (i) The discount rate used would have to be 20.8% for 2014, 18.8% for 2013, or, (ii) the like for like growth would have to be (0.9%) for 2014, (0.2%) for 2013, or, (iii) cost inflation would have to be 7.7% for 2014, 7.6% for 2013.

Management therefore considers that no reasonably possible change in any of the key assumptions would cause the recoverable amount of goodwill attached to the above CGUs to fall below their carrying value in any year reported.

Impairment and useful life of the Brand intangible The brand asset relates to the B&M Brand acquired as part of the transaction on 6 March 2013.

At that date the asset was recognised at a fair value based upon the future cashflows from the asset calculated via the relief from royalty (“RfR”) approach.

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Notes to the combined financial information The brand was not considered to have a measurable period over which the benefits are expected to accrue, and therefore it was assessed to have an indefinite life.

Under IFRS the Group is therefore required to re-assess the indefinite life, and the fair value, at each year end date.

It is the belief of management that at both 30 March 2013 and 29 March 2014, the brand continues to have no specific end date over which the benefits are expected to accrue. As such the asset continues to be recognised with indefinite life.

As at 29 March 2014 and 30 March 2013 the value of the asset was recorded at £93.7m, this is equal to the original value with no historical impairments recognised.

The value in use (VIU) calculation returned a result in excess of the carrying value of the brand asset for both years under review. No other indicators of impairment were noted with the Group continuing to exhibit a rapid pace of growth.

The value in use was performed using the relief from royalties method. In order to use this revenue has been forecast using a growth rate projected on the LFL growth rates given below, as well as a prudent estimate for the number of new store openings.

The assumed royalty rate is the rate used to calculate the initial valuation. Management believes this remains a reasonable estimate, and a sensitivity has been performed below to demonstrate the level of comfort.

Some values of the key assumptions are as follows:

29 March 2014 30 March 2013 Discount Rate 9.5% 9.3% Like for like sales growth 3.0% 3.0% Royalty Rate 0.75% 0.75%

As a guide to the sensitivities around the key assumptions set out above, for the VIU to fall beneath the carrying value of the brand intangible (and with all other parameters being equal) : (i) The discount rate used would have to be 10.7% for 2014, 11.4% for 2013, or, (ii) the royalty rate would have to drop to 0.60% for 2014, 0.65% for 2013, or, (iii) like for like growth would have to be 1.1% for 2014, 0.2% for 2013.

Management therefore considers that there is no requirement for impairment in either year presented.

15. Property, plant and equipment

Plant, Land fixtures and Motor and buildings vehicles equipment Total £’000 £’000 £’000 £’000 Cost: At 31 March 2013 11,857 4,452 60,670 76,979 Additions 4,132 842 27,907 32,881 Disposals (94) (540) (637) (1,271) At 29 March 2014 15,895 4,754 87,940 108,590 Accumulated depreciation: At 31 March 2013 6,510 2,484 25,946 34,940 Depreciation for the year 1,971 768 6,822 9,561 Disposals (68) (379) (460) (907) At 29 March 2014 8,413 2,873 32,308 43,594 Carrying value at 29 March 2014 7,482 1,881 55,632 64,995

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Notes to the combined financial information Plant, Land fixtures and Motor and buildings vehicles equipment Total £’000 £’000 £’000 £’000 Cost: At 1 April 2012 8,361 4,299 43,360 56,020 Additions 3,496 904 17,392 21,792 Disposals — (751) (82) (833) At 30 March 2013 11,857 4,452 60,670 76,979 Accumulated depreciation: At 1 April 2012 4,729 2,312 21,059 28,100 Depreciation for the year 1,781 784 4,918 7,484 Disposals — (612) (31) (644) At 30 March 2013 6,510 2,484 25,946 34,940 Carrying value at 30 March 2013 5,347 1,969 34,724 42,040

Plant, Land fixtures and Motor and buildings vehicles equipment Total £’000 £’000 £’000 £’000 Cost: At 27 March 2011 7,367 3,769 36,552 47,688 Additions 1,081 1,063 7,297 9,441 Disposals (87) (533) (489) (1,109) At 31 March 2012 8,361 4,299 43,360 56,020 Accumulated depreciation: At 27 March 2011 3,340 1,908 16,568 21,816 Depreciation for the year 1,460 849 4,844 7,153 Disposals (71) (445) (353) (869) At 31 March 2012 4,729 2,312 21,059 28,100 Carrying value at 31 March 2012 3,632 1,987 22,301 27,920

Finance leases The carrying value of plant and equipment held under finance leases and hire purchase contracts at 29 March 2014, 30 March 2013 and 31 March 2012 was £164k, £351k and £561k respectively. Additions during these three periods included £nil, £nil and £66k of plant and equipment under finance leases and hire purchase contracts respectively.

Leased assets and assets under hire purchase contracts are pledged as security for the related finance lease and hire purchase liabilities.

Under terms of the loan facility in place at 29 March 2014, a fixed charge existed over all property plant and equipment except for £1.1m NBV within the Land and Buildings category and £12.0m NBV within the plant, fixtures and equipment category, over which a floating charge was held.

At 30 March 2013 and 31 March 2012 a fixed charge existed over all property, plant and equipment.

At 29 March 2014, 30 March 2013 and 31 March 2012, included within the gross carrying amounts above are items with a cost of £19.4m, £15.1m and £11.2m, respectively, which are fully depreciated but are still is use by the business.

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Notes to the combined financial information 16. Inventories

29 March 30 March 31 March 2014 2013 2012 At £’000 £’000 £’000 Goods for resale 170,371 132,139 109,245

In the year to 29 March 2014 £848.6m was recognised as an expense for inventories carried at net realisable value. In the year to 30 March 2013 the value was £662.3m and in the year to 31 March 2012 it was £513.1m. All were recognised in cost of sales.

Included in these amounts for the years to 29 March 2014, 30 March 2013 and 31 March 2012 was £(3.9)m, £1.4m and £2.3m, respectively, of net inventory write down.

17. Trade and other receivables

29 March 30 March 31 March 2014 2013 2012 At £’000 £’000 £’000 Current assets: Trade receivables to non-related parties 10,201 11,767 15,097 Provision for impairment (2) — — Net trade receivables to non-related parties 10,199 11,767 15,097 Prepayments 12,110 7,779 8,645 Related party receivables 23,352 10,537 4,825 Other receivables 290 67 103 Total trade and other receivables 45,951 30,150 28,670

Trade receivables are stated initially at their fair value and then at amortised cost as reduced by appropriate allowances for estimated irrecoverable amounts. The fair value of these short term financial assets is not individually determined so the carrying amount is determined by the directors to be a reasonable approximation of fair value.

The following table sets out an analysis of provisions for impairment of trade and other receivables.

29 March 30 March 31 March 2014 2013 2012 At £’000 £’000 £’000 Balance at the beginning of the year — — — Impairment in the year (2) — — Utilised / released in the year — — — Balance at the end of the year (2) — —

For terms and conditions relating to related party receivables, refer to note 24.

Trade receivables are non-interest bearing and are generally on terms of 30 days or less.

At each year end a significant balance is held with Multi-Lines. Multi-Lines are a supplier with whom the Group carries a large deposit, they are also an associate of the Group and due to this and the long trading history between the companies, including no history of issues regarding recovery of the deposit balance, the Directors do not believe this balance is at risk.

At 29 March 2014 a significant balance was held with Barclays Mercantile Business Finance Limited in respect of a sale and leaseback transaction. However this was settled immediately following the year end.

There are no significant balances within the remaining debtors and as such there is no specific concentration of credit risk.

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Notes to the combined financial information The following table sets out a maturity analysis of total trade and other receivables, including those which are past due but not impaired.

29 March 30 March 31 March 2014 2013 2012 At £’000 £’000 £’000 Neither past due nor impaired 45,620 29,227 28,390 Past due less than one month 203 510 261 Past due between one and three months 128 413 19 Total trade and other receivables 45,951 30,150 28,670

18. Cash and cash equivalents

29 March 30 March 31 March 2014 2013 2012 At £’000 £’000 £’000 Cash at bank and on hand 24,902 26,402 12,473 24,902 26,402 12,473

As at 29 March 2014, 30 March 2013 and 31 March 2012 the Group had available £110.5m, £97.9m and £nil of undrawn committed borrowing facilities.

19. Issued Capital and reserves

31 March 30 March 29 March 2014 2013 2012 £’000 £’000 £’000 Allotted, called up and fully paid Firesource Limited 310,000 preferred ordinary shares of £1 each 310 170,000 ordinary shares of £1 each 170 74,463,031 “A” ordinary shares of £0.01 each 745 Total share capital 1,225 Allotted, called up and fully paid B&M European Value Retail 1 S.à.r.l. 2,166,690 “A” ordinary shares of £0.01 each 22 22 8,699,985 “B” ordinary shares of £0.01 each 87 87 13,050,000 “C” ordinary shares of £0.01 each 131 131 Ordinary share capital 239 239 174,999,998 12% Preference shares of £0.01 each 1,750 1,750 Total share capital (All classed as debt, see below and note 21) 1,989 1,989

Firesource Limited Preferred ordinary shares The preferred ordinary shares are equity shares which rank pari passu with all other shares in respect of dividends save that no dividends shall be paid until all the preference shares have been redeemed. Holders of preferred ordinary shares have one vote for every share held. On a winding up preferred ordinary shareholders, subject to the rights of the preference shareholders, rank pari passu with the holders of ordinary shares.

Ordinary and “A” ordinary shares The ordinary and “A” ordinary shares rank pari passu in all respects as a single class.

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Notes to the combined financial information Share capital reduction During the year ended 30 March 2013 Firesource Limited approved via special resolution and issue of a solvency statement to reduce its share capital by £475,000. The 170,000 £1 Ordinary shares were converted into £0.01 Ordinary shares and the 310,000 £1 Preferred Ordinary shares were converted into £0.01 Preferred Ordinary shares. The share rights attached to the shares remain unchanged. The Authorised share capital was reduced at the same time.

B&M European Value Retail 1 S.à.r.l. Preference Shares Preference shares rank ahead of ordinary shares in terms of distributions. Each preference share carries one vote. The preference shares have been classified as debt on the balance sheet, along with the interest which compounded on 6 March 2014, see note 21.

A, B and C Ordinary Shares Each class of share ranks pari passu with each other class and each share carries one vote. Each class of share is separated into 5 equal subclasses (A1-A5, B1-B5, C1-C5). Each ordinary share is entitled to a fixed dividend, as follows; (% of share value and any compounded dividend)

Class % Class % A1,B1,C1 0.05% A4,B4,C4 0.20% A2,B2,C2 0.10% A5,B5,C5 0.25% A3,B3,C3 0.15%

Each Ordinary share has been classified as debt within the balance sheet, along with the interest which compounded on 6 March 2014, See note 21.

Preferred Equity Certificates In 2013 and 2014, the company had issued preferred equity certificates with a nominal value of £556,050k made up of 55,604,952,750 12% certificates of £0.01 each. These certificates are mandatorily redeemed in March 2062, or on event of a listing (amongst other events). The preferred equity certificates rank pari passu with each other, and ahead of all ordinary and preference shares in terms of distribution. They do not carry voting rights. The preferred equity certificates have been classified as debt on the balance sheet, along with the interest compounded on 6 March 2014, see note 21.

20. Trade and other payables

29 March 30 March 31 March 2014 2013 2012 At £’000 £’000 £’000 Current liabilities: Trade payables 59,228 44,610 33,950 Social security and other taxes 19,097 11,881 11,191 Accruals and deferred income 26,076 31,986 15,467 Accrued interest on preferred equity certificates 4,914 4,570 — Related party trade payables 858 33 416 Amounts due under finance leases 22 229 336 Other payables 38 16 5,018 110,233 93,325 66,378 Non-current liabilities: Accruals and deferred income 34,856 22,535 12,490 Amounts due under finance leases — 21 250 34,856 22,556 12,740 Total trade and other payables 145,089 115,881 79,118

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Notes to the combined financial information Trade payables are generally on 30 day terms and are not interest bearing. The directors consider that the carrying value of trade payables approximates to their fair value. For further details on the related party trade payables, see note 24.

21. Interest bearing loans and borrowings

29 March 30 March 31 March 2014 2013 2012 At £’000 £’000 £’000 Current liabilities: Term facility bank loans 7,750 2,375 8,400 Preferred equity certificates 622,775 — — Preference shares 1,960 — — Ordinary share capital 240 — — Share premium on “A” ordinary shares 16 — — Revolving facility bank loans — 16,599 — 632,741 18,974 8,400 Non-current liabilities: Term facility bank loans 423,930 425,467 30,941 Preferred equity certificates — 556,050 — Preference shares — 1,750 — Ordinary share capital — 239 — Share premium on “A” ordinary shares — 16 — 423,930 983,522 30,941 Total interest bearing loans and borrowings 1,056,671 1,002,496 39,341

The term facility bank loans are held at amortised cost and were initially capitalised on 6 March 2013 with £33.1m of fees attributed to them. The fees related to the revolving facility were expensed immediately and are included in the 2013 statement of comprehensive income.

The preferred equity certificates, preference shares and ordinary share value are carried at their nominal value (which represented their fair value on initial recognition of these instruments) plus interest which was compounded on 6 March 2014. Their classification as current in 2014 is based upon their expected redemption date rather than their maturity date, which is 2062 for the preferred equity certificates and not applicable for the preference and ordinary shares.

For details on the terms and conditions of these interest bearing loans and borrowings, see notes 19, 24 and 25.

22. Provisions

Onerous Dilapidations Lease LTIP Other Total £’000 £’000 £’000 £’000 £’000 At 27 March 2011 — — — 849 849 Provided during the year 3,140 — — 1,259 4,399 Utilised / Released (400) — — (933) (1,333) At 31 March 2012 2,740 — — 1,175 3,915 Current liabilities 1,080 — — 1,175 2,255 Non-current liabilities 1,660 — — — 1,660 At 1 April 2012 2,740 — — 1,175 3,915 Provided during the year 1,600 756 3,556 1,712 7,624 Utilised / Released (1,300) (98) — (1,380) (2,778) At 30 March 2013 3,040 658 3,556 1,507 8,761 Current liabilities 1,040 398 3,556 1,507 6,501 Non-current liabilities 2,000 260 — — 2,260

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Notes to the combined financial information Onerous Dilapidations Lease LTIP Other Total £’000 £’000 £’000 £’000 £’000 At 31 March 2013 3,040 658 3,556 1,507 8,761 Provided during the year 1,125 676 — 4,585 6,386 Utilised / Released (520) (353) (3,556) (1,595) (6,024) At 29 March 2014 3,645 981 — 4,497 9,123 Current liabilities 2,085 392 — 4,497 6,974 Non-current liabilities 1,560 589 — — 2,149

The dilapidation provision relates to the expected future costs of dilapidations on specific leasehold properties. The timing in relation to the utilisation of these provisions is dependent upon the lease terms.

The onerous lease provision relates to the expected future costs of rent on the leasehold properties. The timing in relation to the utilisation of these provisions is dependent upon the lease terms.

The LTIP provision relates to the management LTIP which matured at December 2013.

The other provisions principally relate to disputes concerning property issues and customer claims. The directors believe it would be seriously prejudicial to disclose any further information in relation to these provisions as the disputes are ongoing.

23. Reconciliation of profit before tax to cash generated from operations

29 March 30 March 31 March 2014 2013 2012 Year ended £’000 £’000 £’000 Profit before tax 3,626 62,290 53,753 Adjustments for: Interest expense 99,340 18,107 1,776 Depreciation of property, plant and equipment 9,561 7,484 7,154 Amortisation of other intangible assets 188 166 135 Loss / (profit) on sale of property, plant and equipment 72 (250) 75 Movement in receivables (15,800) (1,482) (11,324) Movement in payables 28,746 37,331 15,983 Movement in inventory (38,232) (22,894) (20,153) Movement in provisions 362 4,846 3,066 Profit on investment in associates (237) (295) — Loss / (profit) on fair value movements 1,872 (1,485) 1,060 Other adjustments 5 37 — Cash generated from operations 89,503 103,855 51,525

24. Related parties The Group has transacted with the following related parties over the years presented.

Multi-Lines, a supplier, and Home Focus Group, a customer, have been associates of the Group since December 2012. Prior to this Multi-Lines was part owned by the directors of Firesource Ltd.

Ropley Properties Ltd, Triple Jersey Ltd, Rani Investments, Multi-Lines International (Properties) Ltd and Speke Point Ltd, all landlords of properties occupied by the group, are directly or indirectly owned by Simon and Bobby Arora or their family trusts.

Clayton, Dubilier & Rice, the part-owners of the business, provide management and financial consulting services to the Group.

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Notes to the combined financial information The following table sets out the total amount of trading transactions with related parties included in the combined income statement.

29 March 30 March 31 March 2014 2013 2012 Year ended £’000 £’000 £’000 Sales to related parties Home Focus Group Limited 238 167 — Purchases from related parties Clayton, Dubilier & Rice LLC 4,194 5,801 — Multi-Lines International (Properties) Ltd 81 — — Multi-Lines International Company Ltd 50,558 30,017 29,255 Rani Investments 194 173 175 Ropley Properties Ltd 2,610 2,441 2,137 Speke Point Ltd 1,116 — — Triple Jersey Ltd 1,527 941 575

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions.

The following table sets out the total amount of trading balances with related parties. Note that the debtors balance held by Multi-Lines International is a deposit on account and nets against a GRNI balance of £28.3m at 29 March 2014, £9.5m at 30 March 2013 and £4.7m at 31 March 2012.

29 March 30 March 31 March 2014 2013 2012 At £’000 £’000 £’000 Trade receivables from related parties Home Focus Group Ltd 29 29 — Multi-Lines International Company Ltd 23,323 10,429 4,825 Ropley Properties Ltd — 79 — Trade payables to related parties Rani Investments (57) (33) (33) Ropley Properties Ltd (530) — (383) Triple Jersey Ltd (271) — —

Outstanding trade balances at the balance sheet date are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party trade receivables or payables.

The Business has not recorded any impairment of trade receivables relating to amounts owed by related parties at 29 March 2014, 30 March 2013 and 31 March 2012. This assessment is undertaken each year through examining the financial position of the related party and the market in which the related party operates.

The following table sets out information relating to financing activities with related parties. All of the following balances include the interest which was compounded on 6 March 2014, with the accrued but not compounded interest identified separately.

29 March 30 March 31 March 2014 2013 2012 Year ended £’000 £’000 £’000 Preferred equity certificates held by Clayton, Dubilier & Rice 373,666 333,630 — Preferred equity certificates held by management 249,110 222,420 — Ordinary share capital held by Clayton, Dubilier & Rice 131 131 — Ordinary share capital held by management (includes premium) 125 124 — Preference shares held by Clayton, Dubilier & Rice 1,176 1,050 — Preference shares held by management 784 700 — Accrued interest due to items held by Clayton, Dubilier & Rice 2,957 2,742 — Accrued interest due to items held by management 1,972 1,828 —

135 B&M European Value Retail 1 S.à r.l.

Notes to the combined financial information The business owners hold between them the above items which have been classed as debt within the Group’s balance sheet and which are held within the heading of non-current loans and borrowings (per note 21).

The terms and condition on these items are expanded upon within note 25.

Transactions with key management personnel The following table includes amounts paid to the directors of the Group during the years under review. The Consulting fees are in relation to the management portion of the Preferred Equity Certificates.

29 March 30 March 31 March 2014 2013 2012 Year ended £’000 £’000 £’000 Short term employee benefits 165 21 19 Consulting fees 702 — —

The highest paid director in the year to 29 March 2014 received a total of £165k in short term employee benefits and £702k in respect of consultancy fees.

The following table includes amounts paid to the key management personnel of the Group during the years under review. The LTIP was first provided for in the year to 30 March 2013, but did not become payable until December 2013.

29 March 30 March 31 March 2014 2013 2012 Year ended £’000 £’000 £’000 Short term employee benefits 679 461 387 Long-term incentive plan 2,120 — — Consulting fees 1,852 — — Pension contributions 136 10 11 The amounts disclosed in the tables above are the amounts recognised as an expense during the reporting period related to directors and key management personnel, except for the long-term incentive plan which is presented in the period in which it became payable.

25. Financial instruments 25.1 Other Financial Assets

29 March 30 March 31 March 2014 2013 2012 At £’000 £’000 £’000 Financial Assets at fair value through profit or loss: Foreign exchange forward contracts — 425 — Interest rate swaps 1,819 — — Total financial assets at fair value through profit or loss 1,819 425 — Total Current — 425 — Total Non-current 1,819 — —

Financial assets through profit or loss reflect the positive change in the fair value of those foreign exchange forward contracts and interest rate swaps that are not designated as hedge relationships but are nevertheless intended to reduce the level of risk for expected sales and purchases.

136 B&M European Value Retail 1 S.à r.l.

Notes to the combined financial information 25.2 Other Financial Liabilities

29 March 30 March 31 March 2014 2013 2012 At £000 £000 £000 Financial Liabilities at fair value through profit and loss: Foreign exchange forward contracts 1,428 — 1,060 Fuel swap contracts 19 — — Interest rate swaps — — 192 Total financial liabilities at fair value through profit or loss 1,447 — 1,252 Total Current 1,447 — 572 Total Non-current — — 680

Financial liabilities through profit or loss reflect the negative change in the fair value of those foreign exchange forward contracts and interest rate swaps that are not designated as hedge relationships but are nevertheless intended to reduce the level of risk for expected sales and purchases.

25.3 Interest bearing loans and borrowings:

29 March 30 March 31 March Interest Rate 2014 2013 2012 % Maturity £’000 £’000 £’000 Current interest bearing loans and borrowings Firesource term loan 1.75% + LIBOR 2012/13 — — 8,400 UK Holdco term loan A 5% / 4.75% + LIBOR 2013-15 7,750 2,375 — UK Holdco revolving facility 5% / 4.75% + LIBOR 2013/14 — 16,599 — Preferred equity certificates 12% Jul-14 622,775 — — Preference shares 12% Jul-14 1,960 — — Ordinary share capital (includes premium) 0.05-0.25% Jul-14 256 — — Finance leases 3.6%-19.9% 2012-14 22 228 336 Total 632,763 19,202 8,736 Non-current interest bearing loans and borrowings Firesource term loan 1.75% + LIBOR 2013 — — 30,941 UK Holdco term loan A 5% / 4.75% + LIBOR 2014-19 114,875 122,625 — UK Holdco term loan B 5.5% / 5.25% + LIBOR Mar-20 335,000 335,000 — Preferred equity certificates 12% Jul-14 — 556,050 — Preference shares 12% Jul-14 — 1,750 — Ordinary share capital (includes premium) 0.05-0.25% Jul-14 — 255 — Finance Leases 4.7% -12.4% 2012-14 — 22 250 Total 449,875 1,015,703 31,191

Note that the Firesource Term Loan originally had a final maturity date of August 2013 but was actually repaid early on 6 March 2013.

The margin on the facility loans fell from 5% (Facility A and the Revolving Credit Facility) and 5.5% (Facility B) to 4.75% and 5.25% respectively, on 6 March 2014.

The preferred equity certificates, preference shares and ordinary share capital all have an end date specified as the expected date of redemption. Underlying this is a contractual maturity date of March 2062 on the preferred equity certificates whilst the preference shares and ordinary shares are perpetual.

137 B&M European Value Retail 1 S.à r.l.

Notes to the combined financial information In the case of the preferred equity certificates, ordinary and preference shares management has the option to compound interest at each payment date (6 March) such that the accrued interest has the effect of becoming part of the capital, and as such attracts interest at the same rates given above. This option was taken on 6 March 2014. In the case of the ordinary share capital, management has the right to declare an optional dividend on top of the fixed dividend represented by the interest rates above. However no such optional dividend has been announced or paid in the years presented herein. Term loans A and B have carrying values which include transaction fees allocated on inception. Their individual carrying values and effective interest rate in the accounts are: Effective Interest Rate Carrying Value 29 March 30 March 29 March 30 March 2014 2013 2014 2013 % % £’000 £’000 UK Holdco Term Loan A 7.6 7.7 115,679 115,930 UK Holdco Term Loan B 7.1 7.3 316,000 312,945 Total 431,679 428,875 The effective interest rate was recalculated at the March 2014 year end due to the change in the interest rate margin which thus affected the projected costs. The projected interest costs for 2013/14 were also replaced by actual interest costs at this time.

25.4 Fair Value Disclosures Fair Value Hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: • Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities • Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly • Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data As at the reporting dates, the Group held the following financial instruments carried at fair value on the balance sheet : 29 March 2014 Level 1 Level 2 Level 3 £’000 £’000 £’000 £’000 Foreign exchange contracts (1,428) — (1,428) — Interest rate swaps 1,819 — 1,819 — Fuel swap contract (19) — (19) — 30 March 2013 Level 1 Level 2 Level 3 £’000 £’000 £’000 £’000 Foreign exchange contracts 425 — 425 — 31 March 2012 Level 1 Level 2 Level 3 £’000 £’000 £’000 £’000 Foreign exchange contracts (1,060) — (1,060) — Interest rate swaps (192) — (192) — These instruments have been valued by the issuing bank, using a mark to market method. The bank has used various inputs to compute the valuations and these include inter alia the relevant maturity date and strike rates, the current exchange rate, fuel prices and LIBOR levels. The Group’s financial instruments are either carried at fair value or have a carrying value which is considered a reasonable approximation of fair value.

138 B&M European Value Retail 1 S.à r.l.

Notes to the combined financial information 25.5 Contracted Maturities The following table sets out the undiscounted contractual maturities for financial liabilities and derivatives.

Between Between More Within 1 1 and 2 2 and 5 than 5 year years years years Total £’000 £’000 £’000 £’000 £’000 As at 29 March 2014: Interest bearing loans 32,480 40,100 151,675 372,413 596,668 Preferred equity certificates 652,873 — — — 652,873 Preference shares 2,055 — — — 2,055 Ordinary share capital 256 ———256 Fuel swap contract 19 — — — 19 Forward foreign exchange contracts 1,407 — — — 1,407 Trade payables 60,086 — — — 60,086 Accruals and deferred income 4,923 5,773 18,877 10,206 39,779 Finance lease commitments 22 — — — 22 As at 30 March 2013: Interest bearing loans 42,874 34,290 143,494 424,897 645,555 Preferred equity certificates — 652,873 — — 652,873 Preference shares — 2,055 — — 2,055 Ordinary share capital — 256 — — 256 Trade payables 44,643 — — — 44,643 Accruals and deferred income 2,507 3,421 11,238 7,876 25,042 Finance lease commitments 234 21 — — 255 As at 31 March 2012: Interest bearing loans 9,435 33,758 — — 43,193 Forward foreign exchange contracts 153 111 — — 264 Interest rate swaps 125 62 — — 187 Trade payables 34,366 — — — 34,366 Accruals and deferred income 1,414 2,039 6,534 3,917 13,904 Finance lease commitments 352 234 21 — 607

The Interest rate swap noted in 2012 had a final maturity date of August 2013, but was settled early in March 2013.

See note 25.3, above, for the details behind the maturity of the preferred equity certificates, preference and ordinary shares.

26. Commitments (i) Operating lease commitments—entity as a lessee The vast majority of the Group’s operating lease commitments relate to the property comprising our store network. At each year end over 90% of these leases expire by March 2028. The leases are separately negotiated and no subgroup is considered to be individually significant nor to contain individually significant terms. The Group was not subject to contingent rent agreements at any of the year end dates.

The following table sets out the total future minimum lease payments under non-cancellable operating leases.

29 March 30 March 31 March 2014 2013 2012 £’000 £’000 £’000 Not later than one year 61,852 44,861 34,116 Later than one year and not later than five years 253,403 191,572 135,514 Later than 5 years 337,242 273,860 193,448 652,497 510,293 363,078

139 B&M European Value Retail 1 S.à r.l.

Notes to the combined financial information The lease and sublease payments recognised as an expense in the periods were as follows;

29 March 30 March 31 March 2014 2013 2012 £’000 £’000 £’000 Lease payments 59,871 45,043 35,561 Sublease receipts (109) (141) (134) 59,762 44,902 35,427

(ii) Finance lease and hire purchase commitments Future minimum lease payments under finance leases and hire purchase contracts together with the present value of the net minimum lease payments are, as follows:

29 March 2014 30 March 2013 31 March 2012 Present Present Present value of value of value of Minimum minimum Minimum minimum Minimum minimum payments payments payments payments payments payments £’000 £’000 £’000 £’000 £’000 £’000 Not later than one year 22 22 234 229 352 336 Later than one year and not later than five years — — 22 21 255 250 Later than 5 years —————— Total minimum lease payments 22 22 255 250 607 586 Less amounts representing finance charges — — (5) — (21) — Present value of minimum lease payments 22 22 250 250 586 586

(iii) Capital commitments There were no contractual capital commitments not provided for in the financial information as at 31 March 2012, 30 March 2013 and 29 March 2014.

27. Contingent liabilities and guarantees

As at 30 March 2013 and 29 March 2014, UK Holdco 3, UK Holdco 4, SBR Europe, Firesource, B&M, Meltore and Opus are all guarantors to the loan agreement which is formally held within UK Holdco 3. The amount outstanding at the year ends was £476.6m and £457.6m respectively, with the balance in UK Holdco 4.

At 31 March 2012, Firesource, B&M, Meltore and Opus had a cross guarantee in relation to the loan agreement held formally within Firesource. The amount outstanding at 31 March 2012 was £39.3m and was held within Firesource.

28. Dividends paid and proposed No dividend has been announced or paid in the presented years.

29. Events after the reporting period On 18 March 2014 the Group exchanged contracts for the acquisition of 80% of B&M European Value Retail Germany GmbH with completion taking place on 30 April 2014. The Group will disclose the book value of the identifiable assets and liabilities and their fair value in the Group’s interim results to 30 September 2014 and in its 2015 financial statements as required under IFRS 3. The initial accounting and fair value exercise is incomplete at the point that the financial information was authorised for issue due to the proximity of the completion date.

The company, in its last audited financial statements to 31 December 2013 (converted to IFRS), achieved turnover of €163.3m, EBITDA of €13.4m and Adjusted EBITDA (calculated as EBITDA adjusted to exclude exceptional transaction bonuses for JA Woll management) of €15.1m.

140 B&M European Value Retail 1 S.à r.l.

Notes to the combined financial information 30. Financial risk management The Group uses various financial instruments, these include bank loans, finance company loans, cash, equity investment, derivatives and various items, such as trade receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Group’s operations.

The main risks arising from the Group’s financial instruments are market risk, currency risk, cash flow interest rate risk, credit risk and liquidity risk. The directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous years.

The existence of these financial instruments exposes the Group to a number of financial risks, which are described in more detail below. In order to manage the group’s exposure to those risks, in particular the group’s exposure to currency risk, the Group enters into forward foreign currency contracts. No transactions in derivatives are undertaken of a speculative nature.

Market Risk Market risk encompasses three types of risk, being currency risk, fair value interest rate risk and price risk. Price risk is not considered material to the business as the group is able to pass on pricing changes to its customers.

The Group’s policies for managing fair value interest rate risk are considered along with those for managing cash flow interest rate risk and are set out in the subsection entitled “interest rate risk” below.

Currency Risk The Group is exposed to translation and transaction foreign exchange risk arising from exchange rate fluctuation on its purchases from overseas suppliers.

In relation to translation risk, this is not considered material to the business as amounts owed in foreign currency are short term of up to 30 days and are of a relatively modest nature. Transaction exposures, including those associated with forecast transactions, are hedged when known, principally using forward currency contracts. Whilst the aim is to achieve an economic hedge, the company does not adopt an accounting policy of hedge accounting for this financial information.

All of the Group’s sales are to customers in the UK and there is no currency exposure in this respect, approximately 27% of the group’s purchases are priced in US Dollars and the group uses forward currency contracts to minimise the risk associated with that exposure.

Foreign Currency Sensitivity The following tables demonstrate the sensitivity to a reasonably possible change in US Dollar year end exchange rates with all other variables held constant.

The impact on the Group’s profit before tax is largely due to changes in the fair value of the FX options.

Change 29 March 30 March 31 March in USD 2014 2013 2012 rate £’000 £’000 £’000 Effect on profit before tax +2.5% (2,506) (188) (2,515) -2.5% 2,634 192 3,162 Effect on equity +2.5% (1,930) (145) (1,937) -2.5% 2,028 148 2,435

The Group also has balances denominated in Euros, however the sensitivity to these balances is highly immaterial in each of the years under consideration.

141 B&M European Value Retail 1 S.à r.l.

Notes to the combined financial information Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group is exposed to changes in interest rates and all of the company’s bank borrowings are subject to a floating rate based on LIBOR.

The Group’s exposure to interest rate fluctuations is not considered to be material, however the group uses interest rate swaps to minimise the impact.

The following table demonstrates the sensitivity to a reasonably possible change in the LIBOR rate during the years with all other variables held constant. The large effect in 2014 is due to the impact on the mark to market valuations of the companies swap deals.

Basis Point 29 March 30 March 31 March increase / 2014 2013 2012 decrease £’000 £’000 £’000 Effect on profit before tax +50 5,373 (124) (12) -50 (5,373) 118 12 Effect on equity +50 4,137 (95) (9) -50 (4,137) 90 9

Credit Risk Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group’s principal financial assets are cash and trade receivables. The credit risk associated with cash is limited as the counterparty is a UK clearing bank with a high credit rating. The principal credit risk arises therefore from the company’s trade receivables.

In order to manage credit risk, the directors set limits for customers based on a combination of payment history and third party credit references. Credit limits are reviewed by the credit controller on a regular basis in conjunction with debt ageing and collection history. Provisions against bad debts are made where appropriate.

Liquidity Risk Any impact on available cash and therefore the liquidity of the Group could have a material effect on the business as a result.

The Group’s borrowings are subject to quarterly banking covenants against which the company has had significant headroom to date with no anticipated issues based upon forecasts made. Short term flexibility is achieved via the Group’s Revolving Credit Facility.

142 B&M European Value Retail 1 S.à r.l.

Notes to the combined financial information Fair Value The fair value of the financial assets and liabilities of the group are not materially different from their carrying value. Refer to the table below. These all represent financial assets and liabilities measured at amortised cost except where stated as measured at fair value through the profit and loss.

2014 2013 2012 £’000 £’000 £’000 Financial Assets Fair value through profit and loss Forward foreign exchange contracts — 425 — Interest rate swap 1,819 — — Loans and receivables Cash and cash equivalents 24,902 26,402 12,473 Trade receivables 33,551 22,304 19,922 Other receivables 290 67 103 Financial Liabilities Fair value through profit and loss Forward foreign exchange contracts 1,428 — 1,060 Interest rate swap — — 192 Fuel price swap 19 — — Amortised cost Interest-bearing loans and borrowings 1,056,671 1,002,496 39,341 Finance lease commitments 22 250 586 Trade payables 60,086 44,643 34,366 Accruals and deferred income 39,779 25,042 13,095

31. Group information Information about subsidiaries The combined financial information of the Group includes the following entities which are all 100% held within the Group.

Date of Company Country incorporation Principal activities

B&M European Value Retail 1 S.à.r.l. (Lux Holdco) Luxembourg November 2012 Parent and holding company B&M European Value Retail Holdco 1 Ltd (UK Holdco 1) UK December 2012 Holding company B&M European Value Retail Holdco 2 Ltd (UK Holdco 2) UK December 2012 Holding company B&M European Value Retail Holdco 3 Ltd (UK Holdco 3) UK November 2012 Holding company B&M European Value Retail Holdco 4 Ltd (UK Holdco 4) UK November 2012 Holding company B&M European Value Retail 2 S.à.r.l. (SBR Europe) Luxembourg September 2012 Holding company Firesource Limited (Firesource) UK September 1996 Holding company B&M Retail Limited (B&M) UK March 1978 General retailer Opus Homewares Limited (Opus) UK April 2003 Houseware retailer Meltore Limited (Meltore) UK November 2006 Dormant

As discussed in the basis of preparation note, on 6 March 2013, B&M European Value Retail 1 S.à.r.l. (Lux Holdco) acquired control of B&M European Value Retail 2 S.à.r.l. (SBR Europe) and became the holding company for the Group. This business combination is discussed in further detail in note 8. As a result of the acquisition, the structure of the Group carrying out the Group’s business has not been the same throughout the entire period covered by the financial information. Prior to 6 March 2013, the Lux Holdco group has not constituted a separate legal group.

143 B&M European Value Retail 1 S.à r.l.

Notes to the combined financial information The holding company B&M European Value Retail 1 S.à.r.l. is the ultimate parent company.

Associates The Group has a 50% interest in Multilines International Company Limited, a company incorporated in Hong Kong and a 40% interest in Home Focus Group Limited, a company incorporated in the Republic of Ireland following their acquisition by SBR Europe on 26 October 2012 and 5 December 2012 respectively. The share of profit/loss from the associates is included in the statement of comprehensive income.

32. Opening balance sheet Consolidated financial statements for the Group have not been previously prepared and presented. As a result the requirement in IFRS 1 to present reconciliations from the previous GAAP for equity, profit and loss and cash flows is not applicable.

33. Exemptions applied IFRS 1 allows first-time adopters certain exemptions from the retrospective application of certain requirements under IFRS. The Group has applied the following exemptions in preparing the combined opening balance sheet under IFRS:

IFRS 3 Business Combinations has not been applied to acquisitions of subsidiaries, which are considered businesses for IFRS, or of interests in associates and joint ventures that occurred before 1 April 2011. Use of this exemption means that the local GAAP carrying amounts of assets and liabilities that are required to be recognised under IFRS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is in accordance with IFRS. Assets and liabilities that do not qualify for recognition under IFRS are excluded from the opening IFRS statement of financial position. The Group did not recognise or exclude any previously recognised amounts as a result of IFRS recognition requirements. IFRS 1 also requires that the local GAAP carrying amount of goodwill must be used in the opening IFRS statement of financial position (apart from adjustments for goodwill impairment and recognition or derecognition of intangible assets). In accordance with IFRS 1, the Group has tested goodwill for impairment at the date of transition to IFRS. No goodwill impairment was deemed necessary at 1 April 2011.

Estimates The estimates at 27 March 2011 and at 31 March 2012 are consistent with those made for the same dates in accordance with local GAAP (after adjustments to reflect any differences in accounting policies).

144 PART 8: UNAUDITED PRO FORMA FINANCIAL INFORMATION

PART A: REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION

Grant Thornton UK LLP 30 Finsbury Square London EC2P 2YU

T +44 (0)20 7383 5100 F +44 (0)20 7184 4301 www.grant-thornton.co.uk

B&M European Value Retail S.A. 16, Avenue Pasteur L-2310 Luxembourg

12 June 2014

Dear Sirs,

B&M European Value Retail S.A. (the “Company”) and its subsidiary undertakings (collectively, the “Group”)

We report on the pro forma financial information (the “Pro forma financial information”) set out in Part B of Part 8: Unaudited Pro Forma Financial Information of the prospectus of B&M European Value Retail S.A. dated 12 June 2014 (the “Prospectus”), which has been prepared on the basis described in notes 1 to 5, for illustrative purposes only, to provide information about how the (1) receipt by the Company of the net proceeds of the Global Offer from the issue of New Shares, (2) the Reorganisation and (3) the Refinancing might have affected the financial information presented on the basis of the accounting policies to be adopted by the Company in preparing the financial statements for the period ending 28 March 2015.

This report is required by item 20.2 of Annex I of the EU Prospectus Directive Regulation 809/2004 (the “PD Regulation”) and item 7 of Annex II of the PD Regulation and is given for the purpose of complying with those requirements and for no other purpose.

Responsibilities Save for any responsibility arising under item 20.2 of Annex I of the PD Regulation and item 7 of Annex II of the PD Regulation to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with, item 20.2 of Annex I of the PD Regulation and item 7 of Annex II of the PD Regulation consenting to its inclusion in the Prospectus.

It is the responsibility of the directors of the Company to prepare the Pro forma financial information in accordance with item 20.2 of Annex I of the PD Regulation and items 1 to 6 of Annex II of the PD Regulation.

It is our responsibility to form an opinion in accordance with item 20.2 of Annex I of the PD Regulation and as required by item 7 of Annex II of the PD Regulation, as to the proper compilation of the Pro forma financial information and to report that opinion to you.

In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro forma financial information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue.

145 Basis of opinion We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro forma financial information with the directors of the Company.

We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Pro forma financial information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of the Company.

Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in the United States of America or other jurisdictions and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion In our opinion: (a) the Pro forma financial information has been properly compiled on the basis stated; and (b) such basis is consistent with the accounting policies of the Company.

Declaration In accordance with article 9(1) of the Luxembourg Prospectus Law, we are responsible for this report as part of the Prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in compliance with item 1.2 of Annex I of the PD Regulation.

Yours faithfully,

GRANT THORNTON UK LLP

146 PART B: UNAUDITED PRO FORMA FINANCIAL INFORMATION

The unaudited pro forma statement of net assets set out below has been prepared to illustrate the effect on the net assets of the Group of (1) the receipt by the Company of the net proceeds of the Global Offer from the issuance of New Shares, (2) the Reorganisation and (3) the Refinancing, as if they had taken place on 29 March 2014. This unaudited pro forma statement of net assets has been prepared for illustrative purposes only and, because of its nature, addresses a hypothetical situation and, therefore, does not represent the Group's actual financial position or results. This unaudited pro forma statement of net assets is compiled on the basis set out below from the IFRS combined statement of financial position of B&M European Value Retail 1 as at 29 March 2014, as set out in Part B of Part 7: Historical Financial Information. It may not, therefore, give a true picture of the Group's financial position or results nor is it indicative of the results that may or may not be expected to be achieved in the future. The unaudited pro forma financial information has been prepared on the basis set out in the notes below and in accordance with Annex II of the PD Regulation.

Adjustments As at Global Unaudited 29 March Offer net pro forma 2014(1) proceeds(2) Reorganisation(3) Refinancing(4) total(5) £'000 Assets: Non-current assets: Goodwill ...... 807,496 — — — 807,496 Other intangible assets ...... 94,307 — — — 94,307 Investments in associates ...... 2,093 — — — 2,093 Property, plant and equipment ...... 64,996 — — — 64,996 Other non-current financial assets ...... 1,819 — — — 1,819 Deferred tax assets ...... 146 — — — 146 Total non-current assets ...... 970,857 — ——970,857 Current assets: Inventories ...... 170,371 — — — 170,371 Trade and other receivables ...... 45,951 — — — 45,951 Other current financial assets ...... — — — — — Income tax receivable ...... 359 — — 6,801 7,160 Cash and cash equivalents ...... 24,902 50,000 — (21,248) 53,654 Total current assets ...... 241,583 50,000 — (14,447) 277,135 Total assets ...... 1,212,440 50,000 — (14,447) 1,247,992 Equity: Share capital ...... — (56,600) (624,991) — (681,591) Foreign exchange reserve ...... (3) — — — (3) Capital redemption reserve ...... — — — — — Retained loss/(earnings) ...... 18,905 — — 22,767 41,673 Total equity ...... 18,902 (56,600) (624,991) 22,767 (639,921) Liabilities: Non-current liabilities: Interest-bearing loans and borrowings ...... (423,930) 6,600 — (16,070) (433,400) Other non-current financial liabilities ...... — — — — — Provisions ...... (2,149) — — — (2,149) Other liabilities ...... (34,856) — — — (34,856) Deferred tax liabilities ...... (19,012) — — — (19,012) Total non-current liabilities ...... (479,947) 6,600 — (16,070) (489,417) Current liabilities: Trade and other payables ...... (110,233) — — — (110,233) Interest-bearing loans and borrowings ...... (632,741) — 624,991 7,750 — Other current financial liabilities ...... (1,447) — — — (1,447) Income tax payable ...... — — — — — Provisions ...... (6,974) — — — (6,974) Total current liabilities ...... (751,395) — 624,991 7,750 (118,654) Total liabilities ...... (1,231,342) 6,600 624,991 (8,320) (608,071) Total Equity and Liabilities ...... (1,212,440) (50,000) — 14,447 (1,247,992)

147 (1) The financial information has been extracted, without material adjustment, from the combined statement of financial position of B&M European Value Retail 1 S.à rl. as at 29 March 2014, as set out in Part 7: Historical Financial Information. (2) The Global Offer will raise gross proceeds for the Company of £75 million through the issue of 27,777,778 New Shares at the Offer Price. Net proceeds of £50 million through the issue of New Shares reflect the deduction of estimated fees and expenses in connection with the Global Offer of £25 million, of which £6.6 million relates to arrangement fees for the New Facilities. (3) Adjustments have been made to reflect the exchange of and the re-designation of £622.8 million preferred equity certificates with a total nominal value of £556.1 million (the “Preferred Equity Certificates”) and £66.7 million accrued Preferred Equity Certificates dividends to 29 March 2014 as Existing Shares in the Company. Preference shares and ordinary shares of £2.2 million are also exchanged and re-designated as New Shares in the Company. (4) As set out in the paragraph headed “Reasons for the Global Offer and use of proceeds” in Part 9: The Global Offer, the Company intends to use a portion of the net proceeds receivable by the Company from the Global Offer, together with the proceeds of borrowings under the New Facilities of £440 million (less £6.6 million of arrangement fees) to repay the Senior Facilities of £461.2 million, including £3.6 million of accrued interest to 29 March 2014 in connection with the facility loans, which has been charged within “finance costs” in the income statement. The net cash impact of these pro forma adjustments is £21.2 million. Accrued interest on the Senior Facilities at the date of repayment will be £6.1 million, reflecting accrued interest at 29 March 2014, plus interest charged less interest paid in the period from 30 March 2014 to the date of repayment. The unamortised arrangement fees of £29.6 million on the repaid Senior Facilities are written off to the income statement with an associated corporation tax credit of £6.8 million based on a corporation tax rate of 23%.

Non Current current Total £’000 Senior Facilities debt as at 29 March 2014 ...... 7,750 423,930 431,680 Unamortised arrangement fees (see below) ...... — 29,568 29,568 Net cash outflow to repay the Senior Facilities ...... (7,750) (13,498) (21,248) — 440,000 440,000 Less: arrangement fees on the New Facilities ...... — (6,600) (6,600) Pro forma balance on interest-bearing loans and borrowings ...... — 433,400 433,400

Unamortised arrangement fees: £’000 Gross amount of unamortised fees to be written off ...... 29,568 Corporation tax credit ...... (6,801) Net amount written off ...... 22,767 (5) Other than the adjustments detailed above, no other adjustments have been made for events occurring after 29 March 2014.

148 PART 9: THE GLOBAL OFFER

Overview of the Global Offer The Global Offer comprises an offer of 27,777,778 New Shares and 372,222,222 Existing Shares, which, together with the New Shares being offered represents 40.0% of the enlarged issued share capital of the Company. The New Shares being issued by the Company will rank pari passu in all respects with the Existing Shares, including the right to vote and the right to receive all dividends and other distributions declared, made or paid in respect of the Company’s share capital after Admission and will be sold or issued at the Offer Price. The Shares and any dematerialised and electronically settled depository interests representing Shares (“Depository Interests”or“DIs”) will, immediately following Admission, be freely transferable.

The Company and certain Independent Non-Executive Directors have entered into subscription agreements pursuant to which such Independent Non-Executive Directors will subscribe for Allocated Shares at the Offer Price.

The Offer is underwritten by the Underwriters on the basis set out in the underwriting agreement between the Company the Directors, the Selling Shareholders, the Over-allotment Shareholders and the Underwriters dated 12 June 2014 (the “Underwriting Agreement”) further details of which are set out in paragraph 15 of Part 10: Additional Information.

Shareholdings immediately prior to Admission will be diluted by 2.8% as a result of the 27,777,778 New Shares issued as part of the Global Offer, which correspond to a nominal value of £2,777,778.

The Global Offer is being made by means of an offer of Shares to certain institutional and other investors (being those who would be exempt from the prospectus requirements as set out under article 5(2) of the Luxembourg Prospectus Law) outside the United States and by way of an offering of Shares in the United States to persons reasonably believed to be QIBs pursuant to Rule 144A or another exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. Certain restrictions that apply to the distribution of this document and the Shares being issued and sold under the Global Offer in jurisdictions outside the United Kingdom are described under the heading Selling and transfer restrictions below.

Admission is expected to become effective on 17 June 2014. Immediately following Admission, it is expected that approximately 40.0% of the Company's issued ordinary share capital will be held in public hands (within the meaning of paragraph 6.1.19R of the Listing Rules, as described below) assuming that the Over-allotment Option is not exercised (and approximately 44.0% if the Over-allotment Option is exercised in full).

Under paragraph 6.1.19R of the Listing Rules, shares are not considered to be held in public hands if they are held, directly or indirectly, by, amongst other persons: • a director of the Company or of any of its subsidiaries (or any person connected therewith); • the trustees of any employee share scheme established for the benefit of the Group's employees; • any person who has an interest in 5% or more of the Company's shares; or • any person who has a right to nominate a person to the Company's board of directors.

The Company, the Selling Shareholders and the Joint Global Co-ordinators expressly reserve the right to determine, at any time prior to Admission, not to proceed with the Global Offer. If such right is exercised, the Global Offer will lapse and any monies received in respect of the Global Offer will be returned to investors without interest.

Reasons for the Global Offer and use of proceeds The Directors believe that the Global Offer and Admission will position the Group for the next stage of its development, including by further raising the profile of the Group, assisting in retaining and incentivising senior management and key employees, and providing it with a platform for continued growth.

The Company intends to raise gross proceeds of £75 million from the issue of New Shares pursuant to the Global Offer. After deducting underwriting commissions and other estimated fees and expenses incurred in connection with the Global Offer, the Company expects to receive net proceeds of £50 million. The Company will not receive any proceeds from the sale of Existing Shares pursuant to any exercise of the Over-allotment Option.

149 The principal uses of the net proceeds of the Global Offer received by the Company are as follows: • to facilitate part of the repayment of outstanding amounts under the Senior Facilities; and • for general corporate purposes.

BofA Merrill Lynch and Goldman Sachs International (which are also acting as joint sponsors), together with Credit Suisse Securities (Europe) Limited and Deutsche Bank AG, London Branch (or their respective affiliates) are members of the syndicate constituting the lenders under the Senior Facilities. It is expected that, as a result of the Group’s repayment described above, their existing outstanding loan commitments to the Company of approximately £14.9 million, £35.2 million, £1.5 million and £16.1 million, respectively, will be repaid in full in line with the approach taken with respect to all other members of the existing syndicate, who are lenders under the Senior Facilities.

The Directors believe that the repayment of the Senior Facilities and their replacement with the New Facilities will assist in making the capital structure more appropriate for a listed company. Following Admission, no shareholder will have any special voting rights over any Shares, and such Shares will rank pari passu in all respects with all other shares, including the New Shares.

Allocation and pricing The Offer Price has been and allocations of Shares under the Global Offer have been or will be determined by the Joint Global Co-ordinators (following consultation with the Company and the Selling Shareholders) after indications of interest from prospective investors were received.

A number of factors were considered in deciding the Offer Price and the bases of allocation under the Global Offer, including the level and nature of the demand for Shares and the objective of encouraging the development of an orderly aftermarket in the Shares.

All Shares issued or sold pursuant to the Global Offer will be issued or sold at the Offer Price.

The rights attaching to the Shares, including any Shares allotted pursuant to the Over-allotment Option, will be uniform in all respects and they will form a single class for all purposes.

Upon accepting any allocation, prospective investors are contractually committed to subscribe or purchase the number of Shares allocated to them at the Offer Price and, to the fullest extent permitted by law, and subject to any statutory withdrawal rights, are deemed to have agreed not to exercise any rights to rescind or terminate, or withdraw from, such commitment.

There are no commissions, fees or expenses to be charged to investors by the Company or the Selling Shareholders under the Global Offer.

Over-allotment and stabilisation In connection with the Global Offer, the Stabilising Manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot Shares or effect other stabilisation transactions with a view to supporting the market price of the Shares or any options, warrants or rights with respect to, or other interest in the Shares or other securities of the Company, in each case at a higher level than that which might otherwise prevail in the open market. The Stabilising Manager is not required to enter into such transactions and such transactions may be effected on any securities market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of conditional dealings of the Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no obligation on the Stabilising Manager or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilisation, if commenced, may be discontinued at any time without prior notice.

In connection with the Global Offer, the Stabilising Manager may, for stabilisation purposes, over-allot Shares up to a maximum of 10% of the total number of Shares comprised in the Global Offer. For the purposes of allowing the Stabilising Manager to cover short positions resulting from any such over-allotments and/or from sales of Shares effected by it during the stabilising period, it is expected that the Over-allotment Shareholders will grant to it, on behalf of the Underwriters, Over-allotment Option pursuant to which the Stabilising Manager may require the Over-allotment Shareholders to sell the Over-allotment Shares at the Offer Price. The Over-allotment

150 Option is exercisable in whole or in part, upon notice by the Stabilising Manager, at any time on or before the 30th calendar day after the commencement of conditional dealings of the Shares on the London Stock Exchange. Any Over-allotment Shares made available pursuant to the Over-allotment Option will rank pari passu in all respects with the Shares, including for all dividends and other distributions declared, made or paid on the Shares, will be sold on the same terms and conditions as the Shares being issued in the Global Offer and will form a single class for all purposes with the other Shares.

Except as required by law or regulation, neither the Stabilising Manager nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Global Offer.

Dealing arrangements The Global Offer is subject to the satisfaction of certain conditions contained in the Underwriting Agreement, including Admission occurring and becoming effective by 8:00 a.m. (London time) on 17 June 2014 or such later date as may be determined in accordance with such agreement, and to the Underwriting Agreement not having been terminated. Further details of the Underwriting Agreement are set out in paragraph 15 of Part 10: Additional Information.

Application has been made to the UKLA for all the Shares to be listed on the premium listing segment of the Official List and application has been made to the London Stock Exchange for the Shares to be admitted to trading on the London Stock Exchange's main market for listed securities.

It is expected that dealings in the Shares will commence on a conditional basis on the London Stock Exchange at 8:00 a.m. (London time) on 12 June 2014. The expected date for settlement of such dealings will be 17 June 2014. All dealings between the commencement of conditional dealings and the commencement of unconditional dealings will be on a “when issued basis”. If the Global Offer does not become unconditional in all respects, any such dealings will be of no effect and any such dealings will be at the risk of the parties concerned.

It is expected that Shares allocated to investors in the Global Offer will be delivered to the Depository following which the Depository will issue Depository Interests, the settlement of which will take place through the system for paperless settlement of trades in listed securities, of which Euroclear UK & Ireland Limited (“EUI”) is the operator (“CREST”) on Admission.

All Shares issued pursuant to the Global Offer will be issued payable in full at the Offer Price. It is intended that, if applicable, definitive share certificates in respect of the Global Offer will be distributed as soon as is reasonably practicable. No temporary documents of title will be issued.

Following Admission to Trading, the Shares, as represented by the Depository Interests, will be registered with ISIN LU1072616219 and SEDOL number BMTRW10.

The Share register will be held in Luxembourg at the Company's registered office. The Depository Interest register will be maintained in the United Kingdom by Capita Asset Services (a trading name of Capita Registrars Limited) on behalf of the Depository.

It is intended that, where applicable, definitive share certificates in respect of the Global Offer will be distributed from 17 June 2014 or as soon as practicable thereafter. Temporary documents of title will not be issued. Dealings in advance of crediting of the relevant CREST stock account shall be at the risk of the person concerned.

It is expected that Admission will become effective and that dealings in the Shares will commence on an unconditional basis on the London Stock Exchange at 8:00 a.m. (London time) on 17 June 2014.

CREST The Company will, prior to Admission, enter into depository arrangements to enable investors to settle and pay for interests in the Shares through the CREST system. CREST is a paperless settlement system allowing securities to be transferred from one person’s CREST account to another without the need to use share certificates or written instruments of transfer. Securities issued by non-UK incorporated companies, such as the Company, cannot themselves be held electronically (i.e. in uncertificated form) or transferred in the CREST system. However, depository interests, representing the securities, can be dematerialised and settled electronically. Pursuant to arrangements to be put in place by the Company, the Depository will hold, through a custodian, the Shares and issue dematerialised depository interests representing the underlying Shares which will be held on trust for the holders of the depository interests.

151 In order to transition to a depository interest structure, legal title to the Shares will be transferred to the Depository's nominated custodian (the “Custodian”) and registered in the name of the Custodian. Through the Custodian, the Depository will hold the beneficial title to the Shares on trust for participating members to whom it will issue the Depository Interests. The Depository Interests will be independent securities constituted under English law which may be held and transferred through the CREST system. The Depository Interests will be created pursuant to and issued on the terms of a Deed Poll (defined below) in favour of the holders of the Depository Interests from time to time. Prospective holders of Depository Interests should note that they will have no rights in respect of the underlying Shares or the Depository Interests representing them against EUI or its subsidiaries. Although the Company's Share register will show the Custodian as the legal holder of the Shares, the beneficial interest in the Shares will remain with the Depository Interest holder, who will, pursuant to contractual arrangements have the benefit of all the rights attaching to the Shares as if the Depository Interest holder were named on the Share register itself. Under the Deed Poll, the Depository may require any holder of Depository Interests to disclose information as to the capacity in which it owns Depository Interests and the nature of its interests. In addition, the Luxembourg law of 11 January 2008 on transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market, as amended (the “Luxembourg Transparency Law”) will apply to holders of Depository Interests in the same manner as if they held legal title to the Shares represented by their Depository Interests. Each Depository Interest will be treated as one Share for the purposes of determining the rights attaching to that Depository Interest, for example, eligibility for any dividends. The Depository Interests will have the same ISIN as the underlying Shares and will not require a separate listing on the Official List. The Depository Interests will be capable of being traded and settlement will be within the CREST system in the same way as any other CREST securities. If a holder of a Depository Interest wishes itself to hold legal title to the Share represented by its Depository Interest, it may request that the relevant Depository Interest is removed from CREST and an entry is made in the Company's Share register to record such legal title. Application will be made for the Depository Interests to be admitted to CREST with effect from Admission.

Depository contracts (a) Deed Poll The DIs will be created pursuant to, and issued on the terms of, the deed poll dated 9 June 2014 (the “Deed Poll”). Each DI will be treated by the Depository as one Share for the purposes of determining, for example, eligibility for any distributions. The Depository has agreed to pass on to holders of DIs any stock or cash benefits received by it as holder of Shares on trust for such DI holder. In summary, the Deed Poll contains, inter alia, provisions to the following effect: • The Depository, which is regulated by the FCA, will hold (itself or through the Custodian), as bare trustee, the underlying Shares issued by the Company and all and any rights and other securities, property and cash attributable to the underlying Shares for the time being held by the Depository or Custodian pertaining to the DIs for the benefit of the DI holders. • The Depository will re-allocate securities or distributions allocated to the Depository or the Custodian pro rata to the Shares held for the respective accounts of the holders of DIs but will not be required to account for fractional entitlements arising from such reallocation. • Each DI holder warrants, inter alia, that the Shares transferred or issued to the Depository or Custodian for the account of such DI holder are free and clear of all liens, charges, encumbrances or third party interests and that such transfers or issues are not in contravention of the articles of association of the Company (“Articles”) or any contractual obligation, or applicable law or regulations binding or affecting such holder. • The Depository and any Custodian must pass on to DI holders all rights and entitlements received by the Depository or the Custodian in respect of the Shares. However, there can be no assurance that all such rights and entitlements will at all times be duly and timely passed on. Rights and entitlements to cash distributions, to information, to make choices and elections and to attend and vote at meetings must, subject to the Deed

152 Poll, be passed on in the form which they are received, together with amendments and additional documentation necessary to effect such passing-on. If arrangements are made which allow a DI holder to take up rights in Shares requiring further payment, the DI holder must put the Depository in cleared funds before the relevant payment date or other date notified by the Depository if it wishes the Depository to exercise such rights. • The Depository will be entitled to cancel DIs and treat the DI holder as having requested a withdrawal of the Shares in certain circumstances, including where a DI holder fails to furnish to the Depository such certificates or representations as to material matters of fact, including his identity, as the Depository deems appropriate. • The Deed Poll contains provisions excluding and limiting the Depository's liability. For example, the Depository shall not be liable to any DI holder or any other person for liabilities in connection with the performance or non-performance of obligations under the Deed Poll or otherwise except as may result from its negligence or wilful default or fraud or that of any person for whom it is vicariously liable, provided that the Depository shall not be liable for the negligence, wilful default or fraud of any Custodian or agent which is not a member of its group unless it has failed to exercise reasonable care in the appointment and continued use and supervision of such Custodian or agent. Furthermore, the Depository's liability to a DI holder will be limited to the lesser of: • the value of the Shares and other deposited property properly attributable to the DIs to which the liability relates; and • that proportion of £10 million which corresponds to the proportion which the amount the Depository would otherwise be liable to pay to the DI holder bears to the aggregate of the amounts the Depository would otherwise be liable to pay to all such DI holders in respect of the same act, omission, or event or, if there are no such amounts, £10 million. • The Depository is entitled to charge DI holders fees and expenses for the provision of its services under the Deed Poll. • The DI holders are required to agree and acknowledge with the Depository that it is their responsibility to ensure that any transfer of DIs by them which is identified by the CREST system as exempt from stamp duty reserve tax (“SDRT”) is so exempt, and to notify the Depository if this is not the case, and to pay to EUI any interest, charges or penalties arising from non-payment of SDRT in respect of such transaction. • Each DI holder is liable to indemnify the Depository and any Custodian (and their agents, officers and employees) against all liabilities arising from or incurred in connection with, or arising from any act related to, the Deed Poll so far as they relate to the DIs (and any property or rights held by the Depository or Custodian in connection with the DIs) held by that holder, other than those resulting from the wilful default, negligence or fraud of the Depository, or the Custodian or agent if such Custodian or agent is a member of the Depository's group or if, not being a member of the same group, the Depository shall have failed to exercise reasonable care in the appointment and continued use and supervision of such Custodian or agent. • The Depository is entitled to make deductions from any income or capital arising from the Shares, or to sell such Shares and make deductions from the sale proceeds therefrom, in order to discharge the indemnification obligations of DI holders. • The Depository may terminate the Deed Poll by giving 30 days' notice. During such notice period holders may cancel their DIs and withdraw their deposited property and, if any DIs remain outstanding after termination, the Depository must, among other things, deliver the deposited property in respect of the DIs to the relevant DI holders or, at its discretion, sell all or part of such deposited property. It shall, as soon as reasonably practicable, deliver the net proceeds of any such sale, after deducting any sums due to the Depository, together with any other cash held by it under the Deed Poll pro rata to holders of DIs in respect of their DIs. • The Depository or the Custodian may require from any holder information as to the capacity in which DIs are or were owned and the identity of any other person with or previously having any interest in such DIs and the nature of such interest and evidence or declarations of nationality or residence of the legal or beneficial owners of DIs and such information as is required for the transfer of the relevant Shares to the DI holders. DI holders agree to provide such information requested and consent to the disclosure of such information by the Depository or Custodian to the extent necessary or desirable to comply with their legal or regulatory obligations. Furthermore, to the extent that the Articles require disclosure to the Company of, or limitations in relation to, beneficial or other ownership of the Shares, the DI holders are to comply with the Company’s instructions with respect thereto.

153 It should also be noted from a practical standpoint that the DI holders will not have the opportunity to directly exercise all of the rights and entitlements which Luxembourg law and the Articles confer on Shareholders and in relation to voting it will be important for DI holders to give prompt instructions to the Depository to vote the Shares on their behalf.

(b) Depository Agreement Under the terms of the depository agreement dated 9 June 2014 between the Company and the Depository (the “Depository Agreement”), the Company appoints the Depository to constitute and issue from time to time, upon the terms of the Deed Poll (summarised above), Depository Interests representing Shares and to provide certain other services in connection with such Depository Interests (including custody services). The Depository agrees that it will provide the various services in good faith and with all reasonable skill and care. The depository services to be provided by the Depository include, for example, to maintain the Depository Interests register, to issue Depository Interests to CREST members and to effect transactions relating to the Depository Interests on behalf of CREST members and the Custodian. The Custodian, to be appointed by the Depository, will provide custody services including the holding of the Shares in respect of which Depository Interests are issued by the Depository and the execution of instructions received from CREST members in relation to the Shares held on their behalf. In addition, the Depository Agreement sets out the procedures to be followed where the Company is to pay or make a dividend or other distribution. The Company agrees to provide such assistance, information and documentation to the Depository as is reasonably required by the Depository for the purposes of performing the services under the Depository Agreement. The Depository is to indemnify the Company and its directors against any loss which they may incur as a result of the fraud, negligence or wilful default of the Depository or the Custodian. The appointment of the Depository will be for a fixed period of three years, subject to early termination, and thereafter by either party giving to the other not less than six months' notice. If one party is in persistent or material breach, which (if capable of remedy) is not remedied within 21 days, or if it goes into insolvency or liquidation or ceases to have the appropriate authorisations, the other party may terminate the Depository Agreement early by notice in writing. The Company is to pay certain fees and charges including, inter alia, an annual fee, a fee to the Registrar, a fee based on the number of Depository Interests which are deposited, transferred or cancelled and certain CREST related fees. The Depository is also entitled to recover reasonable out-of-pocket fees and expenses.

Underwriting arrangements The Company, the Directors, the Underwriters and the Selling Shareholders have entered into the Underwriting Agreement pursuant to which the Underwriters have agreed, subject to certain conditions, to procure purchasers and subscribers for, or themselves to purchase and subscribe, the Shares made available in the Global Offer in each case at the Offer Price. Further details of the terms of the Underwriting Agreement are set out in paragraph 15 of Part 10: Additional Information.

Lock-up arrangements The Selling Shareholders, the Company, SSA Holdco and the Directors have agreed to certain lock-up arrangements. Further details of these arrangements are described under paragraph 17 of Part 10: Additional Information. Shares sold by the Over-allotment Shareholders pursuant to the Over-allotment Option are not subject to the lock-up arrangements.

Stock lending arrangements In connection with settlement and stabilisation, the Stabilising Manager entered into a stock lending agreement with certain of the Selling Shareholders on 12 June 2014 (the “Stock Lending Agreement”). Pursuant to the Stock Lending Agreement, the Stabilising Manager will be able to borrow up to 40,000,000 Shares for the purposes of, amongst other things, allowing it to settle over-allotments, if any, made in connection with the Global Offer. If the Stabilising Manager borrows any Shares from lenders pursuant to the terms of the Stock Lending Agreement, it will be required to return equivalent securities to the lenders or their nominees in accordance with the terms of the Stock Lending Agreement.

154 Withdrawal rights In accordance with article 13(2) of the Luxembourg Prospectus Law, in the event that the Company is required to publish any supplement to this document, investors who have applied for Shares in the Global Offer before the relevant supplement to this document is published shall have at least two clear business days following the publication of the relevant supplement to this document within which to withdraw their offer to subscribe for, or purchase, as the case may be, Shares in the Global Offer in its entirety. The right to withdraw an application to subscribe for, or purchase, as the case may be, Shares in the Global Offer in these circumstances will be available to all investors in the Global Offer. If the application is not withdrawn within the time limits set out in the relevant supplement to this document, any offer to apply for Shares in the Global Offer will remain valid and binding.

Details of how to withdraw an acceptance will be made available if a supplement to this document is published.

Selling and transfer restrictions The distribution of this document and the offer of Shares in certain jurisdictions may be restricted by law and therefore persons into whose possession this document comes should inform themselves about and observe any restrictions, including those set out in the paragraphs that follow. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

United States of America General The Shares have not been, and will not be, registered under the U.S. Securities Act or under any applicable securities laws or regulations of any state of the United States and, subject to certain exceptions, may not be offered or sold in the United States unless the Shares are registered under the U.S. Securities Act or an exemption from the registration requirements of the U.S. Securities Act is available. Accordingly, the Underwriters may offer Shares (1) only through qualified affiliates or agents to persons reasonably believed to be QIBs in reliance on the exemption from the registration requirements of the U.S. Securities Act provided by Rule 144A or another exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and/or (2) in compliance with Regulation S under the U.S. Securities Act.

In addition, until the expiration of 40 days after the commencement of the Global Offer, an offer or sale of Shares within the United States by a dealer (whether or not participating in the Global Offer) may violate the registration requirements of the U.S. Securities Act unless made pursuant to Rule 144A or another exemption from the registration requirements of the U.S. Securities Act.

Due to the following restrictions, purchasers of Shares in the United States are advised to consult legal counsel prior to making any offer for, resale, pledge or other transfer of the Shares.

Rule 144A transfer restrictions Each purchaser in the United States of the Shares offered hereby will be deemed to have represented and agreed that it has received a copy of this document and such other information as it deems necessary to make an investment decision and that (terms used herein that are defined in Rule 144A or Regulation S under the U.S. Securities Act are used herein as defined therein): (a) it is (i) a QIB, (ii) acquiring such Shares for its own account or for the account of one or more QIBs with respect to whom it has the authority to make, and does make, the representations and warranties set forth herein, (iii) acquiring the Shares for investment purposes, and not with a view to further distribution of such Shares and (iv) aware and each beneficial owner of such Shares has been advised, that the sale of Shares to it is being made in reliance on Rule 144A or in reliance on another exemption from, or transaction not subject to, the registration requirements of the U.S. Securities Act; (b) it understands that the Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be reoffered, resold, pledged or otherwise transferred except (A) (x) to a person whom the purchaser and any person acting on its behalf reasonably believes is a QIB purchasing for its own account or for the account of a QIB in a transaction meeting the requirements of Rule 144A, (y) in an offshore transaction complying with Rule 903 or Rule 904 of Regulation S or (z) pursuant to an exemption from registration under the U.S.

155 Securities Act provided by Rule 144 thereunder (if available) and (B) in accordance with all applicable securities laws of the States of the United States; (c) it acknowledges that the Shares (represented by Depository Interests held in CREST) offered and sold hereby in the manner set forth in paragraph (a)(i) above are “restricted securities” within the meaning of Rule 144(a)(3) under the U.S. Securities Act, are being offered and sold in a transaction not involving any public offering in the United States within the meaning of the U.S. Securities Act and that no representation is made as to the availability of an exemption provided by Rule 144 for resales of Shares; (d) it understands that any offer, sale, pledge or other transfer of the Shares made other than in compliance with the above-stated restrictions may not be recognised by the Company; and (e) the Shares (to the extent they are in certificated form), unless otherwise determined by the Company in accordance with applicable law, will bear a legend substantially to the following effect: “THE SECURITY EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHOM THE SELLER AND ANY PERSON ACTING ON ITS BEHALF REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (“QIB”) WITHIN THE MEANING OF RULE 144A UNDER THE U.S. SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. NO REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE U.S. SECURITIES ACT FOR RESALE OF THIS SECURITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THIS SECURITY MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN RESPECT OF SHARES OF THE COMPANY ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK. EACH HOLDER, BY ITS ACCEPTANCE OF THIS SECURITY, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING RESTRICTIONS.”

Australia This document (a) does not constitute a prospectus or a product disclosure statement under the Corporations Act 2001 of the Commonwealth of Australia (“Corporations Act”); (b) does not purport to include the information required of a prospectus under Part 6D.2 of the Corporations Act or a product disclosure statement under Part 6.9 of the Corporations Act; has not been, nor will it be, lodged as a disclosure document with the Australian Securities and Investments Commission (“ASIC”), the Australian Securities Exchange operated by ASX Limited or any other regulatory body or agency in Australia; and (c) may not be provided in Australia other than to select investors (“Exempt Investors”) who are able to demonstrate that they (i) fall within one or more of the categories of investors under section 708 of the Corporations Act to whom an offer may be made without disclosure under Part 6D.2 of the Corporations Act and (ii) are “wholesale clients” for the purpose of section 761G of the Corporations Act.

The Shares may not be directly or indirectly offered for subscription or purchased or sold, and no invitations to subscribe for, or buy, the Shares may be issued, and no draft or definitive offering memorandum, advertisement or other offering material relating to any Shares may be distributed, received or published in Australia, except where disclosure to investors is not required under Chapters 6D and 7 of the Corporations Act or is otherwise in compliance with all applicable Australian laws and regulations. By submitting an application for the Shares, each purchaser or subscriber of Shares represents and warrants to the Company, the Selling Shareholders, the Underwriters and their affiliates that such purchaser or subscriber is an Exempt Investor.

As any offer of Shares under this document, any supplement or the accompanying prospectus or other document will be made without disclosure in Australia under Parts 6D.2 and 7.9 of the Corporations Act, the offer of those Shares for resale in Australia within 12 months may, under the Corporations Act, require disclosure to investors if none of the exemptions in the Corporations Act applies to that resale. By applying for the Shares each

156 purchaser or subscriber of Shares undertakes to the Company, the Selling Shareholders, the Underwriters that such purchaser or subscriber will not, for a period of 12 months from the date of issue or purchase of the Shares, offer, transfer, assign or otherwise alienate those Shares to investors in Australia except in circumstances where disclosure to investors is not required under the Corporations Act or where a compliant disclosure document is prepared and lodged with ASIC.

Canada In respect of offering Shares in Canada, this document constitutes an offering of the securities described herein only in those jurisdictions (namely, the Provinces of Ontario and Québec, collectively, the “Private Placement Provinces”) and to those persons where and to whom they may be lawfully offered for sale, and therein only by persons permitted to sell such securities. This document is not, and under no circumstances is to be construed as an advertisement or a public offering of the securities referred to herein in Canada. No securities commission or similar authority in Canada has reviewed or in any way passed upon this document or the merits of the securities described herein and any representation to the contrary is an offence.

The offering of Shares in Canada is being made solely by this document and any decision to purchase Shares should be based solely on information contained herein. No person has been authorised to give any information or to make any representations concerning this offering other than as contained herein. This document is for the confidential use of only those persons to whom it is delivered by the Underwriters in connection with the offering of the Shares in the Private Placement Provinces.

Responsibility Except as otherwise expressly required by applicable law or as agreed to in contract, no representation, warranty, or undertaking (express or implied) is made and no responsibilities or liabilities of any kind or nature whatsoever are accepted by the Underwriters or any dealer as to the accuracy or completeness of the information contained in this document or any other information provided by the Company or the Selling Shareholders in connection with the offering of the Shares in Canada.

Resale restrictions The distribution of the Shares in Canada is being made on a private placement basis only and is exempt from the requirement that the Company and the Selling Shareholders prepare and file a prospectus with the relevant Canadian securities regulatory authorities. Accordingly, any resale of the Shares must be made in accordance with applicable Canadian securities laws that may require resales to be made in accordance with prospectus and dealer registration requirements or exemptions from the prospectus and dealer registration requirements. These resale restrictions may in some circumstances apply to resales of the Shares outside of Canada. Canadian purchasers are advised to seek legal advice prior to any resale of the Shares.

The Company is also not a “reporting issuer”, as such term is defined under applicable Canadian securities laws, in the Private Placement Provinces. Canadian investors are further advised that the Company and the Selling Shareholders are also not required, for this reason, to file a prospectus or similar document with any securities regulatory authority in Canada qualifying the resale of the Shares to the public in any province or territory of Canada. The Company and the Selling Shareholders currently do not intend to file a prospectus or similar document with any securities regulatory authority in Canada qualifying the resale of the Shares.

Representations of purchasers Each Canadian investor who purchases Shares will be deemed to have represented to the Company, the Selling Shareholders, the Underwriters and any dealer who sells Shares to such purchaser that: (a) the offer and sale of the Shares was made exclusively through the final version of this document and was not made through an advertisement of the Shares in any printed media of general and regular paid circulation, radio, television or telecommunications, including electronic display, or any other form of advertising in Canada; (b) such purchaser has reviewed and acknowledges the terms referred to above under the section entitled Resale Restrictions; (c) where required by law, such purchaser is purchasing as principal, or is deemed to be purchasing as principal in accordance with applicable securities laws of the province in which such purchaser is resident, for its own account and not as agent for the benefit of another person;

157 (d) such purchaser, or any ultimate purchaser for which such purchaser is acting as agent, is entitled under applicable Canadian securities laws to purchase the Shares without the benefit of a prospectus qualified under such securities laws, and without limiting the generality of the foregoing: (i) in the case of an investor resident in British Columbia, Alberta, and Québec, the investor: (A) is an “accredited investor” as defined in section 1.1 of NI 45-106 and is purchasing the Shares from a dealer (i) permitted to rely on the “accredited investor exemption” contained in section 2.3 of NI 45-106 or (ii) registered as an “investment dealer” or “exempt market dealer” within the meaning of subsection 7.1(2)(a) and 7.1(2)(d) of National Instrument 31-103 Registration Requirements and Exemptions (“NI 31-103”), respectively; or (B) is a “permitted client” as defined in section 1.1 NI 31-103 and is purchasing the Shares from a dealer permitted to rely on the “international dealer exemption” contained in section 8.18 of NI 31-103; (ii) in the case of an investor resident in Ontario, the investor: (A) is an “accredited investor” as defined in section 1.1 of NI 45-106 and is purchasing the Shares from a dealer registered as an “investment dealer” or “exempt market dealer” in Ontario; or (B) is a “permitted client” as defined in section 1.1 NI 31-103 and is purchasing the international shares from a dealer permitted to rely on the “international dealer exemption” contained in section 8.18 of NI 31-103; and (e) such purchaser is not a person created or used solely to purchase or hold the Shares as an “accredited investor” as described in paragraph (m) of the definition of “accredited investor” in section 1.1 of NI 45-106.

In addition, each resident of the Private Placement Provinces who purchases the Shares will be deemed to have represented to the Company, the Selling Shareholders, the Underwriters and each dealer from whom a purchase confirmation was received, that such purchaser: (a) has been notified by the Company and the Selling Shareholders: (i) that the Company and the Selling Shareholders may be required to provide certain personal information (“personal information”) pertaining to the purchaser as required to be disclosed in Schedule I of Form 45-106F1 under NI 45-106 (including its name, address, telephone number and the number and value of any Shares purchased), which Form 45-106F1 may be required to be filed by the Company and the Selling Shareholders under NI 45-106; (ii) that such personal information may be delivered to the applicable securities regulator in each Private Placement Province in accordance with NI 45-106, for example, the Ontario Securities Commission (the “OSC”) in Ontario; (iii) that such personal information is collected indirectly by the applicable securities regulators, for example, the OSC under the authority granted to it under the securities legislation of Ontario; (iv) that such personal information is collected for the purposes of the administration and enforcement of the securities legislation of the Private Placement Provinces; and (v) that the public official in Ontario who can answer questions about the OSC’s indirect collection of such personal information is the Administrative Support Clerk at the OSC, Suite 1903, Box 55, 20 Queen Street West, Toronto, Ontario M5H 3S8, telephone: (416) 593-3684; and (b) has authorised the indirect collection of the personal information by the applicable securities regulator, for example, the OSC.

Further, the purchaser acknowledges that its name, address, telephone number and other specified information, including the number of Shares it has purchased and the aggregate purchase price paid by the purchaser, may be disclosed to other Canadian securities regulatory authorities and may become available to the public in accordance with the requirements of applicable Canadian laws. By purchasing Shares, the purchaser consents to the disclosure of such information.

Taxation Any discussion of taxation and related matters contained within this document does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase the Shares

158 in Canada and, in particular, does not address Canadian tax considerations. Canadian investors should consult with their own legal and tax advisers with respect to the tax consequences of an investment in the Shares in their particular circumstances and with respect to the eligibility of the Shares for investment by such investor under relevant Canadian legislation and regulations.

Rights of action for damages or rescission Securities legislation in certain of the Canadian provinces provides purchasers of securities pursuant to an offering memorandum (such as this document) with a remedy for damages or rescission, or both, in addition to any other rights they may have at law, where the offering memorandum and any amendment to it contains an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make any statement not misleading in light of the circumstances in which it was made (a “Misrepresentation”). These remedies, or notice with respect to these remedies, must be exercised or delivered, as the case may be, by the purchaser within the time limits prescribed by applicable securities legislation.

Ontario Section 130.1 of the Securities Act (Ontario) provides that every purchaser of securities pursuant to an offering memorandum (such as this document) shall have a statutory right of action for damages or rescission against the issuer and any selling security holder in the event that the offering memorandum contains a Misrepresentation. A purchaser who purchases securities offered by the offering memorandum during the period of distribution has, without regard to whether the purchaser relied upon the Misrepresentation, a right of action for damages or, alternatively, while still the owner of the securities, for rescission against the issuer and any selling security holder provided that: (a) if the purchaser exercises its right of rescission, it shall cease to have a right of action for damages as against the issuer and the selling security holders, if any; (b) the issuer and the selling security holders, if any, will not be liable if they prove that the purchaser purchased the securities with knowledge of the Misrepresentation; (c) the issuer and the selling security holders, if any, will not be liable for all or any portion of damages that it proves do not represent the depreciation in value of the securities as a result of the Misrepresentation relied upon; and (d) in no case shall the amount recoverable exceed the price at which the securities were offered.

Section 138 of the Securities Act (Ontario) provides that no action shall be commenced to enforce these rights more than: (a) in the case of an action for rescission, 180 days after the date of the transaction that gave rise to the cause of action; or (b) in the case of an action for damages, the earlier of: (i) 180 days after the date that the purchaser first had knowledge of the facts giving rise to the cause of action; or (ii) three years after the date of the transaction that gave rise to the cause of action.

This document is being delivered in reliance on the exemption from the prospectus requirements contained under section 2.3 of NI 45-106 (the “accredited investor exemption”). The rights referred to in section 130.1 of the Securities Act (Ontario) do not apply in respect of an offering memorandum (such as this document) delivered to a prospective purchaser in connection with a distribution made in reliance on the accredited investor exemption if the prospective purchaser is: (a) a Canadian financial institution or a Schedule III bank (each as defined in NI 45-106); (b) the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada); or (c) a subsidiary of any person referred to in paragraphs (a) and (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary.

The foregoing summary is subject to the express provisions of the Securities Act (Ontario) and the rules, regulations and other instruments thereunder, and reference is made to the complete text of such provisions. Such

159 provisions may contain limitations and statutory defences on which the Company and the Selling Shareholders may rely. The enforceability of these rights may be limited as described herein under section entitled Enforcement of legal rights.

The rights of action for damages or rescission discussed above are in addition to, and without derogation from, any other right or remedy which purchasers may have at law.

Enforcement of legal rights The Company is organised under the laws of Luxembourg and its operational headquarters are located in England. All or substantially all of the Company's directors and officers, as well as the Selling Shareholders, the Underwriters and certain of the experts named herein, may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon the Company or such persons. All or a substantial portion of the assets of the Company and such other persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgement against the Company or such persons in Canada or to enforce a judgement obtained in Canadian courts against the Company or persons outside of Canada.

Language of documents Upon receipt of this document, each Canadian investor hereby confirms that it has expressly requested that all documents evidencing or relating in any way to the sale of the securities described herein (including for greater certainty any purchase confirmation or any notice) be drawn up in the English language only. Par la réception de ce document, chaque investisseur canadien confirme par les présentes qu'il a expressément exigé que tous les documents faisant foi ou se rapportant de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus de certitude, toute confirmation d'achat ou tout avis) soient rédigés en anglais seulement.

Japan The Shares have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the “FIEL”). This document is not an offer of securities for sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or entity organised under the laws of Japan) or to others for reoffer or resale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements under the FIEL and otherwise in compliance with such law and any other applicable laws, regulations and ministerial guidelines of Japan.

European Economic Area In relation to each member state of the EEA that has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”), no Shares have been offered or will be offered pursuant to the Global Offer to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that with effect from and including the Relevant Implementation Date, offers of Shares may be made to the public in that Relevant Member State at any time under the following exemptions under the Prospectus Directive: (a) to any legal entity which is a qualified investor as defined under article 2(1)(e) of the Prospectus Directive (a “Qualified Investor”); (b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provisions of the 2010 PD Amending Directive (defined below), 150, natural or legal persons (other than Qualified Investors), subject to obtaining the prior written consent of the Joint Global Co-ordinators for any such offer; or (c) in any other circumstances which do not require the publication by the Company of a prospectus pursuant to article 3(2) of the Prospectus Directive, provided that no such offer of Shares shall result in a requirement for the publication by the Company or any Underwriter of a prospectus pursuant to article 3 of the Prospective Directive or any measure implementing the

160 Prospectus Directive in a Relevant Member State and each person who initially acquires any Shares or to whom any offer is made under the Global Offer will be deemed to have represented, acknowledged and agreed that it is a Qualified Investor.

For the purposes of this provision, the expression an “offer of Shares to the public” in relation to any Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Shares to be offered so as to enable an investor to decide to subscribe for or purchase any Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EC.

In the case of any Shares being offered to a financial intermediary as that term is used in article 3(2) of the Prospectus Directive, such financial intermediary will be deemed to have represented, acknowledged and agreed that the Shares acquired by it in the Global Offer have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to persons in circumstances which may give rise to an offer of any Shares to the public other than their offer or resale in a Relevant Member State to Qualified Investors as so defined or in circumstances in which the prior consent of the Joint Global Co-ordinators has been obtained to each such proposed offer or resale. The Company, the Selling Shareholders, the Underwriters and their affiliates, and others will rely upon the truth and accuracy of the foregoing representation, acknowledgement and agreement. Notwithstanding the above, a person who is not a Qualified Investor and who has notified the Underwriters of such fact in writing may, with the prior consent of the Joint Global Co- ordinators, be permitted to subscribe for or purchase Shares in the Global Offer.

DIFC This document relates to an exempt offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This document is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with exempt offers. The DFSA has not approved this document nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The Shares to which this document relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the Shares offered should conduct their own due diligence on the Shares. If you do not understand the contents of this document you should consult an authorised financial adviser.

Switzerland The Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the Shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland.

Neither this document nor any other offering or marketing material relating to the offering, the Company, the Shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of Shares will not be supervised by, the Swiss Financial Market Supervisory Authority (“FINMA”), and the offer of Shares has not been and will not be authorised under the Swiss Federal Act on Collective Investment Schemes (the “CISA”). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of Shares.

General No action has been or will be taken in any jurisdiction that would permit a public offering of the Shares, or possession or distribution of this document or any other offering material, in any country or jurisdiction where action for that purpose is required. Accordingly, the Shares may not be offered or sold, directly or indirectly, and neither this document nor any other offering material or advertisement in connection with the Shares may be

161 distributed or published in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction.

Persons into whose possession this document comes should inform themselves about and observe any restrictions on the distribution of this document and the offer of Shares, including those in the paragraphs above. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This document does not constitute an offer to subscribe for or purchase any of the Shares offered hereby to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation in such jurisdiction.

162 PART 10: ADDITIONAL INFORMATION

1. RESPONSIBILITY The Company accepts responsibility for the information contained in this document. To the best of the knowledge of the Company, having taken all reasonable care to ensure that such is the case, the information contained in this document is in accordance with the facts and does not omit anything likely to affect its import.

2. CORPORATE INFORMATION 2.1 The Reorganisation Following completion of certain reorganisation steps effective and conditional on Admission or taking place shortly after Admission as described in more detail in paragraph 4.3 below, (1) B&M European Value Retail 1 will become a direct wholly owned subsidiary of the Company, and the Company will be the parent holding company of the Group, comprising the Company and its subsidiary undertakings, (2) CD&R European Value Retail Investment S.à r.l. (“CD&R Holdco”) will become the new direct shareholding company in the Company for CD&R European Value Retail Investment (Cayman), (3) SSA Investments S.à r.l. (“SSA Holdco”) will become a direct shareholding company in the Company for Simon Arora and Bobby Arora and (4) Praxis Nominees Limited will become a direct shareholding company in the Company for Simon Arora, Bobby Arora, Robin Arora, Rani 1 Life Interest Trust (in which Simon Arora and members of his family have indirect beneficial interests) and Rani 2 Life Interest Trust (in which Bobby Arora and members of his family have indirect beneficial interests). Following completion of the reorganisation, Robin Arora, Rani 1 Life Interest Trust (in which Simon Arora and members of his family have indirect beneficial interests), Rani 2 Life Interest Trust (in which Bobby Arora and members of his family have indirect beneficial interests) and Praxis Nominees Limited (which holds shares on behalf of Robin Arora, Rani 1 Life Interest Trust, Rani 2 Life Interest Trust and, through SSA Holdco, Simon Arora and Bobby Arora) will continue to hold their interests in the Company directly.

2.2 The Company (a) The Company is a Luxembourg public limited liability company (société anonyme) incorporated under the laws of Luxembourg, with its registered office and principal place of business at 16, Avenue Pasteur, L-2310, Luxembourg and registered with the Luxembourg Register of Commerce and Companies under number B 187275 and was incorporated on 19 May 2014. The telephone number for the Company is +352 440 929. (b) The principal legislation under which the Company operates and the Shares have been created is the Luxembourg law of 10 August 1915 on Commercial Companies, as amended (the “Luxembourg Company Law”).

2.3 B&M European Value Retail 1 (a) B&M European Value Retail 1 is a Luxembourg private limited liability company (société a responsabilité limitée) incorporated under the laws of Luxembourg, with its registered office at 5, rue Guillaume Kroll, L- 1882, Luxembourg and registered with the Luxembourg Register of Commerce and Companies under number B 173.461 and was incorporated on 4 April 2013. The telephone number for B&M European Value Retail 1 is +352 48 18 28 1. (b) The principal legislation under which the Company operates and its shares have been created is the Luxembourg Company Law.

3. SHARE CAPITAL 3.1 The issued and fully paid share capital of the Company as at the date of this document was as follows:

Issued and fully paid Nominal Value Number Amount Shares ...... 10pence each 260,000 £26,000

163 3.2 The issued and fully paid share capital of the Company immediately following Admission will be as follows:

Issued and fully paid Nominal Value Number Amount Shares ...... 10pence each 1,000,000,000 £100,000,000 3.3 On incorporation the authorised share capital of the Company was £300,000,000 divided into 3,000,000,000 ordinary shares having the nominal value of 10 pence each, issued for and on behalf of CD&R European Value Retail Investment S.à r.l., the founding shareholder of the Company. 3.4 The Articles of the Company shall be amended and fully restated with effect as of Admission upon a decision of the shareholders of the Company taken on 12 June 2014 before a Luxembourg notary, such that they provide as follows with respect to the Company’s authorised share capital: (a) the authorised share capital of the Company is fixed at £300,000,000 to be divided into three billion (3,000,000,000) shares having a nominal value of ten pence (£0.10) each; (b) Within the limits of the authorized capital set out in the Company’s Articles and with such authority expiring on the fifth anniversary of the publication in Mémorial C of the shareholders’ resolutions implementing such authorization, the Board is authorised and empowered to realise any increase of the share capital, with or without share premium, within the limits of the authorised capital in one or more tranches, by the issue of new shares, grant of options exercisable into shares, rights to subscribe for or convert any instruments into shares, against payment in cash or in kind, by contribution of claims, by capitalization of reserves (including in favor of new shareholders) or in any other manner determined by the Board, provided that the Board shall not be authorized to issue new shares in any one (1) year, representing more than one-third of the issued share capital as determined based on the latest publicly available information on the Company’s share capital at the time of the first issue of shares each year. The Board shall also, within the same year, be authorised to issue a further one-third of the issued share capital again as determined based on the latest publicly available information on the Company’s share capital at the time of the first issue of shares in the relevant year, but only if such issuance is on a fully pre-emptive basis by not cancelling or limiting the preferential rights of existing shareholders. (c) The Board is specially authorized to issue such new shares (or grant of options exercisable into shares, rights to subscribe for or convert any instruments into shares) by cancelling or limiting the existing shareholders’ preferential rights to subscribe for the new shares (or options exercisable into new shares, or instruments convertible into new shares), provided that the Board may only issue such new shares (or grant such options or rights) pursuant to the authorisation in the Company’s Articles on a non-pre-emptive basis by cancelling or limiting shareholders’ preferential right to subscribe such new shares (or options or rights) (1) in respect of the issue for cash of such number of new shares as represents up to 5% of the issued share capital (as determined based on the latest publicly available information on the Company’s share capital at the time of the first issue of shares each year) per year (or the grant of such options or rights in respect of such number of new shares) or (2) in connection with such arrangements as the Board considers necessary or appropriate, in the context of otherwise pre-emptive issues of shares, to deal with treasury shares, fractional entitlements, record dates and legal, regulatory or practical problems in, or under the laws of, any territory or any other matter or (3) in connection with employee share options or similar awards. For the avoidance of doubt, these limits fall within the initial one-third limit referred to paragraph (b) above. (d) Notwithstanding the above, the Board is also specially authorised to issue new shares up to the maximum amount of the authorised capital by cancelling or limiting the existing shareholders’ preferential right to subscribe for the new shares in respect of issue of shares in relation to admission of the Company’s shares to trading on the main market for listed securities of the London Stock Exchange. For the avoidance of doubt, none of the limits mentioned in the above paragraphs (except for the maximum amount of the authorised capital) shall apply in this case and the shares may be issued in any of the manners and for any of the considerations described in the paragraph (b) above.

164 3.5 The Company has not issued any partly paid shares nor any convertible securities, exchangeable securities or securities with warrants. The Company does not hold any shares in treasury. There are no shares in the issued share capital of the Company that do not represent capital. 3.6 The Company will be subject to the continuing obligations of the Listing Rules published by the FCA with regard to the issue of securities. 3.7 The Shares are in registered form and, from Admission, will be capable of being held in uncertificated form and title to such Shares may be transferred by means of a relevant system (as defined in the Uncertificated Securities Regulations 2001(SI 2001 No. 3755)). As the Shares are being issued by a non- UK incorporated company, the Shares will be held under a depository interest arrangement i.e. the Depository will hold, through the Custodian, the Shares and issue dematerialised Depository Interests representing the underlying Shares which will be held on trust for the holders of the Depository Interests. Through the Custodian, the Depository will hold the beneficial title to the Shares on trust for participating members to whom it will issue the dematerialised Depository Interests. The Depository Interests will be independent securities constituted under English law which may be held and transferred through the CREST system.

165 4. GROUP STRUCTURE 4.1 The structure chart below illustrates the structure of the Group as at the date of this document (excluding ownership amount percentages), before completion of the Reorganisation due to take place immediately prior to (and conditional on) Admission.

Certain other Clayton, Dubilier & co-invest Rice Fund VIII vehicles(1)

Sundeep Rani 1 Rani 2 Bobby (Simon) Robin Arora Life Interest Life Interest Arora Arora Trust Trust CD&R European Value Retail Investment (Cayman) L.P.

B&M European Value Retail 1 S.à.r.l.

B&M European Value Retail Holdco 1 Limited

B&M European Value Retail Holdco 2 Limited

B&M European Value Retail Holdco 3 Limited

B&M European Value Retail Holdco 4 Limited

B&M European Value Retail 2 S.à.r.l.

B&M European Value Retail Homefocus Group Limited Firesource Limited Multi-Lines International Germany GmbH (Ireland) (UK) Company Limited (Germany) (HK)

J.A. Woll Handels GmbH Taizhou Linch (Germany) Electrical Industrial Limited (HK)

Other Subsidiaries Meltore Limited B&M Retail Limited Opus Homewares Limited (Germany) (UK) (UK) (UK)

= operating company = shareholder

= holding company = dormant company

(1) F&F Fund VIII, Advisor Fund VIII Co-Investor and CD&R B&M Co-Investor, L.P.

166 4.2 The structure chart below illustrates the structure of the Group upon Admission (excluding ownership amount percentages and assuming no exercise of the Over-allotment Option), following completion of the Reorganisation which will take effect immediately prior to (and conditional on) Admission.

Sundeep Bobby (Simon) Arora Arora Certain other Clayton, Dubilier & co-invest Rice Fund VIII (1) vehicles Robin Arora

SSA CD&R European Value Investments S.à.r.l. Retail Investment (Cayman) L.P

CD&R European Praxis Nominees Public Value Retail Limited Float Investment S.à.r.l.

B&M European Value Retail S.A.

B&M European Value Retail 1 S.à.r.l.

B&M European Value Retail Holdco 1 Limited

B&M European Value Retail Holdco 2 Limited

B&M European Value Retail Holdco 3 Limited

B&M European Value Retail Holdco 4 Limited

B&M European Value Retail 2 S.à.r.l.

B&M European Value Retail Homefocus Group Limited Firesource Limited Multi-Lines International Germany GmbH (Ireland) (UK) Company Limited (Germany) (HK)

J.A. Woll Handels GmbH Taizhou Linch (Germany) Electrical Industrial Limited (HK)

Other Subsidiaries Meltore Limited B&M Retail Limited Opus Homewares Limited (Germany) (UK) (UK) (UK)

= operating company = shareholder

= holding company = dormant company

(1) F&F Fund VIII, Advisor Fund VIII Co-Investor and CD&R B&M Co-Investor, L.P.

4.3 In connection with the Reorganisation (defined below), (i) B&M European Value Retail S.A. was incorporated under the laws of Luxembourg and registered with the Luxembourg Register of Commerce and Companies on 19 May 2014; (ii) CD&R Holdco was incorporated under the laws of Luxembourg and registered with the Luxembourg Register of Commerce and Companies on 14 May 2014; and (iii) SSA Holdco was incorporated under the laws of Luxembourg and registered with the Luxembourg Register of Commerce and Companies on 13 May 2014.

167 The following reorganisation steps will take place in the order set out below, each step being effective on and conditional upon Admission: • CD&R Bounty (Cayman) transfers the shares and Preferred Equity Certificates it holds in B&M European Value Retail 1 to CD&R Holdco in exchange for the allotment and issue by CD&R Holdco of a number of shares and Preferred Equity Certificates in CD&R Holdco; • each of the shareholders of B&M European Value Retail 1 transfer their shares and Preferred Equity Certificates to the Company in exchange for the allotment and issue by the Company of a number of Shares (including Shares to compensate holders of Preferred Equity Certificates that pay a cash yield for foregoing that cash yield) to be determined following the publication of the Pricing Statement and CD&R Holdco will also receive a cash balancing payment of £26,000 from the Company. The Shares issued in exchange for the transfer of the accrued unpaid interest coupon on the Preferred Equity Certificates held by Simon Arora, Bobby Arora, Robin Arora, Rani 1 Life Interest Trust and Rani 2 Life Interest Trust will be allotted and issued to Praxis Nominees Limited. Concurrently the Group will terminate (i) a consulting fee agreement with CD&R LLC in consideration for an amount of £10 million, which is lower than the fees that would have been payable under the consulting agreement if it had not been terminated prior to the expiry of its term, and (ii) an indemnification agreement with the CD&R Investors and CD&R (save for accrued rights and obligations; and • Simon Arora and Bobby Arora transfer the Shares they hold in the Company that are to be retained on Admission to SSA Holdco in exchange for the allotment and issue by SSA Holdco of securities in SSA Holdco to each of Simon Arora, Bobby Arora, and Praxis Nominees Limited. The following reorganisation steps will take place in the order set out below, each step being effective shortly after and conditional upon Admission: • the Company contributes all the Preferred Equity Certificates it holds in B&M European Value Retail 1 to the capital reserves of B&M European Value Retail 1; • B&M Retail Limited (“B&M Retail”) distributes to Firesource (i) the receivable comprising all amounts owed to B&M Retail by B&M Holdco 4 pursuant to the terms of an intercompany loan (the “B&M Receivable”) and (ii) a cash amount; • Firesource distributes to B&M European Value Retail 2 (i) the B&M Receivable and (ii) a cash amount; • B&M European Value Retail 2 distributes the B&M Receivable to B&M Holdco 4; • B&M Holdco 3 transfers the interest and principal outstanding on the loan notes issued by B&M Holdco 4 to B&M Holdco 4 in exchange for the allotment and issue of shares in B&M Holdco 4 and the loan notes are cancelled by B&M Holdco 4; • B&M Holdco 3 undertakes a bonus issue of ordinary shares to its shareholder using an amount standing to the credit of its current (realised and unrealised) profit and loss reserves; • each of B&M Holdco 3 and B&M Holdco 4 undertake a capital reduction using the solvency statement procedure of the entire amount of their ordinary share capital created by the bonus issues under step (i) above and a portion of their existing ordinary share capital to create distributable reserves; • B&M Holdco 4 distributes the receivable comprising all amounts owed to B&M Holdco 4 by B&M European Value Retail Holdco 2 Limited (“B&M Holdco 2”) pursuant to the terms of an intercompany loan (the “B&M Holdco 4 Receivable”) to B&M Holdco 3; • B&M Holdco 3 distributes to B&M Holdco 4 Receivable to B&M Holdco 2; • B&M European Value Retail 1 transfers the receivable comprising all amounts owed to B&M European Value Retail 1 by B&M Holdco 2 pursuant to the terms of an intercompany loan (the “B&M Holdco 2 Receivable”) to B&M European Value Retail Holdco 1 Limited (“B&M Holdco 1”) in exchange for the allotment and issue of shares in B&M Holdco 1; • the B&M Holdco 2 Receivable is capitalised by B&M Holdco 2 so that B&M Holdco 1 receives new shares in B&M Holdco 2; and • each of B&M Holdco 1 and B&M Holdco 2 undertake a capital reduction using the solvency statement procedure of their existing ordinary share capital to create distributable reserves. Each of the forgoing steps collectively comprise the “Reorganisation”.

4.4 Following Admission it is intended that B&M Holdco 3 will transfer its shares in B&M Holdco 4 to B&M Holdco 1 and each of B&M Holdco 2 and B&M Holdco 3 will be wound up.

168 5. ARTICLES OF ASSOCIATION 5.1 The Articles adopted pursuant to a shareholder resolution of the Company on 12 June 2014 subject to and conditional upon Admission contain, amongst others, provisions to the following effect: 5.1.1 Objects The Company’s object is to acquire and hold interests, directly or indirectly, in any form whatsoever, in other Luxembourg or foreign entities, by way of, amongst others, the subscription or acquisition of any securities and rights through participation, contribution, underwriting, firm purchase or option, negotiation or in any other way, or of financial debt instruments in any form whatsoever, and to administrate, develop and manage such holding of interests. The objects of the Company are set out in full in article 3 of the Articles. 5.1.2 Limited Liability The liability of the Shareholders is limited to any unpaid amount on the Shares in the Company held by them. 5.1.3 Rights Attaching to Shares Subject to the provisions of the Luxembourg Company Law: (a) the Board is authorised to issue new Shares within the limits of the authorised capital clause; (b) the Shareholders’ meeting may decide to issue new Shares, create new classes of shares and determine the features, rights and restrictions of such classes of shares; (c) the Shareholders’ meeting may decide to issue redeemable shares and determine the terms, conditions, manner of redemption and redemption of those redeemable shares; and (d) Shares may be bought back by the Company upon authorisation of the Shareholders' meeting. (e) The issued and subscribed capital is £100,000,000 divided into 1,000,000,000 registered shares with a nominal value of 10 pence each, fully paid. All the shares shall be issued as fully paid-up. (f) The Company's authorised share capital is £300,000,000 which on the basis of each Share having a nominal value of 10 pence would correspond to 3,000,000,000 Shares. (g) Within the limits of the authorised capital set out in this paragraph 5, the Board of Directors is authorised and empowered to realise any increase of the share capital, with or without share premium, within the limits of the authorised capital in one or more tranches, by the issue of new shares, grant of options exercisable into shares, rights to subscribe for or convert any instruments into shares, against payment in cash or in kind, by contribution of claims, by capitalisation of reserves (including in favour of new shareholders) or in any other manner determined by the Board of Directors, provided that the Board of Directors shall not be authorised to issue new shares in any one (1) year, representing more than one-third of the issued share capital as determined based on the latest publicly available information on the Company’s share capital at the time of the first issue of shares each year. The Board of Directors shall also, within the same year, be authorised to issue a further one-third of the issued share capital again as determined based on the latest publicly available information on the Company’s share capital at the time of the first issue of shares in the relevant year, but only if such issuance is on a fully pre-emptive basis by not cancelling or limiting the preferential rights of existing shareholders. (h) The authorised capital clause provides that the Board is specially authorised to issue new Shares (or grant options exercisable into Shares or rights to subscribe for or convert any instruments into Shares) by cancelling or limiting the existing shareholders’ pre-emption rights (i) with respect to such number of new Shares issued for cash as represents up to 5% of the issued share capital per year or the grant of such options or rights in respect of such number of Shares; (ii) in connection with such arrangements as the Directors consider necessary or appropriate, in the context of otherwise pre-emptive issues of Shares, to deal with treasury shares, fractional entitlements, record dates and legal,

169 regulatory or practical problems in, or under the laws of, any territory or any other matter; and (iii) in conjunction with employee share options or similar awards. For avoidance of doubt, these limits fall within the one-third limit mentioned above (the “Authorised Capital Clause”). (i) The authorisation given in the Authorised Capital Clause will expire on the fifth anniversary of the publication of the shareholders’ resolutions taken on 12 June 2014 and effective on 17 June 2014 of the Company in the Luxembourg official gazette (Mémorial C) and can be renewed by Shareholder approval. (j) Notwithstanding the above, the Board is specially authorised to issue new Shares up to the maximum amount of the authorised share capital of the Company by cancelling or limiting the existing Shareholders' pre-emption rights to subscribe for new Shares in respect of the New Shares to be issued by the Company at Admission. (k) Voting rights of shareholders Every Shareholder will be entitled to vote at a general meeting and unless otherwise provided by the Luxembourg Company Law: (i) each holder of Shares shall have one vote in respect of each Share held by him; and (ii) each Shareholder may vote through voting forms sent to the Company's registered office or to the address specified in the convening notice or through a proxy who has been duly appointed and is present at the meeting. If there are several owners of a Share, the Company is entitled to suspend the exercise of the rights attaching thereto until one person is designated as being the owner, vis-à-vis the Company, of that Share. If there are several owners of a Share, and unless otherwise notified to the Company by those holders, the person whose name first appears in the Company's Share register shall be considered as being the designated owner for these purposes towards the Company. (l) Simple majority Unless otherwise provided by the Luxembourg Company Law, all decisions by an annual or ordinary shareholders’ meeting shall be taken by simple majority of the votes cast, regardless of the proportion of the capital represented by Shareholders attending the meeting. (m) Quorum and special majority An extraordinary shareholders’ meeting convened to approve amendments to the Articles, including without limitation, to alter the share capital of the Company, shall not be quorate unless at least one half of the capital of the Company is represented. If there is not a quorum present, a second meeting may be convened, in the manner prescribed by the Articles. The second meeting shall be quorate regardless of the proportion of the capital of the Company represented. At both meetings, resolutions, in order to be adopted, must be carried by at least two-thirds of the votes cast. Where there is more than one class of shares and the resolution of the shareholders’ meeting is such as to change the respective rights thereof, the resolution must, in order to be valid, fulfil the conditions as to attendance and majority described above with respect to each class. The nationality of the Company may be changed and the commitments of its Shareholders may be increased only with the unanimous consent of all the Shareholders and bondholders (if any). (n) Pre-emption rights Subject to the provisions of the Luxembourg Company Law, any issue of new Shares within the authority described above is to be made to Shareholders in proportion to their existing holdings of Shares except that: (i) pre-emption rights do not apply to the issue of Shares by contribution in kind; (ii) the Directors are authorised to limit or cancel Shareholders’ pre-emption rights in accordance with the Authorised Capital Clause; and

170 (iii) pre-emption rights can be limited or cancelled by Shareholder resolution. Pre-emption rights shall also apply where the Company is willing to sell treasury shares and, in that case, the Company shall first offer treasury shares to the shareholders in proportion to their existing participation in the issued share capital of the Company. (o) Distributions and interim dividends Each year at the annual general meeting of the Shareholders (if such a date is not a business day in Luxembourg, such shareholder’s meeting shall be held on the immediately preceding business day), which the Articles state shall take place on 30 July at 12.00 p.m. (noon) Central European Time, or at a subsequent meeting of the Shareholders, at least 5% of the net profits must be allocated to the legal reserve account. This allocation is not mandatory if, and as long as, the legal reserve amounts to at least one tenth of the capital of the Company. After allocation of the legal reserve, the Shareholders’ meeting then determines the appropriation and distribution of the available distributable funds. The Board is authorised in the Articles and may resolve to declare and pay interim dividends provided (amongst other things): (i) interim accounts of the Company show that there are sufficient funds available for distribution; and (ii) the amount to be distributed does not exceed total profits since the end of the last financial year for which the annual accounts have been approved plus any profits carried forward and sums drawn from reserves available for this purpose, less any losses carried forward and sums to be placed in reserve pursuant to the requirements of the Luxembourg Company Law and Articles. The decision of the Board to distribute an interim dividend may not be taken more than two months after the date that interim accounts have been drawn up. Any distribution made in infringement of the Luxembourg Company Law must be returned by the shareholders who have received it if the Company can prove that the shareholders knew of the irregularity of the distributions made in their favour or could not, in the circumstances, have been unaware of it. Except as otherwise provided by the rights attached to shares, distributions may be declared or paid in any currency. Where the payments on account of interim dividends exceed the amount of the dividend subsequently decided upon by the shareholders' meeting, the overpayment made shall be deemed to have been paid on account of the next dividend. No dividend or other amount payable by the Company in respect of a share bears interest as against the Company unless otherwise provided by the rights attached to the share. The Shareholders’ meeting may decide that payment of a dividend may be satisfied wholly or in part by the distribution of specific assets and in particular of paid up shares or debentures of another company. Any unclaimed dividend, interest or other amount payable by the Company in respect of a share may be invested or otherwise made use of by the Board for the benefit of the Company until claimed. The Luxembourg civil code (article 2277) sets the prescription period (statute of limitations) for claims for payment at five years. Although Luxembourg law does not specify the prescription period after which time a shareholder’s entitlement to payment of dividends declared, but unpaid, lapses, Belgian case law and French law—to which the Luxembourg courts often look as guidance—apply a five year prescription period and certain Luxembourg legal scholars by extension consider this to be as well the applicable prescription period with respect to a shareholder's entitlement to declared, but unpaid, dividends. Thus it is considered that distributions that have not been claimed within five years from the date that they first became available shall lapse and be given to the Company.

171 (p) Liquidation rights In the event of the Company’s dissolution, the Company must be liquidated according to applicable Luxembourg law. The balance of the Company’s equity remaining after the payment of debts (and the cost of liquidation) shall be distributed to the Shareholders pro rata to the aggregate number of Shares held by each Shareholder, unless otherwise decided on by the Shareholders' meeting. On a voluntary winding up of the Company, the liquidator may divide among the Shareholders in kind the whole or any part of the assets of the Company, whether or not the assets consist of property of one kind or of different kinds. For this purpose the liquidator may set the value he deems fair on a class or classes of property, and may determine on the basis of that valuation and in accordance with the then existing rights of members how the division is to be carried out between members or classes of members. The liquidator may not, however, distribute to a Shareholder without his/her consent an asset to which there is attached a liability or potential liability for the owner. 5.1.4 Change of Capital Without prejudice to the authorisation given to the Board through the Authorised Capital Clause, the issued share capital and the authorised capital of the Company may be increased by resolutions of the Shareholders adopted in the manner legally required for amending the Articles. The issued share capital and the authorised capital of the Company may be reduced by resolutions of the Shareholders adopted in the manner legally required for amending the Articles. If the reduction is to be carried out by means of a repayment to shareholders (either directly or by allocation of the capital reduction proceeds to a distributable reserve payable to the shareholders who are shareholders of the Company at the time the decision to distribute part or the whole reserve is taken) or a waiver of their obligation to pay up their shares, creditors whose claims predate the publication in the Mémorial of the minutes of the shareholders’ meeting deciding the capital reduction may, within 30 days from such publication, apply for the constitution of security to the judge presiding the chamber of the Tribunal d’Arrondissement dealing with commercial matters and sitting as in urgency matters. The president may only reject such an application if the creditor already has adequate safeguards or if such security is unnecessary, having regard to the assets of the Company. No payment may be made or waiver given to the shareholders until such time as the creditors have obtained satisfaction or until the judge presiding the chamber of the Tribunal d’Arrondissement dealing with commercial matters and sitting as in urgency matters, has ordered that their application should not be acceded to. 5.1.5 Variation of Rights The rights attached to a class of shares may be varied by the Shareholders' meeting in accordance with the provisions of the Luxembourg Company Law. The rights attached to a class of shares are not, unless otherwise expressly provided for in the rights attaching to those shares, deemed to be varied by the issue of further shares of the same class or by the redemption by the Company of its own shares. Where there is more than one class of share and a shareholders' meeting resolves to amend the respective rights thereof, the resolution must, in order to be valid, fulfil the conditions as to attendance and majority set out in section 5.1 (c)(iii) (Quorum and special majority) above with respect to each class. 5.1.6 Redeemable Shares Subject to the provisions of the Luxembourg Company Law (and article 49-8 in particular), shares may be issued on terms that they are to be redeemed at the option of the Company or the holder, and the shareholders’ meeting may determine the terms, conditions and manner of redemption of any such shares. In this case, the Articles shall specify that such shares are redeemable shares in accordance with the provisions of the Luxembourg Company Law. Subject to the provisions of the Luxembourg Company Law, the shareholders’ meeting may also authorise the Company to acquire itself or through a person acting in his own name but on

172 the Company's behalf, its own shares by simple majority of the votes cast, regardless of the proportion of the capital represented by shareholders attending the meeting. Save for the foregoing, the Articles do not otherwise provide for redeemable shares. 5.1.7 General Meetings The Board as well as the statutory auditors may convene a Shareholders’ meeting. They shall be obliged to convene it so that it is held within a period of one month if shareholders representing at least 10% of the Company’s share capital require so in writing with an indication of the agenda. Convening notices for every shareholders’ meeting (the “Convening Notice”) shall be published at least 30 days before the date of the shareholders’ meeting in: (a) Mémorial C and in a Luxembourg newspaper; and (b) in such media which may reasonably be expected to be relied upon for the effective dissemination of information to the public throughout the EEA, and which are accessible rapidly and on a non-discriminatory basis (the “EEA Publication”). Convening Notices for shareholders meetings will also be published in accordance with all applicable laws and in particular the on-going disclosure and stock exchange requirements to which the Company is subject. If the required quorum is not met on the date of the first convened shareholders’ meeting another meeting may be convened by publishing the Convening Notice in the Official Gazette, a Luxembourg newspaper and the EEA Publication 17 days prior to the date of the reconvened meeting provided that (i) the first shareholders’ meeting was properly convened in accordance with the above provisions; and (ii) no new item has been added to the agenda. The Convening Notice shall contain at least the following information: (a) indicate precisely the date and location of the shareholders’ meeting and its proposed agenda; (b) contain a clear and precise description of the procedures that shareholders must follow in order to participate in and to cast their vote in the shareholders’ meeting, including information on: (i) the rights available to shareholders, and where applicable, the deadline by which those rights may be exercised and the electronic address to which shareholders may address their requests as well as the indication that details relating to these rights are available on the Company’s website (www.bandmretail.com); (ii) the procedure for voting by proxy, notably the forms to be used to vote by proxy and the means by which the Company is prepared to accept electronic notification of appointment of proxy holders; (iii) procedures for participating in the shareholders’ meeting through electronic means and for voting by post or by electronic means at the shareholders’ meeting; (iv) where applicable, the record date, being midnight (00:00) on the day falling 14 days before the date of the shareholders’ meeting (the “Record Date”) with an explanation of the manner in which shareholders must register and a statement that only persons who are shareholders at the Record Date shall have the right to participate and vote in the shareholders’ meeting; (v) indication of the postal and electronic addresses where, and how, the full and unabridged text of the documents and draft resolutions referred to above may be obtained; and (vi) indication of the address of the website (www.bandmretail.com) on which the information is available. For a continuous period from the date of publication of the Convening Notice of the shareholders’ meeting and including the date of the shareholders’ meeting, the Company must make available to its shareholders on its website (www.bandmretail.com) the following information: (a) the Convening Notice;

173 (b) the total number of shares and the voting rights as at the date of the Convening Notice including separate totals for each class of shares when the Company’s capital is divided into two or more classes of shares;

(c) the documents to be submitted to the shareholders’ meeting;

(d) the draft resolutions of the shareholders’ meeting or where no such resolutions are proposed to be adopted, a comment from a member of the Board of Directors for each item on the proposed agenda of the shareholders’ meeting. Any draft resolution(s) submitted by shareholder(s) shall be added to the website (www.bandmretail.com) as soon as possible after the Company has received them; and

(e) where applicable, the forms to be used to vote by proxy and to vote by correspondence, unless such forms are sent directly to each shareholder. Where such forms cannot be made available on the website (www.bandmretail.com) for technical reasons, the Company shall indicate on its website (www.bandmretail.com) how the forms can be obtained on paper. In this case the Company shall be required to send the forms by post and free of charge to every shareholder who so requests.

The Convening Notice is sent within the 30 day, or 17 day period, as applicable, to registered shareholders, the members of the Board of Directors and the approved independent auditors (réviseurs d’entreprises agréés) (the “Addressees”). This communication shall be sent by letter to the Addressees, unless the Addressees (or any one of them) have expressly and in writing agreed to receive communication by other means, in which case such Addressee(s) may receive the convening notice by such other means of communication.

Where all the shares are in registered form and represent the entire share capital, the Convening Notice needs to be sent only by registered letters to the Addressees, unless the Addressees (or any one of them) have expressly and in writing agreed to receive communication by other means, in which case such Addressee(s) may receive the convening notice by such other means of communication.

Shareholders representing at least 5% of the Company’s share capital may (a) request the adjunction of one or several items to the agenda of any shareholders’ meeting and (b) table draft resolutions for items included or to be included on the agenda of a shareholders’ meeting. Such requests must:

(i) be in writing and sent to the Company by post or electronic means to the address provided in the Convening Notice and be accompanied by a justification or draft resolution to be adopted in the shareholders’ meeting;

(ii) include the postal or electronic address at which the Company may acknowledge receipt of the requests; and

(iii) be received by the Company at least 22 days before the date of the relevant shareholders’ meeting.

The Company shall acknowledge receipt of requests referred to above within 48 hours from receipt. The Company shall prepare a revised agenda including such additional items on or before the fifteenth day before the date of the relevant shareholders’ meeting.

In case all the shareholders are present or represented and if they declare that they have been informed of the agenda of the meeting, they may waive all convening requirements and formalities of publication of the notice for the shareholders’ meeting.

The Chairman of the Board shall preside as chairman at a Shareholders' meeting and each Director shall be entitled to attend and speak at a Shareholders' meeting.

5.1.8 Failure to Disclose Interests in Shares

If information in relation to the acquisition or disposal of holdings of Shares is not notified to the Company as required under the Luxembourg Transparency Law, the exercise of voting rights in relation to those Shares shall be suspended. The suspension shall only be lifted once the Shareholder makes the required notification under the Luxembourg Transparency Law.

174 5.1.9 Transfer of shares Transfers shall be carried out by means of a declaration of transfer entered in the Company’s share register, dated and signed by the transferor and the transferee or by their duly authorised representatives, and in accordance with the rules on the assignment of claims laid down in article 1690 of the Luxembourg Civil Code. The Company may accept and enter in its Share register a transfer on the basis of correspondence or other documents recording the agreement between the transferor and the transferee. The above is without prejudice to the process for the transfer of depository interests. 5.1.10 Directors (a) Number of Directors The Company must be managed by a Board, consisting of at least three members (including at least one Director proposed for appointment by CD&R Holdco and one Director proposed for appointment by the Arora Family) but no more than 12 members. The Board shall be divided into two categories, (i) the executive directors being the Directors involved in the management of the group to which the Company belongs (the “Executive Directors”), and (ii) the non-executive directors being the Directors not qualifying as Executive Director (the “Non-Executive Directors”), together referred to as the “Board” and individually a “Director”. The Board in order to be validly constituted shall at all times be composed as follows: (i) as long as CD&R Holdco, and together with its associates, in the aggregate, hold 10% or more of the Company’s share capital, two Directors shall be appointed from candidates put forward by CD&R Holdco (save that this requirement shall be reduced to one Director for so long as Sir Terry Leahy is a Director). (ii) as long as CD&R Holdco, and together with its associates, in the aggregate, hold 5% or more but less than 10% of the Company’s share capital, one Director shall be appointed from candidates put forward by CD&R Holdco. (iii) as long as the Arora Family, and together with their respective associates, in the aggregate, hold 10 per cent or more of the Company’s share capital, one Director shall be appointed from candidates put forward by the Arora Family. (iv) any other Director appointed by the Shareholders. For the purposes of this paragraph, “associates” has the meaning given from time to time in the Listing Rules when used in relation to a controlling shareholder. (b) Directors’ shareholding qualification A Director shall not be required to hold shares in the Company. (c) Appointment of Directors Directors are appointed for a duration determined by a Shareholders’ meeting which may not exceed six years. If no duration is specified by the Shareholders’ meeting, the duration shall be deemed to be one year. Without prejudice to the power of the Shareholders’ meeting to appoint a person to be a director pursuant to the Articles, in the event of vacancy of a member of the Board because of death, retirement or otherwise, the remaining Directors may, by majority vote, elect a person who is willing to act as a director of the Company to fill such vacancy until the next Shareholders' meeting which will be asked to ratify such election. (d) Removal of Directors The Shareholders’ meeting may remove a Director at any time including before the expiry of his period of office by ordinary shareholders’ resolution and may by ordinary resolution appoint another person who is willing to act to be a Director in his place. (e) Directors present by proxy Any Director may act at any meeting of the Board by appointing in writing, by email, telegram or telefax another Director as his proxy. One Director can represent more than

175 one other Director. A Director may also appoint another Director to represent him by phone to be confirmed in writing at a later stage. (f) Proceedings of the Board The Board may meet for the despatch of business, adjourn and otherwise regulate its proceedings as it thinks fit. The quorum necessary for the transaction of business is half of the directors present in person or represented by proxy. A duly convened meeting of the Board at which a quorum is present is competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Board. The Board shall elect a Chairman from among its members. The Chairman shall chair the board meetings. If the Chairman is unable to be present, he will be replaced by a Director elected for this purpose from among the Directors present at the meeting. All questions and decisions arising at a meeting of the Board are determined by a majority of votes cast. In case of an equality of votes the Chairman has a second or casting vote. But this does not apply if in accordance with the Articles, the Chairman or other Director is not to be counted as participating in the decision-making process for quorum or voting purposes. A Director may participate in a meeting of the Board or a committee of the Board through the medium of conference telephone, video teleconference or similar form of communication equipment provided that these means must comply with technical features which guarantee an effective participation to the meeting allowing all the persons taking part in the meeting to hear one another on a continuous basis and allowing an effective participation of such persons in the meeting. Circular resolutions of the Board can be validly taken if approved in writing and signed by all Directors in person or represented by proxy by another Director. Such approval may be in a single or in several separate documents sent by fax, e-mail, telegram or telex. These resolutions shall have the same effect as resolutions voted at the Directors' meetings, duly convened. The Board may delegate any of its powers, authorities and discretions (with power to sub delegate) to a committee consisting of one or more persons (whether a member or members of the Board or not) as it thinks fit. A committee may exercise its power to sub delegate by sub delegating to any person or persons (whether or not a member or members of the Board or of a committee). The Board may at any time revoke the delegation or alter any terms and conditions or discharge the committee in whole or in part. The Board may confer all powers and special mandates to any person, who need not be a Director, appoint and dismiss all officers and employees and fix their emoluments. (g) Directors’ fees Unless otherwise decided by the Shareholders' meeting by ordinary resolution the Company shall pay to the directors for their services as directors such amount of aggregate fees as the Board decides (not exceeding £800,000 per annum or such larger amount as the Shareholders’ meeting by ordinary resolution may decide). The aggregate fees shall be divided among the directors in such proportions as the Board decides or, if no decision is made, equally. Subject to the provisions of the Luxembourg Company Law and the Articles (and in particular article 5.2) and the requirements of the Listing Rules, the Board may, within the framework of the Authorised Capital Clause, arrange for part of a fee payable to a director under this article to be provided in the form of fully-paid shares in the capital of the Company. The amount of the fee payable in this way shall be at the discretion of the Board and shall be applied in the purchase or subscription of shares by the relevant director. In the case of a subscription of shares, the subscription price per share shall be deemed to be the closing middle-market quotation for a fully-paid share of the Company of that class as published in the Daily Official List of the London Stock Exchange (or such other quotation derived from such other source as the Board may deem appropriate) on the day of subscription.

176 (h) Directors’ interests Any Director having an interest in a transaction submitted for approval to the Board conflicting with that of the Company, shall advise the Board of such conflicting interest and cause a record of his statement to be included in the minutes of the meeting. Such Director may not take part in these deliberations. At the next following Shareholders’ meeting, before any other resolution is put to vote, a special report shall be made on any transactions in which any of the directors may have had an interest conflicting with that of the Company. The provisions of the preceding paragraph will not apply when the decisions of the Board of the Company or of the Director concern day-to-day operations engaged in normal conditions. (i) Indemnity of Directors To the fullest extent permitted by the Luxembourg Company Law and without prejudice to any indemnity to which he may otherwise be entitled, every person who is or was a Director shall be and shall be kept indemnified out of the assets of the Company against all costs, charges, losses and liabilities incurred by him in relation to the Company or its affairs. To the extent permitted by the Luxembourg Company Law, the Board may purchase and maintain insurance for the benefit of a person who is or was a Director or secretary of the Company indemnifying them and keeping them indemnified against liability which may lawfully be insured against by the Company. (j) Retirement by Rotation No person is incapable of being appointed as director by reason of his having reached the age of 70 or another age. 5.1.11 Methods of service Any notice, document or information to be sent or supplied by the Company may be sent or supplied (whether authorised or required to be sent or supplied by the Luxembourg Company Law or otherwise) in hard copy form, in writing, by fax, in electronic form or by means of publication on the Company’s website, (www.bandmretail.com), except where otherwise provided by the Luxembourg Company Law or any other applicable law.

5.2 The Articles allow for the proposed two-stage voting mechanism in respect of the election of independent directors as required under the Listing Rules. Firstly, the Shareholders must approve by ordinary resolution the independent director’s election. Secondly, the independent Shareholders must approve by ordinary resolution the election of that director. If either of the ordinary resolutions is defeated, the Company may propose a further ordinary resolution to elect or re-elect the proposed independent director. Any such further resolution must not be voted on within a period of 90 days of the date of the first vote but it may be passed by a vote of the Shareholders voting as a single class.

6. OVERVIEW OF CERTAIN PROVISIONS OF APPLICABLE LUXEMBOURG LAW The following is an overview of certain Luxembourg legal provisions applicable to the Company and/or its Shareholders. This does not purport to be a complete or comprehensive description of all of the legal considerations that may be relevant with respect to the Company or to any particular Shareholder, and does not purport to include legal considerations that arise from rules of general application or that are generally assumed to be known to the Shareholders. It is not intended to be, nor should it be construed to be, legal advice. This discussion is based on Luxembourg laws and regulations as they stand on the date of this document and is subject to any changes in law or regulations or changes in interpretation or application thereof that may take effect after such date.

6.1 Luxembourg Takeover Law, Transparency Law and Market Abuse Law provisions 6.1.1 Mandatory offer rules under the Luxembourg Takeover Law The EU Takeover Directive was transposed into Luxembourg law by a law of 19 May 2006 on takeovers (the “Luxembourg Takeover Law”). Pursuant to the Luxembourg Takeover Law,

177 where a person, as a result of his acquisition or the acquisition by persons acting in concert with such person, receives securities carrying voting rights which added to his own holdings and the holdings of the persons acting in concert with such person directly or indirectly gives such person a specified percentage of voting rights in a company (such as the Company) whose registered office is in Luxembourg with securities carrying voting rights admitted to trading on a regulated market as defined in the Markets in Financial Instruments Directive (a “Regulated Market”), giving control to this person over that company, this person is required to make a mandatory public offer to all the holders of those securities for all their holdings at an equitable price. For a company such as the Company whose registered office is in Luxembourg, the percentage of voting rights which confers control for the purposes of the Luxembourg Takeover Law is set at 33.33% of the voting rights in that company (excluding for the purposes of calculation the securities which only confer voting rights in particular circumstances). Immediately following Admission, CD&R Holdco will own 31.4% of the Shares, Simon Arora will own in aggregate, directly or indirectly, 14.0% of the Shares and Bobby Arora will own in aggregate, directly or indirectly, 14.0% of the Shares (29.0%, 13.5% and 13.5%, respectively, assuming full exercise of the Over-allotment Option). Following Admission, when CD&R Holdco, Simon Arora and Bobby Arora individually, or, if the CSSF determines that CD&R Holdco, Simon Arora and Bobby Arora, or some combination thereof, are acting in concert, hold 33.33% of the Shares, the above provisions of the Luxembourg Takeover Law will apply to CD&R Holdco, Simon Arora and Bobby Arora and any further acquisition(s) of Shares by such entities or individuals. 6.1.2 Shared jurisdiction of the CSSF in applying the Luxembourg Takeover Law and the UK Panel on Takeovers and Mergers applying the City Code on Takeovers and Mergers in the case of public takeover bids for the Company As the Company is incorporated under the laws of Luxembourg and has its registered office in Luxembourg, it is subject to the Luxembourg Takeover Law. However, as long as its Shares are not admitted to trading on any regulated market in Luxembourg and are only admitted to trading on the main market for listed securities of the London Stock Exchange, the UK Panel on Takeovers and Mergers applying the City Code on Takeovers and Mergers will be responsible for the supervision of any bid including matters relating to the consideration offered, the bid procedure, the contents of the offer document and the disclosure of a bid. However, in relation to, among other matters, employee information and company law matters (in particular the percentage of voting rights which confers control of the Company and any derogation from the obligation to launch a bid, as well as the conditions under which the board of the Company may undertake any action which might result in the frustration of the bid), the competent authority shall be the CSSF and the laws of Luxembourg shall apply as set forth in the Luxembourg Takeover Law. 6.1.3 Luxembourg squeeze-out proceedings under the Luxembourg Takeover Law The squeeze-out provisions of the Luxembourg Takeover Law, where applicable, provide that following a takeover bid made to all the holders of the offeree company's securities carrying voting rights for all of their securities carrying voting rights, an offeror may require all the holders of the remaining securities carrying voting rights to sell such offeror those securities at a fair price where the offeror holds securities carrying voting rights representing not less than 95% of the capital carrying voting rights and 95% of the voting rights in the offeree company. Where the offeree company has issued more than one class of securities carrying voting rights, the right of squeeze-out may be exercised only in the class in which the threshold laid down above has been reached. The right of squeeze-out must be exercised within three months of the end of the time allowed for acceptance of the bid. The CSSF will ensure that rules are in force that make it possible to calculate when the threshold referred to above is reached. The CSSF shall further ensure that a fair price is guaranteed. That price shall take the same form as the consideration offered in the takeover bid or shall be in cash. Cash must be offered as an alternative. Following a voluntary takeover bid, the consideration offered in the takeover bid shall be presumed to be fair as regards the relevant securities where, through acceptance of the takeover bid, the offeror has acquired securities carrying voting rights representing not less than 90% of the capital carrying voting rights

178 comprised in the bid. Following a mandatory takeover bid, the consideration offered in the bid shall be presumed to be fair as regards the securities carrying voting rights.

6.1.4 Luxembourg sell-out proceedings under the Luxembourg Takeover Law

The sell-out provisions of the Luxembourg Takeover Law, where applicable, provide that where an offeror, alone or together with persons acting in concert with it, hold(s) a total of more than 90% of an offeree company's voting rights as a result of a takeover bid made to all the holders of securities carrying voting rights of the offeree company for all of their securities carrying voting rights, any outstanding holder may exercise a sell-out right with respect to such holder's securities carrying voting rights of the offeree company and force the offeror to purchase its securities carrying voting rights at a fair price. Such right must be exercised no later than three months after the end of the period of acceptance of the takeover bid. The CSSF shall ensure that rules are in force that make it possible to calculate when the threshold referred to above is reached. The CSSF shall further ensure that a fair price is guaranteed. The price shall be determined in the same manner as the one described above in respect of the squeeze-out rules applicable under the Luxembourg Takeover Law.

6.1.5 Luxembourg Squeeze-out/Sell-out Law

In scenarios in which either no takeover bid pursuant to the Luxembourg Takeover Law has taken place or where a bid pursuant to the Luxembourg Takeover Law has taken place but where the exercise period for a squeeze-out or sell-out has lapsed for more than six months, the Luxembourg law of 21 July 2012 on squeeze-out and sell-out (the “Luxembourg Squeeze-out/Sell-out Law”) might be applicable. Pursuant to article 4 of the Luxembourg Squeeze-out/Sell-out Law, any majority Shareholder of the Company is entitled to squeeze out the minority shareholders (squeeze-out). In accordance with article 5 of the Luxembourg Squeeze-out/Sell-out Law any minority shareholder of the Company is allowed to require the majority Shareholder to buy his/her Shares (sell-out). Any majority shareholder within the meaning of article 1 of the Luxembourg Squeeze-out/Sell-out Law is any legal or natural person holding alone or together with persons acting in concert shares in the Company representing not less than 95% of the capital carrying voting rights and not less than 95% of the voting rights in the Company.

6.1.6 Luxembourg Transparency Law provisions

The EU Transparency Directive was transposed into Luxembourg law on 11 January 2008 by the Luxembourg Transparency Law and its implementing regulations.

Subject to the specific exemptions provided under the Luxembourg Transparency Law and its implementing regulations, a shareholder who acquires or disposes of shares of an issuer (such as the Company) whose shares are admitted to trading on a regulated market and for which Luxembourg is the home member state for the purposes of the Luxembourg Transparency Law, shall notify the issuer of the proportion of voting rights of the issuer it holds as a result of the acquisition or disposal where that proportion reaches, exceeds or falls below the thresholds of 5%, 10%, 15%, 20%, 25%, 33 1⁄3%, 50% and 66 2⁄3% (the “Important Participations Thresholds”).

The voting rights shall be calculated on the basis of all the shares to which voting rights are attached even if the exercise thereof is suspended. Moreover this information shall also be given in respect of all the shares which are of a same class and to which voting rights are attached.

A shareholder shall also notify the issuer of the proportion of voting rights, where that proportion reaches, exceeds or falls below the Important Participations Thresholds as a result of events changing the breakdown of voting rights, and on the basis of the information disclosed by the issuer in accordance with the requirements of the Luxembourg Transparency Law.

The notification requirements also apply to a natural person or legal entity to the extent it is entitled to acquire, to dispose of, or to exercise voting rights in any of the following cases or a combination of them: (a) voting rights held by a third party with whom that person or entity has concluded an agreement, which obliges them to adopt, by concerted exercise of the voting rights they hold, a lasting common policy towards the management of the issuer in question; (b) voting rights held by a third party under an agreement concluded with that person or entity providing for the temporary transfer for consideration of the voting rights in question; (c) voting

179 rights attaching to shares which are lodged as collateral with that person or entity, provided the person or entity controls the voting rights and declares its intention of exercising them; (d) voting rights attaching to shares in which that person or entity has the life interest; (e) voting rights which are held, or may be exercised within the meaning of points (a) to (d) above, by an undertaking controlled by that person or entity; (f) voting rights attaching to shares deposited with that person or entity which the person or entity can exercise at its discretion in the absence of specific instructions from the shareholders; (g) voting rights held by a third party in its own name on behalf of that person or entity; and (h) voting rights which that person or entity may exercise as a proxy where the person or entity can exercise the voting rights at its discretion in the absence of specific instructions from the shareholders. The Luxembourg Transparency Law and its implementing regulations further provide the timeframe, content and form upon which the notification relating to the Important Participations Thresholds must be made. 6.1.7 Luxembourg Market Abuse Law provisions Any dealings in or from Luxembourg in the Shares, and any other securities whose value is determined by the value of the Shares, are subject to the provisions of the law of 9 May 2006 on market abuse, as amended (the “Luxembourg Market Abuse Law”) which transposes into Luxembourg law the EU Market Abuse Directive. The Luxembourg Market Abuse Law provides for two main offences, namely insider dealing and market manipulation. In addition to the abovementioned market abuse prohibitions, the Luxembourg Market Abuse Law provides for certain disclosure requirements such as the obligation for the persons discharging managerial responsibilities within an issuer such as the Company who has its registered office in Luxembourg and persons closely associated with any such person to notify to the CSSF and the issuer, within five business days of each individual transaction, all transactions conducted on their own account relating to shares of such issuer (or derivatives or other financial instruments linked to them). Persons discharging managerial responsibilities include (i) any member of the administrative, management or supervisory bodies of the issuer, and (ii) any senior executive, who is not a member of the bodies as referred to in (i) above, having regular access to inside information relating, directly or indirectly, to the issuer, and the power to make managerial decisions affecting the future developments and business prospects of the issuer. Persons closely associated with a person discharging managerial responsibilities include (i) the spouse of the person discharging managerial responsibilities, or any partner of that person considered by national law as equivalent to the spouse, (ii) dependent children of the person discharging managerial responsibilities according to their national law, (iii) other relatives of the person discharging managerial responsibilities, who have shared the same household as that person for at least one year on the date of the transaction concerned, and (iv) any legal person, trust estate or other trust, or any association without legal personality, whose managerial responsibilities are discharged by a person discharging managerial responsibilities within the issuer or a closely associated person, or which is directly or indirectly controlled by such a person, or that is set up for the benefit of such a person, or whose economic interests are substantially equivalent to those of such person. The Luxembourg Market Abuse Law and its implementing regulations further provide the timeframe, content and form upon which the notification relating to the relevant transactions made by persons discharging managerial responsibilities within the issuer and persons closely associated with any such person must be made. This is a non-exhaustive list and there are other obligations and restrictions that may arise from the Luxembourg Market Abuse Law.

7. OTHER DIRECTORSHIPS 7.1 In addition to their directorships of the Company (in the case of the Directors), the Directors and the Senior Managers hold or have held the following directorships, other than of subsidiaries of the Company (in the case of the Directors), and/or are or were members of the following partnerships, within the past five years.

180 Current Previous Directorships/ Directors Directorships/Partnerships Partnerships Sir Terence (Terry) Patrick Leahy ..... Anatwine Limited Daily Wrap Produce Limited Asian Shopping Centres Limited Crazy Prices Eagle Eye Solutions Limited Kingsway Fresh Foods Limited Black Circles Holding Limited Tesco Stores Limited Spinney Consulting Limited Tesco PLC Metapack Limited Tesco Property Holdings Limited The Foundation Years Trust One stop Stores Limited The Social Mobility Foundation Spen Hill Properties (Holdings) Plc Starcount Pte Limited Spen Hill Properties (Southend) Limited Tesco Holdings Limited Comar Limited Stewarts Supermarkets Limited Beehythe Estates Limited T&S Stores Limited Adminstore Limited Country Market Limited (THE) Cullen’s Holdings Limited Cullen’s Stores Limited Europa Foods Limited Food & Wine Lovers Limited Harts The Grocer (Gloucester Road) Limited Harts The Grocers (Fulham Road) Limited Harts The Grocers (Russell Square) Limited Harts The Grocers (TCR) Limited Harts The Grocers Limited Kiwilight Limited La Boucherie Limited London and Home Counties Superstores Limited Salecastle Limited Speedhalt Limited Tesco Property Holdings (No.2) Limited Tesco Barbours Wood Limited Tesco Blue (Gp) Limited Tesco Capital No.2 Limited Tesco Fuchsia (Gp) Limited Tesco Grey (Gp) Limited Tesco Pink (Gp) Limited Tesco Purple (Gp) Limited Tesco Property Finance 1 Holdco Limited Tesco Violet (Gp) Limited Liverpool Vision Limited Tesco Indigo (Gp) Limited Tesco Atrato (Gp) Limited Tesco Passaic (Gp) Limited Tesco Passaic Pl Propco Limited Tesco Navona Pl Propco Limited Sundeep (Simon) Arora ...... Anglesource Limited Glyn Webb Wallpapers Limited Savannah Wisdom The Pavilions (Bowdon) Greenhill Cheshire Limited Management Company Limited Barvel Limited Paul Andrew McDonald ...... — TJHughes Limited ACLM Limited T J Hughes (Company Secretary) Limited

181 Current Previous Directorships/ Directors Directorships/Partnerships Partnerships T J Hughes (Holdings) Company Limited T J Hughes (Investments) Limited T J Hughes (Properties) Company Limited Thomas Martin Hübner ...... Carrefour S.A. LOBS.LED International Holding AG Citrus International AG Contract Farming India AG Ronald (Ron) Thomas McMillan ...... NBrown Group Plc PricewaterhouseCoopers LLP 888 Holdings Plc PricewaterhouseCoopers Middle East Limited Kathleen Rose Guion ...... ThePantry, Inc. Dollar General Corporation True Value Company Henricus (Harry) Brouwer ...... Unilever Deutschland GmbH — Unilever Österreich GmbH Unilever Schweiz GmbH David Andrew Novak ...... Clayton, Dubilier & Rice BCA Osprey II Limited Limited BCA Osprey IV Limited BCA Osprey I Limited BCA Remarketing Group Limited American School in London Rexel S.A. Educational Trust Limited Italtel S.p.A. CD&R LLP The Valerie Fund

Current Previous Directorships/ Senior Managers Directorships/Partnerships Partnerships Bobby Arora ...... Anglesource Limited Barvel Limited Savannah Wisdom Carl Brian Allen ...... — — Robert (Mike) Michael Benson ...... — — Allison Dawn Green ...... Country Sports Partnership — Network 7.2 7.2.1 Within the period of five years preceding the date of this document none of the Directors or Senior Managers: (a) has had any convictions in relation to fraudulent offences; (b) save as described in 7.2.2 below, has been a director or senior manager (who is relevant to establishing that a company has the appropriate expertise and experience for the management of that company) of any company at the time of any bankruptcy, receivership or liquidation of such company; or (c) has received any official public incrimination and/or sanction by any statutory or regulatory authorities (including designated professional bodies) or has been disqualified by a court from acting as a director of a company or from acting in the management or conduct of the affairs of a company. 7.2.2 Simon Arora was a director of Glyn Webb Wallpapers Ltd when an administrator was appointed on 23 November 2006, when the administration was moved to a creditors voluntary liquidation on 16 March 2007 and when the company was dissolved on 8 July 2011. Paul McDonald was a finance director at ACLM Ltd when an administrator was appointed on 15 April 2008, when the administration was moved to a creditors voluntary liquidation on 8 October 2009 and when the company was dissolved on 23 May 2012.

182 7.3 Save as set out below, none of the Directors or Senior Managers has any actual or potential conflicts of interests between their duties to the Company and their private interests or other duties. The Group's Chairman Sir Terry Leahy and Non-Executive Director David Novak each hold positions at CD&R, which manages each of the CD&R Investors. Immediately prior to Admission, the CD&R Investors, through CD&R Holdco, will collectively own 52.3% of the issued share capital of the Company. Immediately following Admission, it is expected that the CD&R Investors, through CD&R Holdco, will collectively own approximately 31.4% of the issued share capital of the Company, assuming no exercise of the Over-allotment Option, and 29.0% if the Over-allotment Option is exercised in full.

8. SHAREHOLDERS OF THE COMPANY The following table sets out details relating to the Shareholders of the Company: Immediately prior to Immediately following Immediately following Admission(9) Admission(10) Admission(11) %of %of %of voting voting voting rights in rights in rights in respect respect respect of issued of issued of issued ordinary ordinary ordinary Number of share Number of share Number of share Shares capital Shares capital Shares capital CD&R Holdco(1) ...... 508,218,709 52.3 313,643,643 31.4 290,119,172 29.0 Sundeep (Simon) Arora(2)/Bobby Arora(3)/ SSA Holdco(4) ...... 302,170,884 31.1 271,131,569 27.1 261,825,334 26.2 Robin Arora(5) ...... 89,181,514 9.2 4,596,713 0.5 — — Rani 1 Life Interest Trust(6) ...... 29,820,743 3.1 — — — — Rani 2 Life Interest Trust(7) ...... 29,820,743 3.1 — — — — Praxis Nominees Limited(8) ...... 13,009,629 1.3 10,628,075 1.1 8,055,494 0.8

(1) CD&R Holdco is the entity through which the CD&R Investors hold their interest in the Company. (2) Immediately prior to Admission, Simon Arora’s aggregate interest, held directly or indirectly, in the Company will comprise of 19.1%. This will consist of (1) his 2.1% direct interest, (2) his 3.1% indirect beneficial interest held through Rani 1 Life Interest Trust, (3) his 13.9% indirect interest held through SSA Holdco, and (4) his 0.1% indirect beneficial interest held indirectly through Praxis Nominees Limited through Rani 1 Life Interest Trust. Immediately following Admission, Simon Arora’s aggregate interest, held directly or indirectly, in the Company will comprise of 14.0%. This will consist of (1) his 0.5% direct interest and (2) his 13.5% indirect interest held through SSA Holdco. Immediately following Admission and assuming the Over-allotment Option is exercised in full, Simon Arora’s aggregate interest, held directly or indirectly, in the Company will comprise of 13.5%. This will consist of his 13.5% indirect interest held through SSA Holdco. (3) Immediately prior to Admission, Bobby Arora’s aggregate interest, held directly or indirectly, in the Company will comprise of 19.1%. This will consist of (1) his 2.1% direct interest, (2) his 3.1% indirect beneficial interest held through Rani 2 Life Interest Trust, and (3) his 13.9% indirect interest held through SSA Holdco, and (4) his 0.1% indirect beneficial interest held indirectly through Praxis Nominees Limited through Rani 2 Life Interest Trust. Immediately following Admission, Bobby Arora’s aggregate interest, held directly or indirectly, in the Company will comprise of 14.0%. This will consist of (1) his 0.5% direct interest, and (2) his 13.5% indirect interest held through SSA Holdco. Immediately following Admission and assuming the Over-allotment Option is exercised in full, Bobby Arora’s aggregate interest, held directly or indirectly, in the Company will comprise of 13.5%. This will consist of his 13.5% indirect interest held through SSA Holdco. (4) Immediately prior to Admission, Simon Arora and Bobby Arora will hold interests previously held directly by them through SSA Holdco and each will hold a 50% interest in SSA Holdco. Immediately prior to Admission, SSA Holdco will have (1) a 26.9% direct interest and (2) a 0.8% indirect interest held through Praxis Nominees Limited. Immediately following Admission, SSA Holdco will have (1) a 26.2% direct interest and (2) a 0.8% indirect interest held through Praxis Nominees Limited. Immediately following Admission and assuming the Over-allotment Option is exercised in full, SSA Holdco will have (1) a 26.2% direct interest and (2) a 0.8% indirect interest held through Praxis Nominees Limited. (5) Immediately prior to Admission, Robin Arora’s aggregate interest, held directly or indirectly, in the Company will comprise of 9.4%. This will consist of (1) his 9.2% direct interest and (2) his 0.3% indirect interest held through Praxis Nominees Limited. Immediately following Admission, Robin Arora’s interest, held directly or indirectly, in the Company will comprise of 0.7%. This will consist of (1) his 0.5% direct interest and (2) his 0.3% indirect interest held through Praxis Nominees Limited. Immediately following Admission and assuming the Over-allotment Option is exercised in full, Robin Arora’s aggregate interest, held directly or indirectly, in the Company will comprise of 0.0%. (6) Simon Arora and members of his family have indirect beneficial interests in Rani 1 Life Interest Trust. (7) Bobby Arora and members of his family have indirect beneficial interests in Rani 2 Life Interest Trust. (8) Immediately prior to Admission, Rani 1 Life Interest Trust, Rani 2 Life Interest Trust, SSA Holdco and Robin Arora will each hold Shares through Praxis Nominees Limited. See footnotes (2), (3), (4) and (5) above for more information. Immediately following Admission, SSA Holdco will hold Shares through Praxis Nominees Limited. See footnote (4) above for more information. (9) Assuming that the steps described in paragraph 4.3 of this Part 10: Additional Information have been completed in full. (10) Assuming no exercise of the Over-allotment Option. (11) Assuming the Over-allotment Option is exercised in full.

183 9. DIRECTORS' AND OTHER INTERESTS 9.1 The table below sets out the aggregate direct and indirect interests of the Directors and Senior Managers in respect of the share capital of the Company as at 11 June 2014 (being the latest practicable date prior to publication of this document) and immediately following Admission:

Immediately prior to Immediately following Admission(9) Admission(10) % of voting % of voting rights in rights in respect of respect of the issued the issued ordinary ordinary Number of share Number of share Shares capital Shares capital Directors Sir Terence (Terry) Patrick Leahy(1) ...... — — — — Sundeep (Simon) Arora(2) ...... 186,124,709 19.1 139,593,531 14.0 Paul Andrew McDonald ...... — — — — Thomas Martin Hübner(3) ...... — — 11,111 0.0 Ronald (Ron) Thomas McMillan(4) ...... — — 37,037 0.0 Kathleen Rose Guion(5) ...... — — 11,111 0.0 Henricus (Harry) Brouwer(6) ...... — — 18,518 0.0 David Andrew Novak(7) ...... — — — — Senior Managers Bobby Arora(8) ...... 186,124,709 19.1 139,593,532 14.0 Robert (Mike) Michael Benson ...... — — — — Allison Dawn Green ...... — — — — Carl Brian Allen ...... — — — —

(1) Sir Terry Leahy has an interest in the Shares held through CD&R Holdco as a result of his interest in CD&R Fund VIII. (2) Simon Arora's aggregate direct and interest in the Shares is described in more detail in paragraph 8 of this Part 10: Additional Information above. (3) Thomas Hübner has agreed to subscribe for Allocated Shares with a value of approximately £30,000 at the Offer Price pursuant to the Subscription. (4) Ron McMillan has agreed to subscribe for Allocated Shares with a value of approximately £100,000 at the Offer Price pursuant to the Subscription. (5) Kathleen Guion has agreed to subscribe for Allocated Shares with a value of approximately £30,000 at the Offer Price pursuant to the Subscription. (6) Harry Brouwer has agreed to subscribe for Allocated Shares with a value of approximately £50,000 at the Offer Price pursuant to the Subscription. (7) David Novak has an interest in the Shares held through CD&R Holdco as a result of his interest in CD&R Fund VIII. (8) Bobby Arora’s aggregate direct and interest in the Shares is described in more detail in paragraph 8 of this Part 10: Additional Information above. (9) Assuming the steps described in paragraph 4.3 of this Part 10: Additional Information have been completed in full. (10) Assuming no exercise of the Over-allotment Option. For information on interests if the Over-allotment Option were exercised in full, see paragraph 8 of this Part 10: Additional Information. 9.2 Save as set out in this paragraph 9 in this Part 10: Additional Information, following the Global Offer no Director or Senior Manager will have any interest in the share capital of the Company or any of its subsidiaries.

184 9.3 So far as the Company is aware, as at 11 June 2014 (being the latest practicable date prior to publication of this document) the following persons (other than the Directors and Senior Managers) hold in aggregate directly or indirectly 5% or more of the Company's voting rights (calculated exclusive of voting rights attached to treasury shares) or will do so immediately following Admission:

Immediately prior to Immediately following Admission(4) Admission(5) % of voting % of voting rights in rights in respect of respect of the issued the issued Number of share Number of share Name Shares capital Shares capital CD&R Holdco(1) ...... 508,218,709 52.3 313,643,643 31.4 SSA Holdco(2) ...... 269,880,828 27.8 269,880,828 27.0 Robin Arora(3) ...... 91,754,095 9.4 7,169,294 0.7

(1) CD&R Holdco is the entity through which the CD&R Investors hold their interest in the Company. (2) Immediately following Admission, Simon Arora and Bobby Arora will each hold a 50% interest in SSA Holdco. (3) Immediately prior to Admission, Robin Arora’s aggregate interest in the Company comprises (1) his direct 9.2% interest and (2) his 0.3% indirect interest held through Praxis Nominees Limited. Immediately following Admission, Robin Arora’s aggregate interest in the Company will comprise (1) his direct 0.5% interest and (2) his 0.3% indirect interest held through Praxis Nominees Limited. (4) Assuming the steps described in paragraph 4.3 of this Part 10: Additional Information have been completed in full. (5) Assuming no exercise of the Over-allotment Option. For information on interests if the Over-allotment Option were exercised in full, see paragraph 8 of this Part 10: Additional Information.

Save as set out in paragraph 8 and in this paragraph 9 in Part 10: Additional Information, the Company is not aware of any person who holds, or who will immediately following Admission hold, as shareholder (within the meaning of the Disclosure and Transparency Rules published by the FCA), directly or indirectly, 5% or more of the voting rights of the Company. Certain investors are expected to acquire interests of more than 5% of the Shares available in the Offer (assuming the Over-allotment Option is exercised in full) through one or more funds. 9.4 None of the Shareholders referred to in the table set forth in paragraph 9.3 above has voting rights which differ from those of any other Shareholder in respect of any Shares held by them. 9.5 Save as set out in paragraph 8 and in this paragraph 9 in Part 10: Additional Information, the Company is not aware of any person who immediately following Admission directly or indirectly, jointly or severally, will own sufficient shares to exercise control over the Company.

10. DIRECTORS’ SERVICE AGREEMENTS AND LETTERS OF APPOINTMENT 10.1 Executive Directors The two Executive Directors are each employed pursuant to service agreements with the Group. Certain terms of these service agreements set out below are conditional upon Admission:

Date of Notice period Notice period Director appointment Unexpired term (employer) (employee) Sundeep (Simon) Arora ...... 10December 2004 Indefinite term 12 months 12 months Paul Andrew McDonald ...... 14March 2011 Indefinite term 6 months 6 months

Simon Arora Simon Arora's service agreement is with the Company and can be terminated on 12 months’ written notice by either party. In addition, the Company can terminate the agreement without notice if a payment in lieu of basic salary is made. Simon Arora’s service agreement can be terminated with immediate effect if he: • is unable to perform his duties by reason of ill health or for any other reason for a period or periods aggregating 12 months in any period of 36 consecutive months; • in the reasonable opinion of the Board fails or neglects diligently to discharge his duties, or is guilty of any serious or repeated breach of his obligations under this agreement;

185 • is guilty of serious misconduct or dishonesty, or any other conduct which affects or in the reasonable opinion of the Board is likely to affect prejudicially the interests of the Company or its group companies or is convicted of an arrestable offence (other than a road traffic offence for which a non-custodial penalty is imposed); • becomes bankrupt or makes any arrangement or composition with his creditors; • is disqualified from being a director of any company; • resigns as a director without prior consent; or • ceases to be eligible to work in the UK. Simon Arora is entitled to receive the following payments and benefits under the terms of his service agreement: (i) base annual salary of £144,000 (50% of which is payable by the Company and 50% of which is payable by B&M European Value Retail 1); (ii) any pension contributions due to him in accordance with Part 1 of the Pensions Act 2008; (iii) a company car (together with normal servicing, insurance and running expenses); (iv) a staff discount card; (v) death in service insurance; (vi) six months’ sick pay in any 12 month period; (vii) 30 days' paid holiday per year (in addition to the usual public and bank holidays). The service agreement contains provisions restricting Simon Arora's use of confidential information during and after termination of employment and 12 month restrictive covenants covering non-compete, non-solicitation and non-dealing with customers, non-interference with suppliers/distributors and non-solicitation of employees. The duration of the restrictive covenants is reduced by any period he spends on garden leave.

Paul McDonald Paul McDonald’s service agreement can be terminated on six months’ written notice by either party. Paul McDonald’s service agreement can be terminated with immediate effect if: • in the reasonable opinion of the Company, he shall be guilty of any dishonesty, gross misconduct or wilful neglect of duty; • in the reasonable opinion of the Company, he shall be guilt of conduct likely to bring himself or the Company into disrepute providing always that if any such breach(es) by him are capable of remedy, he has failed to remedy the breach(es) within 30 days of receipt of written notice from the Company specifying the breach(es) and requiring him to remedy the same; • in the reasonable opinion of the Company, he shall have consistently failed to a serious extent to discharge his duties under his service agreement efficiently or diligently having failed to remedy such failure within 30 days of receipt of written notice specifying the failure and requiring him to remedy the same; • he is convicted of any indictable offence (excluding any offence under road traffic legislation in the UK or elsewhere for which he is not sentenced to any term of imprisonment whether immediate or suspended); or • he shall become of unsound mind or become a patient under the Mental Health Act 1983. Paul McDonald is entitled to receive the following payments and benefits under the terms of his service agreement: (i) base annual salary of £125,000; (ii) participation in the Company’s stakeholder pension scheme; (iii) a car allowance of £10,000; (iv) a staff discount card; (v) sick pay in accordance with the Company’s sick pay policy; (vi) 28 days’ paid holiday per year (inclusive of the usual public and bank holidays). The service agreement contains provisions restricting Paul McDonald's use of confidential information during and after termination of employment, a non-compete restrictive covenant during garden leave and a non- solicitation of employees restrictive covenant for 12 months post-termination. The Company recognises that, in light of its transition from a private company to a public company with a premium listing, the Remuneration Committee may wish to review the salary of the Finance Director following Admission to ensure it is comparable with the salary of persons in equivalent positions at public companies of a similar size. 10.2 Non-Executive Directors The Non-Executive Directors are all engaged on the same form of letter of appointment, save that neither Sir Terry Leahy nor David Novak is entitled to receive any of the fees payable to Non-Executive Directors (as set out in the table below). Both Sir Terry Leahy and David Novak have an interest in the Shares held through CD&R Holdco as a result of their interest in CD&R Fund VIII. The letter of appointment provides that the appointment took effect on 29 May 2014. The appointment is for a fixed term of three years expiring on 1 May 2017 and is terminable by either party giving the other three months’ notice. Upon ceasing to be a Director, the Non-Executive Directors are not entitled to receive any payments or benefits other than accrued fees for past services and reimbursement for any outstanding reasonably incurred expenses.

186 Non-Executive Directors’ fees comprise a basic fee and additional fees for the Senior Independent Director and committee chairs. The current fees are as follows:

Fee per annum (£) Basic ...... 50,000 Senior Independent Director ...... 15,000 Remuneration Committee Chair ...... 10,000 Audit Committee Chair ...... 10,000

10.3 Termination benefits Save as set out in this Part 10: Additional Information, there are no existing or proposed service agreements between any Director and any member of the Group providing for benefits upon termination of employment.

11. DIRECTORS’ AND SENIOR MANAGERS’ COMPENSATION For the year ended 29 March 2014, the aggregate total remuneration paid (including contingent or deferred compensation) and benefits in kind granted (under any description whatsoever) to each of the Directors and the Senior Managers by members of the Group was approximately £5 million and the aggregate total amount set aside as accrued by the Group to provide pension, retirement or other benefits to the Directors or the Senior Managers was approximately £0.14 million.

Amount set aside Amount set aside for pension, and benefits in retirement and Name kind granted other benefits (£) (£) Directors Sir Terence (Terry) Patrick Leahy ...... — — Sundeep (Simon) Arora ...... 866,865.49 247.68 Paul Andrew McDonald ...... 876,730.84 247.68 Thomas Martin Hübner ...... — — Ronald (Ron) Thomas McMillan ...... — — Kathleen Rose Guion ...... — — Henricus (Harry) Brouwer ...... — — David Andrew Novak ...... — — Senior Managers ...... 3,263,939.06 136,247.66

12. SHARE PLANS The Company has adopted three employee share plans to be used to incentivise and retain employees. Summaries of the plans are set out below.

12.1 Share Incentive Plan General The share incentive plan (“SIP”) is an all-employee UK Share Incentive Plan, which the Company intends to self-certify under the provisions of Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 (the “ITEPA”) in order to allow awards of Shares to be made on a tax-favoured basis on or after Admission. A summary of the principal terms of the SIP are set out below. The SIP is governed by the Company's rules of the SIP and administered by the Board or the Remuneration Committee.

Eligibility All UK resident tax-paying employees of the Company and its participating subsidiaries will be eligible to participate in the SIP. The SIP allows the Company to set a minimum qualifying period of service in order for an individual to be eligible to participate.

Types of Awards The Company may offer any combination of the features outlined below to allow eligible employees to obtain shares. Under the SIP, the Company can: (a) give up to £3,600 worth of free Shares in each tax year to an employee (“Free Shares”);

187 (b) offer an employee the opportunity of buying up to £1,800 of Shares a year (“Partnership Shares”); (c) give an employee up to two free matching Shares for each Partnership Share bought (“Matching Shares”); and (d) allow employees to purchase Shares (“Dividend Shares”) using dividends received on Free Shares, Partnership Shares and Matching Shares up to percentage limits set by the Company. The limits mentioned above may be increased to reflect any higher limit as is permitted under any future amendment to the share incentive plan legislation.

Free Shares Up to £3,600 worth of Free Shares can be awarded to each employee in a tax year. Free Shares must be awarded on similar terms, so that the number awarded to each employee is determined by standard criteria such as remuneration, length of service and number of hours worked. The award of Free Shares can, if the Company so chooses, be subject to the satisfaction of performance targets. There is a holding period of between three and five years during which the employee cannot withdraw the Free Shares from the SIP unless the employee leaves employment or there is a takeover of the Company. The Company can, at its discretion, provide that the Free Shares will be forfeited if the employee leaves employment within three years of the Free Shares being awarded, other than where employment ceases due to injury, disability, redundancy, the transfer of the employing business or company, retirement or death.

Partnership Shares The Company may allow an employee to use pre-tax salary to buy Partnership Shares. The maximum limit is the lower of £1,800 or 10% of salary in any tax year. The salary allocated to Partnership Shares can be accumulated for a period up to 12 months or Partnership Shares can be purchased monthly out of deductions from the employee's pay. Once acquired, Partnership Shares may be withdrawn from the SIP by the employee at any time.

Matching Shares The Company may offer Matching Shares free to an employee who has purchased Partnership Shares. If awarded, Matching Shares must be allocated on the same basis to all employees up to a maximum of two Matching Shares for every Partnership Share purchased. There is a holding period of between three and five years during which the employee cannot withdraw the Matching Shares from the SIP unless the employee leaves employment or there is a takeover of the Company. The Company can, at its discretion, provide that the Matching Shares will be forfeited if the associated Partnership Shares are withdrawn by the employee, or if the employee leaves employment within three years of the Matching Shares being awarded, other than where employment ceases due to injury, disability, redundancy, the transfer of the employing business or company, retirement or death.

Investment of Dividends into Dividend Shares The Company may allow an employee to reinvest dividends each tax year. Dividend Shares must be held in the SIP for three years, unless the employee leaves employment or there is a takeover of the Company.

SIP Trust The SIP is operated through a UK resident trust (“SIP Trust”). The SIP Trust buys or subscribes for shares that are subsequently awarded to employees. The money to buy shares will be provided either by the Company or, in the case of Partnership Shares, by the employees.

Termination of the SIP The Board may at any time suspend the operation of the SIP, but this will not affect the subsisting rights of participants. The Board may also terminate the SIP.

12.2 Company Share Option Plan General The company share option plan (“CSOP”) is a discretionary employee share plan, which the Company intends to self-certify under the provisions of Schedule 4 to ITEPA in order to allow options to acquire Shares (up to

188 £30,000 in value at grant) to be granted on a tax-favoured basis. The CSOP will also allow for larger non-tax efficient options to be granted on the same terms. Options are intended to granted on or after Admission. A summary of the principal terms of the CSOP are set out below.

The CSOP is governed by the Company’s rules of the CSOP and administered by the Board or Remuneration Committee.

Eligibility Any employed director or employee of the Company or the Group will be eligible to receive options under the CSOP. Options under the CSOP are not assignable or otherwise transferable.

Options Awards under the CSOP take the form of an option over Shares with a market value exercise price. Options will normally vest and become exercisable three years after grant.

Options may be satisfied by newly issued Shares, existing Shares purchased in the market, by transfer of Shares from an employee share trust or by the reissue of treasury Shares.

No options may be granted after the tenth anniversary of adoption of the CSOP.

Individual Limits on Options The maximum value of any tax efficient options that can be granted to any individual participant at any time (when aggregated with the value at grant of any other unexercised options granted pursuant to a CSOP held by that individual) is £30,000. The maximum value of any non-tax efficient options that can be granted to any individual participant in a financial year of the Company is £30,000. Both limits are measured by reference to the value of Shares at the date of grant.

Performance Targets

Options will only vest and become exercisable if and to the extent performance targets are met.

Exercise of options Subject to satisfaction of the performance targets, options will normally vest and become exercisable on the third anniversary of the date of grant. Options will then remain exercisable until the tenth anniversary of the date of their grant. The option will lapse if not exercised by the end of that period.

Earlier exercise is permitted if the participant dies or leaves employment as a consequence of injury, disability, redundancy, the transfer of the employing business or company, retirement, or any other reason at the discretion of the Remuneration Committee (“Good Leaver”). The extent to which options shall be exercisable by a Good Leaver will be determined by the Remuneration Committee taking into account the proportion of the vesting period that has elapsed and the extent to which the performance targets have been met at that time.

If an employee leaves employment before the end of the vesting period other than as a Good Leaver, his option will normally lapse.

Manner of Exercise Within 30 days of the receipt of a notice of exercise of an option, Shares in respect of which the option has been exercised must be issued by the Company or the Company must procure their transfer to the employee. The Shares will rank pari passu in all respects with the other fully paid Shares then in issue. Following the exercise of any option satisfied by newly issued Shares, the Company will apply to the relevant stock exchange for the relevant Shares to be listed and admitted to trading.

Takeovers If any company obtains control of the Company as a result of a takeover offer or the sanctioning of a scheme of arrangement or if a company has become bound or entitled to acquire all Shares, all outstanding options shall vest to the extent determined by the Remuneration Committee taking into account the proportion of the vesting period that has elapsed and the extent to which the performance targets have been met at that time.

189 Where an offer is made to obtain control of the Company which the Board believes will result in a takeover, it may, at its absolute discretion, resolve that options will vest to the extent determined by the Remuneration Committee taking into account the proportion of the vesting period that has elapsed and the extent to which the performance targets have been met at that time.

Exchange of Options on a Change of Control If any company obtains control of the Company as a result of a takeover offer or the sanctioning of a scheme of arrangement or if a company has become bound or entitled to acquire all Shares, an option holder may, by agreement with that other company, seek the release of his options in return for the grant of equivalent options over shares in that other company

Variation of Share Capital In the event of any variation of the Company’s capital by way of capitalisation or rights issue, or consolidation, subdivision or reduction, the number of Shares subject to the option and/or the exercise price may be adjusted in such a manner as the Remuneration Committee considers appropriate provided that the aggregate market value of the shares acquired and the exercise price payable to exercise the option is not substantially changed, and that the exercise price shall not be reduced to below the nominal value of a Share unless the Company is authorised to capitalise reserves to pay up each Share allotted to option holders.

Tax Liability on Exercise The CSOP permits the Company or any group company to withhold or collect from participants a sum equal to the income tax and employee social security contributions for which the Company or any group company must account under the pay-as-you-earn (“PAYE”) tax withholding system. The CSOP also permits the Company or Group Company to transfer any employer social security contributions to the participants.

12.3 Executive Long-Term Incentive Plan General The proposed LTIP is a discretionary employee share scheme, pursuant to which the Board or Remuneration Committee may make awards to certain employees of any Group Company. The LTIP is intended to be used for awards to Executive Directors and Senior Management on or after Admission. A summary of the principal terms of the LTIP are set out below.

The LTIP is governed by the Company's rules of the LTIP and administered by the Board or Remuneration Committee.

Eligibility Any employed director or employee of the Company or Group will be eligible to receive awards under the LTIP. The Board intends that only Executive Directors and senior management will receive awards under the LTIP. Awards under the LTIP are not assignable or otherwise transferable, except on the death of the holder.

Awards Awards under the LTIP take the form of rights to acquire Shares for no consideration on vesting of the award. Awards will vest three years after grant if stretching performance targets are met.

Awards may be satisfied by newly issued Shares, existing shares purchased in the market, by transfer of Shares from an employee share trust or by the reissue of treasury Shares.

No awards may be made after the tenth anniversary of adoption of the LTIP.

Individual Limits on Awards The maximum value of the award that can be made to any individual participant in any financial year of the Company is normally one times salary for that financial year, but if the Remuneration Committee considers that exceptional circumstances exist, the award may be two times salary for that financial year. In each case the value of the award is measured by reference to the value of the Shares at the date of grant.

190 Performance Targets Awards will only vest if performance targets have been met during a three year performance period. The current intention is for awards to Executive Directors to be subject to performance targets relating to growth in total shareholder return (being the change in value of a notional investment in a Share over the performance period, taking account of share price movement and the value of dividends which are deemed to be reinvested) of at least 15% over the three year period and growth in EBITDA of at least 30% over the three year period.

Vesting /lapse of awards Awards will vest on the third anniversary of the date of grant to the extent performance targets are met provided that the participant remains employed by a Group Company at the date of vesting and has not given or been given notice to terminate that employment.

Unvested awards will lapse on cessation of employment for any reason during the vesting period unless the Remuneration Committee exercises its discretion to permit awards to vest in whole or in part.

Shares issued or transferred to participants on vesting of an award rank equally with the other issued Shares, except that they do not rank for any dividend or other right having a record date prior to the date of allotment.

The awards will also lapse if during the three year vesting period the Board or Remuneration Committee determines that there has been (i) a material misstatement of the Company's audited results, (ii) a material failure of risk management by any Group Company or a relevant business unit, or (iii) serious reputational damage to the any Group Company or a relevant business unit as a result of the participant's misconduct or otherwise.

Takeovers If any company obtains control of the Company as a result of a takeover offer or the sanctioning of a scheme of arrangement or if a company has become bound or entitled to acquire all Shares on a compulsory basis, all outstanding awards shall vest to the extent determined by the Remuneration Committee taking account of the proportion of the vesting period that has elapsed and the extent to which performance targets have been met at that time.

Where an offer is made to control the Company which the Board believes will result in a takeover, it may, at its absolute discretion, resolve that awards will vest to the extent determined by the Remuneration Committee taking account of the proportion of the vesting period that has elapsed and the extent to which performance targets have been met at that time.

Variation of Share Capital In the event of any variation of the Company's capital, the number of Shares subject to the award shall be adjusted in such a manner as the Board considers appropriate.

Tax Liability on Vesting The LTIP permits any Group Company to withhold or collect from participants a sum equal to the income tax and employee social security contributions for which the Group Company must account under the PAYE tax withholding system. The LTIP also permits any Group Company to transfer any employer social security contributions to the participants.

12.4 Provisions Common to SIP, CSOP and LTIP Timing of awards The following awards: • Free Shares under the SIP • Options under the CSOP • Awards under the LTIP can only be made during the period of 42 days following (i) the date of Admission, (ii) the date on which the relevant plan is adopted, (iii) the announcement of the Company's final or interim results for any financial period, (iv) any day on which the Board or Remuneration Committee resolves that exceptional circumstances exist that justify the making of awards or granting of options or (v) the day on which the employee starts employment with the Company or participating subsidiary. If any of the above periods is a close period then awards may be made within 42 days of the end of such close period.

191 Limits on issue of shares The SIP, CSOP and LTIP contain a limit on the number of new Shares to be issued pursuant to the plans. This dilution limit is that no more than 10% of the issued ordinary share capital of the Company, from time to time, should be issued or issuable under all share incentive schemes operated by the Group in any rolling 10 year period commencing on the date of Admission.

This limit applies to awards made or options granted under all employee share schemes operated by the Group, including the SIP, CSOP and LTIP. Options and awards which have lapsed or been renounced are disregarded. Shares which have been purchased in the market are disregarded.

Benefits non-pensionable Any award under the SIP, CSOP and LTIP is not pensionable.

Amendments The Company may from time to time amend the rules of the SIP, CSOP and LTIP provided that: (a) no amendment shall adversely affect to a material extent existing awards (in the case of the LTIP and CSOP without the consent of at least 75% of participants); and (b) the prior approval of the Company in general meeting is obtained for amendments made for the benefit of participants to the provisions relating to: (i) the persons to whom an award may be made; (ii) the limit on the aggregate number of shares over which awards may be made; (iii) the limit on the number of shares over which awards may be made to an employee; (iv) the basis of determining an employee's entitlement to and the terms of shares; and (v) the adjustment of awards on a variation of share capital of the Company,

(save for minor amendments to benefit the administration of the plan, to take account of changes in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for the participants or for the Company or its subsidiaries).

In the case of the CSOP and SIP, no amendment shall be made to a key feature of the plan without HMRC consent if required (this requirement is removed from Royal Assent of Finance Act 2014, with effect from 6 April 2014).

12.5 Employee Share Trust The Company intends to settle an employee share trust (the “Trust”) which will be an employee share scheme and can be used to satisfy awards under the LTIP.

The Trust will be resident outside the UK and administered by the trustee (which will be a professional trust company). The Trust will be a discretionary trust whose beneficiaries are the employees and Executive Directors (and former employees and executive directors) of the Company and its group, and their spouses, civil partners, widows, widowers, children and step-children under the age of 18.

The Trust has the power (inter alia) to acquire shares in any Group Company, grant options over shares to beneficiaries, transfer shares to beneficiaries by gift or otherwise and make grants or loans to beneficiaries to enable them to acquire shares. However, the Trust will not be able to hold more than 5% of the issued ordinary share capital of the Company at any time when it is listed, unless authorised to do so by the Company in general meeting.

The Trust will be funded by contributions or loans from the Company or the Group.

The Trust will waive its right to dividends and to vote in respect of any Shares held in the Trust unless otherwise requested by the Company.

13. SUBSIDIARIES 13.1 The Company has, since its date of incorporation, been the holding company of the Group.

192 13.2 The Company has the following significant subsidiary undertakings, each of which is wholly-owned, either directly or indirectly, by the Company and is consolidated or combined with the Historical Financial Information and will be consolidated into the annual financial statements of the Company:

% of shares Country of and voting Name Principal activity Registered office incorporation rights held B&M European Value Holding company 5, rue Guillaume Kroll, Luxembourg 100% Retail 1 S.à r.l. L-1882, Luxembourg B&M European Value Holding company The Vault, Dakota Drive United Kingdom 100% Retail Holdco 1 Limited Estuary Commerce Park, Speke, Liverpool, L24 8RJ B&M European Value Holding company The Vault, Dakota Drive United Kingdom 100% Retail Holdco 2 Limited Estuary Commerce Park, Speke, Liverpool, L24 8RJ B&M European Value Holding company The Vault, Dakota Drive United Kingdom 100% Retail Holdco 3 Limited Estuary Commerce Park, Speke, Liverpool, L24 8RJ B&M European Value Holding company The Vault, Dakota Drive United Kingdom 100% Retail Holdco 4 Limited Estuary Commerce Park, Speke, Liverpool, L24 8RJ B&M European Value Holding company 16, Avenue Pasteur, Luxembourg 100% Retail 2 S.à r.l. L-2310 Luxembourg Firesource Limited Holding company The Vault, Dakota Drive United Kingdom 100% Estuary Commerce Park, Speke, Liverpool, L24 8RJ Meltore Limited Dormant The Vault, Dakota Drive United Kingdom 100% company Estuary Commerce Park, Speke, Liverpool, L24 8RJ B&M Retail Limited Operating The Vault, Dakota Drive United Kingdom 100% company Estuary Commerce Park, Speke, Liverpool, L24 8RJ Opus Homewares Limited Dormant The Vault, Dakota Drive United Kingdom 100% company Estuary Commerce Park, Speke, Liverpool, L24 8RJ

13.3 The Company has the following associates, each of which is partially owned, either directly or indirectly by the Company: % of shares Country of and voting Name Principal activity Registered office incorporation rights held Homefocus Group Limited Operating company Parkgate House, Parkgate Ireland 40% Street, Dublin 8, Ireland Multi-Lines International Operating company Room 1008, 10/F., Hong Kong 50% Company Limited Fook Hong Industrial Building, 19 Sheung Yuet Road, Kowloon Bay, Kowloon, Hong Kong Taizhou Linch Electrical Dormant company Room 1008, 10/F., Hong Kong 50% Industrial Limited Fook Hong Industrial Building, 19 Sheung Yuet Road, Kowloon Bay, Kowloon, Hong Kong

193 14. TAXATION 14.1 United Kingdom Taxation The following statements are intended only as a general guide to certain UK tax considerations and do not purport to be a complete analysis of all potential UK tax consequences of holding Shares. They are based on current UK legislation the current published practice of HMRC as at the date of this document, both of which may change, possibly with retroactive effect. They apply only to Shareholders who are resident and, in the case of individuals, domiciled, for tax purposes in (and only in) the UK (except insofar as express reference is made to the treatment of non-UK residents), who hold their Shares as an investment (other than under an individual savings account) and who are the absolute beneficial owners of both the Shares and any dividends paid on them.

The tax position of certain categories of Shareholders who are subject to special rules (such as persons acquiring their Shares in connection with employment, dealers in securities, insurance companies and collective investment schemes) is not considered. The tax position of Shareholders who hold 10% or more of the issued share capital of the Company is also not considered.

Except in the case of the comments made in relation to stamp duty and SDRT, references in the statements below to Shares and Shareholders shall be taken to include references to DIs and holders of Dis.

Prospective investors who are in any doubt as to their tax position or who may be subject to tax in a jurisdiction other than the UK are strongly recommended to consult their own professional advisers.

14.1.1 Taxation of Dividends (a) UK withholding tax The Company is not required to withhold United Kingdom tax when paying a dividend (although note the comments in paragraph 14.3.2 of this Part 10: Additional Information concerning Luxembourg withholding tax on dividends). Liability to tax on dividends will depend upon the individual circumstances of a Shareholder.

(b) Credit for Luxembourg withholding tax Shareholders’ attention is drawn to the statement regarding Luxembourg withholding tax on dividends which are contained in paragraph 14.3.2 of this Part 10: Additional Information.Ifa Shareholder receives a dividend on Shares and the dividend is paid subject to Luxembourg withholding tax, credit for such Luxembourg withholding tax may be available for set-off against a liability to UK corporation tax or UK income tax on the dividend. The amount of such credit will normally be equal to the lesser of the amount withheld and the liability to UK tax on the dividend. Such credit will not normally be available for set-off against a Shareholder's liability to UK tax other than on the dividend and, to the extent that such credit is not set-off against UK tax on the dividend, the credit will be lost. Credit will not be available to the extent that the Luxembourg withholding tax can be minimized or repaid by taking reasonable steps under a double tax treaty or a provision of Luxembourg law (in which regard see sections 14.1.2(a) and 14.3.2 of this Part 10: Additional Information).

(d) UK resident individual shareholders An individual Shareholder who receives a dividend from the Company will generally be entitled to a tax credit equal to one-ninth of the amount of the dividend (before deduction of Luxembourg withholding tax (if any)), which is equivalent to 10% of the aggregate of the dividend and the tax credit (the “gross dividend”), and will be subject to income tax on the gross dividend. An individual Shareholder who is subject to income tax at a rate or rates not exceeding the basic rate will be liable to tax on the gross dividend at the rate of 10%, so that the tax credit will satisfy the income tax liability of such a Shareholder in full. Where the tax credit exceeds the Shareholder's tax liability the Shareholder cannot claim repayment of the tax credit from HMRC. An individual Shareholder who is subject to income tax at the higher rate will be liable to income tax on the gross dividend at the rate of 32.5% to the extent that such sum, when treated as the top slice of that Shareholder’s income, exceeds the threshold for higher rate income tax but does not exceed the threshold for additional rate income tax. The 10% tax credit may be set-off against part

194 of his liability. This will have the effect that the Shareholder will have to account for tax equal to 22.5% of the gross dividend or 25% of the dividend (gross of any Luxembourg withholding tax), to the extent that the gross dividend falls within the thresholds for taxation at the higher rate when treated as the top slice of that Shareholder's income (subject to credit for Luxembourg withholding tax (if any) which, as discussed above, may be available for set-off against a liability to UK income tax on the dividend). If and to the extent the gross dividend is received by an individual Shareholder who is subject to income tax at the additional rate, that individual will be liable to income tax on the gross dividend at the rate of 37.5%, to the extent that such sum, when treated as the top slice of that Shareholder's income exceeds the threshold for additional rate income tax. In the same way as in relation to a Shareholder who is subject to income tax at the higher rate, the 10% tax credit may be set-off against part of his liability. This will have the effect that the Shareholder will have to account for tax equal to 27.5% of the gross dividend, or approximately 30.6% of the dividend (gross of any Luxembourg withholding tax), to the extent that the gross dividend exceeds the threshold for taxation at the additional rate when treated as the top slice of that Shareholder's income (subject to credit for Luxembourg withholding tax (if any) which, as discussed above, may be available for set- off against a liability to UK income tax on the dividend).

(e) UK resident corporate Shareholders It is likely that most dividends paid on the Shares to corporate Shareholders (other than such Shareholders which are “small companies”, as that phrase is defined at section 931S Corporation Tax Act 2009) would fall within one or more of the classes of dividend qualifying for exemption from corporation tax. However, it should be noted that the exemptions are not comprehensive and are also subject to anti-avoidance rules. Corporate Shareholders which are small companies will not benefit from exemption from corporation tax on dividends received from the Company and, accordingly, will be subject to corporation tax on such dividends. Shareholders within the charge to corporation tax should consult their own professional advisers.

(f) UK resident exempt Shareholders UK resident Shareholders who are not liable to UK tax on dividends, including pension funds and charities, are not entitled to claim repayment of the tax credit.

14.1.2 Taxation of disposals A disposal or deemed disposal of Shares by a Shareholder who is resident in the UK for tax purposes in the tax year (or part thereof) in question may give rise to a chargeable gain or an allowable loss for the purposes of UK taxation of capital gains. This will depend upon the Shareholder's circumstances and is subject to any available exemption or relief (such as the annual exempt amount for individuals and indexation for corporate Shareholders).

Shareholders who are not resident in the UK as outlined above will not generally be subject to UK taxation of capital gains on the disposal or deemed disposal of Shares unless they are carrying on a trade, profession or vocation in the UK through a branch or agency (or, in the case of a corporate Shareholder, a permanent establishment) in connection with which the Shares are used, held or acquired.

An individual Shareholder who acquires Shares while UK resident, ceases to be resident for tax purposes in the UK for a period of five years or less and disposes of all or part of his Shares during that period may be liable to capital gains tax on his return to the UK, subject to any available exemptions or reliefs.

If an individual Shareholder who is subject to income tax at the higher or additional rate becomes liable to UK capital gains tax on the disposal of Shares, the applicable rate of capital gains tax will be 28% Other individual Shareholders may only be liable to any such capital gains tax at a rate of 18%

14.1.3 Stamp duty and SDRT The following comments do not relate to persons such as market makers, brokers, dealers, intermediaries, persons connected with depository receipt arrangements or clearance services or persons who enter into sale and repurchase transactions in respect of the Shares or the DIs, to whom special rules apply.

195 The issue of Shares or DIs should not give rise to a liability to UK stamp duty or SDRT.

The transfer on sale of Shares could give rise to a liability to UK stamp duty at the rate of 0.5% of the amount or value of the consideration given for the sale. However, assuming that no document effecting a transfer of, or containing an agreement to transfer, Shares is either (i) executed in the UK or (ii) relates to any property situated, or to any matter or thing done or to be done, in the UK (the term “matter or thing” is very wide and may include the involvement of UK bank accounts in payment mechanics), then no UK stamp duty should be payable on such a document.

No UK stamp duty will be payable on a transfer of DIs, provided that the transfer is effected electronically within the CREST system and no written instrument of transfer is executed.

On the assumption that the Shares are not registered in a register kept in the UK and the Shares will not be paired with shares issued by a body corporate incorporated in the UK, no SDRT should be payable in respect of any agreement to transfer the Shares.

The charge to SDRT, generally at the rate of 0.5% of consideration, should not arise on agreements to transfer the DIs on the basis that an exemption will apply, given that the Shares will be listed on the London Stock Exchange and on the assumption that no register of the Shares will be kept in the UK by or on behalf of the Company and central management and control of the Company will not be exercised in the UK.

Prospective purchasers of Shares should consult their own tax advisers with respect to the tax consequences to them of acquiring, holding and disposing of Shares.

14.2 United States Taxation The discussion of U.S. tax matters set forth in this document was written in connection with the promotion or marketing of the Global Offer and was not intended or written to be used, and cannot be used, by any person, for the purpose of avoiding tax-related penalties under U.S. federal, state or local tax law. Each taxpayer should seek advice based on its particular circumstances from an independent tax adviser.

The following summary is a general discussion of certain U.S. federal income tax considerations to U.S. Holders (defined below) of acquiring, holding and disposing of Shares. The following summary applies only to U.S. Holders that purchase Shares in the Global Offer and will hold Shares as capital assets for U.S. federal income tax purposes (generally, assets held for investment). The following summary is not a complete analysis of all U.S. federal income tax consequences that may be relevant to a prospective U.S. Holder’s decision to acquire, hold or dispose of Shares, including, in particular, U.S. federal income tax considerations relevant to prospective U.S. Holders subject to special tax rules, including, among others, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, dealers or traders in securities or currencies, tax- exempt entities, U.S. Holders that will hold Shares as part of an “integrated”, “hedging” or “conversion” transaction or as a position in a “straddle” for U.S. federal income tax purposes, grantor trusts, US Holders that have a “functional currency” other than the U.S. dollar, U.S. Holders that will own (directly or by attribution) 10% or more of the Company's voting stock and certain U.S. expatriates or U.S. Holders subject to the alternative minimum tax.

This summary does not discuss the tax consequences of the purchase, ownership or disposition of Shares under the tax laws of any state, locality or non-U.S. jurisdiction or the Medicare Tax on net investment income.

The following summary is based on the U.S. Internal Revenue Code of 1986, as amended (the “Code”), the U.S. Treasury regulations thereunder, published rulings of the U.S. Internal Revenue Service (the “IRS”) and judicial and administrative interpretations thereof, in each case as in effect and available on the date of this document. Changes to any of the foregoing, or changes in how any of these authorities are interpreted, may affect the tax consequences set out below, possibly retroactively. No ruling will be sought from the IRS with respect to any statement or conclusion in this discussion, and no assurances can be given that the IRS will not challenge such statement or conclusion in the following discussion or, if challenged, a court will uphold such statement or conclusion.

For purposes of the following summary, a “U.S. Holder” is a beneficial owner of Shares that is for U.S. federal income tax purposes: (i) a citizen or resident alien of the United States, (ii) a corporation or other entity treated as

196 a corporation for U.S. federal income tax purposes created or organised in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of its source or (iv) a trust if (x) a court within the United States is able to exercise primary supervision over its administration and (y) one or more United States persons (as defined in the Code) have the authority to control all of the substantial decisions of such trust.

If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) holds Shares, the U.S. federal income tax consequences to the partners of such partnership will depend on the activities of the partnership and the status of the partners. A partnership considering an investment in Shares, and partners in such partnership, should consult their own tax advisers about the consequences of the investment.

The Company does not expect to be classified as a passive foreign investment company (a “PFIC”) for U.S. federal income tax purposes and paragraphs 14.2.1 and 14.2.2 assume this to be the case. If the Company were a PFIC in any year a U.S. Holder were to own Shares, certain adverse consequences discussed in paragraph 14.2.3 below could occur.

Prospective purchasers of Shares should consult their own tax advisors with respect to the U.S. federal, state, local and non-U.S. tax consequences to them in their particular circumstances of acquiring, holding and disposing of Shares.

14.2.1 Distributions by the Company In general, the gross amount of any distribution by the Company with respect to Shares (including amounts withheld in respect of Luxembourg taxes on the distribution) will be includible in a U.S. Holder’s foreign source ordinary income as a dividend to the extent of the Company’s current and accumulated earnings and profits (as determined under U.S. federal income tax principles) at the time the U.S. Holder receives such amount in accordance with the U.S. Holder’s usual method of accounting for U.S. federal income tax purposes. Any distribution in excess of the Company’s current and accumulated earnings and profits will be treated first as a tax-free return of capital to the extent of a U.S. Holder’s adjusted tax basis and thereafter as capital gain. The Company does not maintain calculations of its earnings and profits under U.S. federal income tax principles. U.S. Holders should therefore expect that a distribution by the Company with respect to Shares will constitute ordinary dividend income. U.S. Holders should consult their own tax advisers with respect to the appropriate treatment of any distribution received from us for U.S. federal income tax purposes. Dividends received by corporations will not be eligible for the dividends received deduction. Subject to applicable limitations, dividends paid to certain non-corporate U.S. Holders, including individuals, are expected to be taxable at the reduced rates applicable to long-term capital gain. Dividends on a Share will be treated as foreign source income for U.S. foreign tax credit purposes. Subject to applicable limitations that may vary depending upon a U.S. Holder’s circumstances, Luxembourg taxes withheld, if any, from distributions on Shares will generally be creditable against a U.S. Holder’s federal income tax liability at the applicable tax rate as determined by reference to Luxembourg tax law, subject to any applicable reduction under the Luxembourg-United States tax treaty (the “Treaty”). Alternatively, a U.S. Holder may deduct these taxes, provided that the U.S. Holder is claiming a deduction instead of a credit for all foreign taxes paid or accrued in that taxable year. The rules governing foreign tax credits are complex and, therefore, a U.S. Holder should consult its own tax adviser regarding the availability of the foreign tax credit based on the U.S. Holder’s particular circumstances. U.S. Holders should consult their tax advisers regarding the proper tax treatment of distributions received in a currency other than the U.S. dollar

14.2.2 Proceeds from the Sale or Exchange of the Shares Upon the sale or exchange of a Share, a U.S. Holder will generally recognise U.S. source capital gain or loss equal to the difference, if any, between the U.S. dollar amount realised on the sale or exchange and the U.S. Holder’s tax basis in the Share. The U.S. Holder’s tax basis will generally be the U.S. dollar value of the amount paid for the Share. Any gain or loss generally will be long-term capital gain or loss if the Shares have been held for more than a year. Such gain or loss will generally be U.S. source gain or loss. In the case of a non-corporate U.S. Holder that has held the Share for more than one year, long-term capital gain generally is subject to lower rates of tax. The deductibility of capital losses is subject to limitations.

197 If any Luxembourg tax is imposed on the sale or other taxable disposition of Shares, a U.S. Holder’s amount realised will include the gross amount of the proceeds of the sale or other taxable disposition determined without regard to any Luxembourg tax. See paragraph 14.3.2 of Part 10: Additional Information for a description of when a disposition may be subject to Luxembourg taxation. If a U.S. Holder is not eligible for an exemption from such tax under the Treaty, subject to applicable limitations, such taxes may be creditable against a U.S. Holder’s federal income tax liability at the appropriate rate. Because a U.S. Holder’s gain from the sale or other taxable disposition of Shares generally will be U.S.- source gain, and foreign tax credits generally can only be used to offset foreign source income, a U.S. Holder generally will be unable to claim a foreign tax credit with respect to Luxembourg tax on gains from the sale of Shares unless the US Holders separately has foreign source income in the correct category that can be offset by the credits. Alternatively, a U.S. Holder may deduct Luxembourg tax on gains, provided that the U.S. Holder is claiming a deduction instead of a credit for all foreign taxes paid or accrued in that taxable year. The rules governing foreign tax credits are complex and, therefore, a U.S. Holder should consult its own tax adviser regarding the availability of the foreign tax credit based on the US Holder’s particular circumstances. U.S. Holders should consult their tax advisors regarding the proper tax treatment of payments made or received in a currency other than the US dollar.

14.2.3 Passive Foreign Investment Company Based on the information currently available, the Company does not expect to be classified as a PFIC. However, because PFIC status depends upon the composition of a company’s income and assets and the market value of its assets from time to time, the Company cannot assure prospective investors that it will not be considered a PFIC for any taxable year. In general, a non-U.S. corporation will be classified as a PFIC if in any taxable year either (i) 75% or more of its gross income consists of passive income (e.g., dividends, interest and certain rents and royalties) or (ii) 50% or more of its assets, by value, determined on the basis of a quarterly average, consists of assets that produce, or are held for the production of, passive income. If the Company were classified as a PFIC, for any year during a U.S. Holder could be subject to significantly greater amounts of U.S. tax than would otherwise apply with respect to (i) any gain on the sale or exchange of Shares or (ii) certain dividends, in each case, even if the Company were no longer classified as a PFIC in a subsequent year. In addition, if the Company is classified as a PFIC, in the year a distribution is paid or the prior year, U.S. Holders would not be eligible for the reduced rates of taxation discussed above in paragraph 14.2.1. U.S. Holders would also be subject to additional U.S. tax reporting obligations. U.S. Holders should consult their tax advisors concerning the consequences if the Company is classified as a PFIC.

14.2.4 Backup Withholding and Information Reporting Requirements U.S. federal backup withholding and information reporting requirements may apply to certain payments of dividends on, and proceeds from the sale, taxable exchange or redemption of, Shares held by U.S. Holders. A portion of any such payment may be withheld as a backup withholding against such U.S. Holder’s potential U.S. federal income tax liability if such U.S. Holder fails to establish it is exempt from these rules, furnish its correct taxpayer identification number or otherwise fails to comply with such information reporting requirements. Corporate U.S. Holders are generally exempt from the backup withholding and information requirements, but may be required to comply with certification and identification requirements in order to prove their exemption. Any amounts withheld under the backup withholdings rules from a payment to a U.S. Holder will be credited against such U.S. Holder's federal income tax liability, if any, or refunded if the amount withheld exceeds such tax liability provided the required information is furnished to the IRS in a timely manner. U.S. Holders should consult their tax advisers regarding any tax reporting or filing obligations they may have as a result of acquiring, holding or disposing of Shares. Failure to comply with certain reporting obligations could result in the imposition of substantial penalties. The above summary is not intended to constitute a complete analysis of all U.S. federal income tax consequences to a U.S. Holder of acquiring, holding and disposing of Shares. Each U.S. Holder should consult its own tax adviser with respect to the U.S. federal, state, local and non-U.S. consequences of acquiring, holding and disposing of Shares.

198 14.3 Luxembourg Taxation The following contains a general description of certain key tax principles that may be relevant with respect to the subscription, acquisition, holding, or transfer of Shares. It does not purport to be a comprehensive or exhaustive description of all tax considerations that may be relevant to Shareholders. This summary is based upon domestic tax laws and regulations of Luxembourg in effect at the time of preparation of this document and the provisions of typical double taxation treaties currently in force concluded by Luxembourg. It is important to note that the legal situation may change, possibly with retroactive effect. The following is intended only as a general and non-exhaustive guide and is not intended to be, nor should it be considered to be, legal or tax advice to any particular Luxembourg holder. Accordingly, potential investors should satisfy themselves as to the overall tax consequences, including, specifically, the consequences under Luxembourg tax law and administrative practice, of the acquisition, ownership and disposal of the Shares in their own particular circumstances, by consulting their own professional tax advisers. In addition, the following description only addresses the tax consequences for Luxembourg holders who hold the Shares on their own behalf and other than as dealers in securities, broker dealers, agent, trustees and any other intermediaries.

14.3.1 Luxembourg taxation of the Company The Company is a fully taxable company resident for tax purposes in Luxembourg and liable as a matter of principle to any kind of taxation provided for by Luxembourg tax laws.

Registration duties Subject to certain exceptions (such as the contribution of a Luxembourg real estate property) only a fixed registration duty of EUR 75, is due upon incorporation of a Luxembourg company and on any further amendments of its articles of association. No other registration duties or other similar taxes are payable in Luxembourg on the issue of Shares by the Company.

Corporate income tax and municipal business tax The Company is subject to corporate income tax (“CIT”) and municipal business tax (“MBT”) on its worldwide income (subject to relevant double tax treaty provisions). For fiscal year 2014, the maximum CIT rate is 22.47% (including a 7% solidarity surcharge for the unemployment fund). The MBT rate is 6.75% (for a company having its statutory seat in Luxembourg City). As a result, the Company is subject to CIT and MBT at the current aggregate rate of 29.22% for the fiscal year 2014 as the Company has its statutory seat in Luxembourg City. A minimum advance CIT (“ACIT”) of EUR 3,210 (including the 7% solidarity surcharge for the employment fund) is levied, as from 1 January 2013, on any company and whose financial assets, transferable securities and cash deposits exceed 90% of their total balance sheet and is creditable against any future CIT charge due by the taxpayer. Any excess is however not refundable. An ACIT is also levied for all other companies at a progressive minimum amount which ranges from EUR 535 to EUR 21.400 (including the 7% solidarity surcharge for the employment fund) depending on the closing balance sheet total. For the purpose of determining the minimum ACIT, (i) shares and units held in tax transparent entities will be considered “financial assets” irrespective of the underlying assets held by the entity as it is computed on the commercial balance sheet and (ii) the net value of assets which generate (or may generate) income that Luxembourg is not allowed to tax according to a double tax treaty (e.g., income deriving from foreign real estate) should be excluded when computing the balance sheet total. Liability for such taxes extends to the Company’s worldwide profits including capital gains, subject to the provisions of any relevant double taxation treaty or EU regulations (and the implementing laws). The taxable income of the Company is computed by application of the Luxembourg income tax law of 4 December 1967, as amended, as commented and currently applied by the Luxembourg tax authorities (“LITL”). As a fully taxable Luxembourg resident company, the Company should, from a Luxembourg tax perspective, be able to benefit from double taxation treaties and European directives in direct and indirect tax matters.

199 It should however be noted that specific exemptions are available under certain conditions in relation to dividends and/or liquidation proceeds received and capital gains realised on qualifying shareholdings held by the Company (participation-exemption regime as provided for by article 166 of the LITL and the Grand-Ducal decree dated 21 December 2001 (Règlement Grand-Ducal du 21 décembre 2001).

Net wealth tax Unless benefiting from a special tax regime, a net wealth tax (impôt sur la fortune) (“NWT”) is due annually by the Company on January 1 of each year at the rate of 0.5% assessed on the net worth of the Company (unitary value—valeur unitaire). The unitary value is the difference between (i) assets generally estimated at their fair market valeur (valeur estimée de realisation or Gemeiner Wert), and (ii) liabilities vis-à-vis third parties. In this respect, specific assets such as shares in subsidiaries may benefit from a NWT exemption (paragraph 60 Bewertungsgesetz) if the following conditions are met: (a) the Company holds a participation of at least 10% or which acquisition price is at least EUR 1,200,000 at the end of the financial year preceding January 1, and (b) the subsidiary is (i) a Luxembourg fully taxable capital company, (ii) a non-Luxembourg capital company fully liable to a tax corresponding to the Luxembourg corporate income tax (i.e. a taxation of at least 10.5% and a taxable basis comparable to the corporate income tax basis), or (iii) a EU resident company in the meaning of article 2 of the EU Council Directive 90/435/EEC of 23 July 1990 as replaced by EU Council Directive 2011/96/EU of 30 November 2011 concerning the common fiscal regime applicable to parent and subsidiary companies of different member states. Debts in economic relation with an exempt shareholding are not deductible in calculating the net wealth. Such an economic relation implies that the debt was exclusively concluded in order to acquire, maintain, or insure the shareholding. In addition, any non-qualifying participation should be valued at its market value (i.e. including any latent gain). For the purposes of application of the exemption, the holding of participation through an entity listed under article 175 of the LITL in a company listed under paragraph (b) above is deemed to be a direct shareholding in proportion with the part of net asset value held in such entity. The NWT charge for a given year can be reduced if a specific reserve, equal to five times the NWT to save, is created before the end of the subsequent tax year and maintained during the five following tax years. The maximum NWT to be saved is limited to the corporate income tax amount due for the same tax year, including the employment fund surcharge, but before imputation of available tax credits. The NWT cannot however be reduced for the portion corresponding the ACIT.

14.3.2 Withholding tax on dividends and other distributions Withholding Tax on Dividends Dividends paid by the Company to its Shareholders are normally subject to withholding tax in Luxembourg at the domestic rate of 15% unless (i) the reduced withholding tax rates as provided for by relevant double tax treaties apply or, (ii) the conditions to benefit from the exemption of withholding tax set out under article 147 of the LITL are met which provides that: (a) at the date of the distribution is made available to the Shareholders, each of the relevant Shareholders holds or commits to hold directly or through a tax transparent vehicle (holding a participation through a tax transparent entity is deemed to be a direct participation in the proportion of the net assets held in this entity), for an uninterrupted period of at least 12 months, a participation representing (i) at least 10% in the share capital of the Company or (ii) an acquisition price of at least EUR 1,200,000; and (b) the beneficiary of the dividends is: • a corporation (société de capitaux) resident in Luxembourg and which is fully liable to Luxembourg tax; or • an EU resident company within the meaning of article 2 of the EU Council Directive 90/435/EEC of 23 July 1990 as replaced by EU Council Directive 2011/96/EU of 30 November 2011 concerning the common fiscal regime applicable to parent and subsidiary companies of different member states (to be read with the Circular L.I.R. N° 147/1 of 6 March 2012) or its Luxembourg permanent establishment; or

200 • a Swiss corporation which is liable to Swiss corporate tax without benefiting from an exemption; or • a corporation subject to an income taxation comparable to the Luxembourg CIT (in practice a tax rate of 10.5% applied on a corresponding taxable basis should be acceptable), which is resident in a country having concluded a double tax treaty with Luxembourg or its Luxembourg permanent establishment; or • a corporation or a cooperative company resident in a non-EU country member of the EEA that is fully subject to an income taxation corresponding to the Luxembourg CIT (the Luxembourg direct tax authorities usually require a taxation of at least 10.5% computed on a taxable basis comparable to the CIT one); or • a permanent establishment of a corporation or a cooperative company resident in a non-EU country member of the EEA; or • a State, a country or another body of public law. With respect to the application of the above-mentioned exemption, the investors should note that according to a recent internal note of the Luxembourg tax authorities, withholding tax should be applied to any distributions made to Shareholders holding a direct participation of at least 10% (or with an acquisition cost of at least of EUR 1,200,000) before the 12 month-period has elapsed. Repayment of such withholding tax can however ultimately be requested by the relevant Shareholder if such request is filed within the legal deadline. In case a withholding tax is levied because the conditions set out above are not satisfied as regards a Luxembourg resident corporate Shareholder or the dividend is distributed to a Luxembourg resident individual, such Luxembourg resident corporate Shareholder and/or Luxembourg resident individual will be entitled to a tax credit under certain conditions. To the extent a withholding tax applies the Company is responsible for withholding amounts corresponding to such taxation at source.

Capital Decrease The reimbursement of share capital or the repayment of share premium by the Company is not treated as a dividend distribution for Luxembourg withholding tax purposes provided: (a) there are no (i) reserves constituted further to a profit allocation or (ii) profits at the level of the Company and (b) such reimbursement is justified by sound economic reasons. Otherwise, such (i) reserves created further to a profit allocation or (ii) profits will be deemed to be distributed in priority and are thus normally subject to a 15% withholding tax at the date of share capital decrease or the repayment of share premium, unless the conditions set out in the preceding paragraphs are met. The same applies in case the reimbursement of share capital or the repayment of share premium is not justified by sound economic reasons.

14.3.3 Luxembourg taxation of the Shareholders Preliminary consideration on the Luxembourg tax residency of the Shareholders A Shareholder will not become a resident, nor be deemed to be a resident, in Luxembourg, by reason only of the holding of the Shares, or the execution, performance, delivery and/or enforcement of the Shares.

Taxation of Luxembourg resident Shareholders (a) Luxembourg resident individuals

• Tax treatment of a repayment of share capital or of share premium In case the Company has no reserves or profits and either (i) reimburses its share capital or a portion thereof, or (ii) repays its share premium or a portion thereof, the amount so reimbursed or repaid should not be considered as taxable income within the meaning of Luxembourg law and should therefore not be subject to personal income tax in the hands of the Luxembourg

201 resident individuals, provided the payment is justified by sound economic reasons. On the other hand, should (i) there be reserves or profits at the level of the Company or (ii) the payment not be justified by some economic reasons, the amount so reimbursed or repaid would be considered as a dividend income and be taxed as described below.

• Tax treatment of dividend income Any dividends received and other payments derived from the Shares received by Luxembourg tax resident individuals are in principle subject to personal income tax at the normal progressive rate (for fiscal year 2014, the maximum effective marginal tax rate being at 42.80% or 43.60% depending on the amount of taxable income). However, as the Company is a Luxembourg fully-taxable company, the Luxembourg resident individual Shareholder may benefit from a 50% exemption on the dividends received from the Company. The 15% withholding tax may be offset against the income tax liability under certain conditions. Notwithstanding the above, a Luxembourg tax resident individual is not taxable on the first tranche of EUR 1,500 (or EUR 3,000 in case of collective taxation with his/her spouse) of the aggregate amount of interest and dividend income he/she receives during any given year.

• Tax treatment of capital gains A gain realised upon the sale, disposal or redemption (note that if some but not all the Shares of a given holder of Shares are redeemed, the same tax treatment applies as for dividends) of the Shares by Luxembourg resident individual Shareholders, acting in the course of the management of his/her private wealth is not subject to Luxembourg income tax, provided (i) this sale, disposal or redemption takes place more than six months after the Shares were acquired or subscribed and (ii) provided the Shares do not represent a substantial shareholding. A shareholding is considered as substantial shareholding in limited cases, in particular if (i) the relevant Shareholder has held, either alone or together with his/her spouse or declared domestic partner and/or his/her minor children, either directly or indirectly, at any time within the five years preceding the realisation of the gain, more than 10% of the share capital of the Company, or (ii) the taxpayer acquired free of charge, within the five years preceding the transfer, a participation that constituted a substantial participation in the hands of the alienator (or the alienators in case of successive transfers free of charge within the same five-year period). Capital gains realised on a substantial participation more than six months after the acquisition thereof are subject to income tax according to the half-global rate method, (i.e. the average rate applicable to the total income is calculated according to progressive personal income tax rates and half of the average rate is applied to the capital gains realised on the substantial participation). A disposal may include a sale, an exchange, a contribution or any other kind of alienation of the shareholding. A capital gain realised upon the sale, disposal or redemption of the Shares by Luxembourg resident individual Shareholders, acting in the course of their professional/business activity will be subject to Luxembourg income tax at the normal progressive rate. Taxable gains are determined as being the difference between the price for which the Shares have been disposed of and the lower of their cost or book value.

(b) Luxembourg corporate residents In case the Company has no reserves or profits and either (i) reimburses its share capital or a portion thereof or (ii) repays its share premium or a portion thereof, the amount so reimbursed or repaid should not be considered as taxable income within the meaning of Luxembourg law and should thus not be subject to CIT and MBT at the level of Luxembourg resident corporate Shareholders (164 reation 164 de capitaux), provided the payment is justified by sound economic reasons. On the other hand, should (i) there be reserves or profits at the level of the Company or (ii) the payment not be justified by some economic reasons, the amount so reimbursed or repaid would be considered as a dividend income and be taxed as described below.

202 Luxembourg resident corporate Shareholders (164 reation 164 de capitaux) of the Company must include any profits derived (e.g. dividends), as well as any gain realised on the sale, disposal or redemption of the Shares, in their taxable profits for Luxembourg income tax assessment purposes (CIT and MBT at the current aggregate rate of 29.22% for corporate Shareholders having their statutory seat in Luxembourg City for the 2014 fiscal year). The 15% withholding tax may be offset against the income tax liability. Taxable gains are determined as being the difference between the sale, repurchase or redemption price and the lower of the cost or book value of the Shares sold or redeemed. However, dividends and liquidation proceeds received by Luxembourg resident corporate Shareholders from the Company will be exempt from CIT and MBT in case of a participation held directly, or indirectly through a tax transparent vehicle (holding a participation through a tax transparent entity is deemed to be a direct participation in the proportion of the net assets held in this entity), representing at least 10% of the share capital of the Company or an acquisition price of at least EUR 1,200,000, provided that at the time of the income is made available, the recipient has held or commits to hold the participation during an uninterrupted period of at least twelve months. If the above mentioned conditions are not met, as the Company is a Luxembourg fully-taxable company, the Luxembourg resident corporate Shareholder may benefit from a 50% exemption on the dividends received from the Company. Capital gains realised upon disposal of Shares by a Luxembourg resident corporate Shareholder are in principle subject to CIT and MBT unless the Luxembourg resident corporate Shareholder holds or commits to hold, directly or indirectly through a tax transparent vehicle (holding a participation through a tax transparent entity is deemed to be a direct participation in the proportion of the net assets held in this entity) for an uninterrupted period of at least 12 months, a minimum direct shareholding of at least 10% in the share capital of the Company or representing an acquisition price of at least EUR 6,000,000.

(c) Luxembourg corporate resident Shareholders benefiting from a special tax regime Luxembourg corporate resident Shareholders of the Company that are companies benefiting from a special tax regime, such as (i) undertakings for collective investment subject to the amended law of 17 December 2010 (Loi du 17 décembre 2010 concernant les 165 reation 165 de placement), (ii) specialised investment funds subject to the amended law of 13 February 2007 (Loi du 13 février 2007 relative aux fonds d’investissement 165 reation 165 es) and, (iii) family wealth management companies governed by the amended law of 11 May 2007 (Loi du 11 mai 2007 relative à la création d'une société de gestion de patrimoine familial (SPF)), are either tax exempt entities in Luxembourg and are thus not subject to any Luxembourg income tax.

Taxation of Luxembourg non-resident Shareholders Subject to the below considerations, Shareholders of the Company who are (i) non-resident of Luxembourg and (ii) are either (a) an individual Shareholder or (b) a corporate Shareholder without any permanent establishment or a permanent representation in Luxembourg to which or whom the Shares are attributable, are generally not liable to any Luxembourg income tax.

(a) Luxembourg non-resident individual Shareholder As an exception to the above principle, a non-resident individual Shareholder may be liable to Luxembourg income tax on capital gains realised on the Shares if he/she has held, either alone or together with his/her spouse or declared domestic partner and/or his minor children, directly or indirectly, at any time within the five years preceding the disposal of the Shares, more than 10% of the Shares of the Company and he/she has either (i) held the Shares for less than six months or (ii) been a Luxembourg resident taxpayer for more than 15 years and became a non-resident less than five years before the realisation of the capital gains on the Shares. Depending on his/her residence State, such non-resident individual Shareholders may, however, claim tax treaty benefits in order to avoid Luxembourg tax on any such capital gains. Non-resident individual Shareholders who have a permanent establishment or a permanent representative in Luxembourg to which or whom the Shares are attributable must include any dividend received, as well as any gain realised on the sale, disposal or redemption of the Shares, in their taxable income.

203 (b) Luxembourg non-resident corporate Shareholders Non-resident corporate Shareholders that have a permanent establishment or a permanent representative in Luxembourg to which or whom the Shares are attributable, must include any income received, as well as any gain realised on the sale, disposal or redemption of Shares, in their taxable income for Luxembourg tax assessment purposes. Taxable gains are determined as being the difference between the sale, repurchase, or redemption price and the lower of the cost or book value of the Shares sold or redeemed. For certain non-resident corporate Shareholders listed in article 166 of LITL that have a permanent establishment in Luxembourg, dividends received from the Company will be exempt from CIT and MBT provided that, at the date the dividends are paid, the permanent establishment of such non-resident corporate Shareholders holds or commits to hold, for an uninterrupted period of at least 12 months a minimum direct shareholding of at least 10% in the share capital of the Company or representing an acquisition price of at least EUR 1,200,000. As set out in the Grand-Ducal decree dated 21 December 2001, capital gains realised upon disposal of Shares by the Luxembourg permanent establishment of a non-resident corporate Shareholders listed in the preceding paragraph (i.e. listed in article 166 of Luxembourg income tax law) will be exempt from CIT and MBT provided such Luxembourg permanent establishment holds or commits to hold, for an uninterrupted period of at least 12 months, a minimum direct shareholding of at least 10% in the share capital of the Company or representing an acquisition price of at least EUR 6,000,000 A non-resident corporate Shareholder which does not have any permanent establishment or a permanent representative in Luxembourg may be liable to CIT on capital gains realised on the Shares if it has held, directly or indirectly, at any time within the five years preceding the disposal of the Shares, more than 10% of the Shares of the Company and it has either (i) held the Shares for less than six months or (ii) been a Luxembourg resident taxpayer for more than 15 years and became a non-resident less than five years before the realisation of the capital gains on the Shares. Depending on its residence state, such non-resident corporate Shareholder may, however, claim tax treaty benefits in order to avoid Luxembourg tax on any such capital gains.

Net wealth tax Luxembourg resident Shareholders and non-resident Shareholders that have a permanent establishment or a permanent representative in Luxembourg to which or whom the Shares are attributable are subject to Luxembourg NWT on such Shares, except if such Shareholder is (i) a Luxembourg resident or non-residual individual taxpayer, (ii) an undertaking for collective investment subject to the amended law of 17 December 2010 (Loi du 17 décembre 2010 concernant les societies de placement collectif), (iii) a securitization company governed by the amended law of 22 March 2004 on securitization (Loi du 22 mars 2004 relative à la titrisation), (iv) a company governed by the amended law of 15 June 2004 on venture capital vehicles (Loi du 15 juin 2004 relative à la Société d'investissement en capital à risqué (SICAR)), (v) a specialised investment fund governed by the amended law of 13 February 2007 (Loi du 13 février 2007 relative aux fonds d'investissement reationes), or (vi) a family wealth management company governed by the amended law of 11 May 2007 (Loi du 11 mai 2007 relative à la reation d'une société de gestion de patrimoine familial (SPF)). Subject to certain conditions being satisfied, Luxembourg resident corporate Shareholders and certain non-resident corporate Shareholders that have a permanent establishment or a permanent representative in Luxembourg to which or whom the Shares are attributable may benefit from a NWT exemption.

Other taxes No Luxembourg registration duties or similar taxes are levied on the transfer of or disposal the Shares, unless recorded in a Luxembourg notarial deed or otherwise registered in Luxembourg. No estate or inheritance tax is levied on the transfer of the Shares upon death of a Shareholder of the Company in cases where the deceased was not a resident of Luxembourg for inheritance tax purposes.

204 Luxembourg gift tax may be levied on a gift or donation of the Shares if embodied in a Luxembourg notarial deed or otherwise registered in Luxembourg. Where a holder of Shares is a resident of Luxembourg for tax purposes at the time of his death, the Shares are included in its taxable estate for inheritance tax or estate tax purposes. The above information is based on the Luxembourg law in force and current practice and is subject to change.

15. UNDERWRITING ARRANGEMENTS 15.1 Pursuant to the Underwriting Agreement dated 12 June 2014 between the Company, the Directors, the Selling Shareholders and the Underwriters: (a) The Company and the Selling Shareholders have agreed, subject to certain conditions that are typical for an agreement of this nature, to issue and sell, as the case may be, the New Shares and the Existing Shares to be issued and sold under the Offer at the Offer Price. (b) The Underwriters have severally agreed, subject to certain conditions that are typical for an agreement of this nature, to procure subscribers and purchasers for or, failing which, to subscribe and purchase for themselves the New Shares and the Existing Shares to be issued and sold under the Offer at the Offer Price. The Underwriting Agreement will become unconditional on Admission. (c) The Over-allotment Shareholders have granted the Over-allotment Option to the Stabilising Manager, pursuant to which the Stabilising Manager may, subject to certain conditions, procure purchasers for or purchase itself up to such number of Over-allotment Shares representing 10% of the total number of Shares issued under the Global Offer at the Offer Price, for the purposes, amongst other things, of allowing the Stabilising Manager to meet over-allotments, if any, in connection with the Global Offer and to cover short positions resulting from stabilising transactions. The number of Existing Shares to be transferred pursuant to the Over-allotment Option, if any, will be determined not later than 30 days from the date of publication of the Offer Price. Settlement of the Over-allotment Option will take place shortly after the exercise of the Over-allotment Option. (d) The Company has agreed to pay to the Underwriters a commission of 1.5% of the amount equal to the Offer Price multiplied by the number of New Shares which the Underwriters have agreed to procure subscribers for, or failing which to subscribe for themselves, pursuant to the terms of the Underwriting Agreement. Each Selling Shareholder has severally agreed to pay to the Underwriters a commission of 1.5% of the amount equal to the Offer Price multiplied by the number of Existing Shares which the Underwriters have agreed to procure purchasers for, or failing which to purchase themselves, pursuant to the terms of the Underwriting Agreement from such Selling Shareholder. In addition, within 180 calendar days of Admission, the Company, at its discretion, may pay to the Underwriters a commission of up to 1.0% of the amount equal to the Offer Price multiplied by the number of New Shares which the Underwriters have agreed to procure subscribers for, or failing which to subscribe for themselves, pursuant to the terms of the Underwriting Agreement; and each Selling Shareholder, at its discretion, may pay to the Underwriters a commission of up to 1.0% of the amount equal to the Offer Price multiplied by the number of Existing Shares which the Underwriters have agreed to procure purchasers for, or failing which to purchase themselves, pursuant to the terms of the Underwriting Agreement from such Selling Shareholder. (e) In addition, each Overallotment Shareholder has agreed to pay to the Underwriters a commission of 1.5% of the amount equal to the Offer Price multiplied by the number of Over-allotment Shares in respect of which the Stabilising Manager exercises the Over-allotment Option and within 180 calendar days of Admission, each Selling Shareholder, at its discretion, may pay to the Underwriters a commission of up to 1.0% of the amount equal to the Offer Price multiplied by the number of Over-allotment Shares in respect of which the Stabilising Manager exercises the Over- allotment Option in respect of such Overallotment Shareholder. (f) The obligations of the Company and the Selling Shareholders to issue or sell, as the case may be, Shares and the obligations of the Underwriters to procure subscribers and/or purchasers for, or failing which to themselves subscribe for or purchase the Shares to be issued and sold under the Global Offer are subject to certain conditions including, among others, Admission occurring by not later than 8:00 a.m. on 17 June 2014 or such later time and/or date as the Joint Global Co-ordinators may agree with the Company. The Joint Global Co-ordinators may terminate the

205 Underwriting Agreement prior to Admission in certain circumstances that are typical for an agreement of this nature but will not have the benefit of any statutory withdrawal rights. These circumstances include the occurrence of certain significant changes in the condition (financial, operational, legal or otherwise), management, business affairs, prospects or earnings of the Group and certain changes in financial, political or economic conditions (as more fully set out in the Underwriting Agreement). (g) The Company and the Selling Shareholders have severally agreed to pay (in the portions as set out in the Underwriting Agreement) by way of reimbursement to the Underwriters or as otherwise set out in the Underwriting Agreement, any stamp duty or stamp duty reserve tax arising on the issue or initial sale (as applicable) of Shares by them under the Global Offer. (h) The Company has agreed to pay or cause to be paid (together with any related value added tax) certain costs, charges, fees and expenses of, or in connection with, or incidental to, amongst others, the preparation and management of the Global Offer, Admission or the other arrangements contemplated by the Underwriting Agreement. (i) The Company has given certain representations, warranties, undertakings and indemnities to the Underwriters. The liabilities of the Company under the Underwriting Agreement are not limited as to amount or time. The Directors have given certain representations, warranties and undertakings to the Underwriters. The liabilities of the Directors under the Underwriting Agreement are limited as to time and amount. The Selling Shareholders have given certain representations, warranties and undertakings to the Underwriters. The liabilities of the Selling Shareholders under the Underwriting Agreement are limited as to time and amount.

16. STOCK LENDING ARRANGEMENTS In connection with settlement and stabilisation, the Stabilising Manager and certain of the Selling Shareholders have entered into the Stock Lending Agreement. Pursuant to the Stock Lending Agreement, the Stabilising Manager is able to borrow up to 40,000,000 Shares. The Stock Lending Agreement will allow the Stabilising Manager to settle, on Admission, over-allotments, if any, made in connection with the Global Offer. If the Stabilising Manager borrows any Shares pursuant to the terms of the Stock Lending Agreement, it will be required to return equivalent securities to the lenders or their nominees in accordance with the terms of the Stock Lending Agreement.

17. LOCK-UP ARRANGEMENTS Pursuant to the Underwriting Agreement, each of the Company, the Directors and the Selling Shareholders (other than CD&R Holdco) has agreed that during the period of 365 days from the date of Admission, and CD&R Holdco has agreed that during the period of 180 days from the date of Admission, and in each case subject to certain customary exceptions, it will not without the prior written consent of the Joint Global Co-ordinators (not to be unreasonably withheld or delayed) directly or indirectly, offer, issue, lend, sell or contract to sell, issue options in respect of, or otherwise dispose of, directly or indirectly, or announce an offering or issue of, any Shares (or any interest therein or in respect thereof) or any other securities exchangeable for or convertible into, or substantially similar to, Shares or enter into any transaction with the same economic effect as, or agree to do, any of the foregoing, other than pursuant to the Offer in the manner described in this document. Pursuant to a lock-up deed, SSA Holdco has agreed that during the period of 365 days from the date of Admission, subject to certain customary exceptions, it will not without the prior written consent of the Joint Global Co-ordinators (not to be unreasonably withheld or delayed) directly or indirectly, offer, issue, lend, sell or contract to sell, issue options in respect of, or otherwise dispose of, directly or indirectly, or announce an offering or issue of, any Shares (or any interest therein or in respect thereof) or any other securities exchangeable for or convertible into, or substantially similar to, Shares or enter into any transaction with the same economic effect as, or agree to do, any of the foregoing, other than pursuant to the Global Offer in the manner described in this document.

18. WORKING CAPITAL The Company is of the opinion that, taking into account the net proceeds of the Offer receivable by the Company, the Group has sufficient working capital for its present requirements, that is, for at least the 12 months following the date of publication of this document.

206 19. SIGNIFICANT CHANGE

19.1 There has been no significant change in the financial or trading position of the Company since it was incorporated on 19 May 2014.

19.2 Save for the acquisition of the JA Woll Group, there has been no significant change in the financial or trading position of the Group since 29 March 2014, the date to which the accountants' report in respect of B&M European Value Retail 1 in Part 7: Historical Financial Information has been prepared.

20. LITIGATION

20.1 There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) during the 12 months preceding the date of this document which may have, or have had significant effects on the Company's and/or the Group's financial position or profitability.

20.2 There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which B&M European Value Retail 1 is aware) during the 12 months preceding the date of this document which may have, or have had significant effects on B&M European Value Retail 1’s and/or the Group’s financial position or profitability.

21. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by a member of the Group within the two years immediately preceding the date of this document and are, or may be, material or have been entered into at any time by any member of the Group and contain provisions under which any member of the Group has an obligation or entitlement which is, or may be, material to the Group as at the date of this document.

21.1 Relationship Agreements

On 12 June 2014, CD&R Holdco and Simon Arora, Bobby Arora, Robin Arora and SSA Holdco (the “Arora Family”) entered into relationship agreements with the Company which will, conditional on Admission, regulate the ongoing relationship between the Company and CD&R Holdco and the Arora Family, respectively, following Admission (together, the “Relationship Agreements” and each, a “Relationship Agreement”).

The principal purpose of the Relationship Agreements is to ensure that the Company and its subsidiaries are capable of carrying on their business independently of CD&R Holdco and the Arora Family (and their respective associates), that transactions and relationships between the Group and CD&R Holdco and the Arora Family (and their respective associates) are at arm's length and on normal commercial terms.

The Relationship Agreements contain undertakings, that each of CD&R Holdco and the Arora Family and each of its respective associates, will:

(a) conduct all transactions and relationships with the Company at arm's length and on normal commercial terms;

(b) not take any action that would have the effect of preventing the Company from complying with its obligations under the Listing Rules; and

(c) not propose or procure the proposal of a shareholder resolution which is intended or appears to be intended to circumvent the proper application of the Listing Rules.

The Relationship Agreements will continue for so long as CD&R Holdco or the Arora Family together with their respective associates, as the case may be, hold 5% or more, respectively, of the Shares. CD&R Holdco and the Arora Family can also terminate their respective Relationship Agreement if the Shares are no longer listed on the premium segment of the Official List and traded on the London Stock Exchange’s main market for listed securities.

207 Under the Relationship Agreement between the Company and CD&R Holdco, CD&R Holdco is entitled to propose for appointment two Non-Executive Directors to the Board for so long as it, together with its associates, holds, in aggregate, 10% or more of the Shares and one Non-Executive Director for so long as it, together with its associates, holds, in aggregate, 5% or more of the Shares. The Company and the Board have agreed that they will convene the shareholders’ meeting to approve any such appointment as soon as practicable and will not take any action which could delay or frustrate the appointment or the convening of the shareholders’ meeting to approve the appointment. The first such appointee of CD&R Holdco is David Novak. While Sir Terry Leahy remains a Director, CD&R Holdco will only have the right to propose one Director for appointment. For so long as CD&R Holdco together with any of its associates holds, in aggregate, at least 5% of the Shares, CD&R Holdco shall be entitled to appoint (and remove and reappoint) two persons to act as observers at any meetings of the Board (including any committees of the Board that may be established from time to time), who shall be entitled to receive notice of such meetings and all information provided to the Board (or committee of the Board).

Under the Relationship Agreement between the Company and the Arora Family, the Arora Family are able to appoint one Director to the Board for so long as they, together with their respective associates, hold, in aggregate 10% or more of the Shares. The Company and the Board have agreed that they will convene the shareholders’ meeting to approve any such appointment as soon as practicable and will not take any action which could delay or frustrate the appointment or the convening of the shareholders’ meeting to approve the appointment. The first such appointee of the Arora Family is Simon Arora.

In addition, the Relationship Agreements provide that the necessary quorum for Board meetings shall be three Directors and shall include (i) at least one Non-Executive Director appointed by CD&R Holdco or Sir Terry Leahy for so long as he is considered non-independent by the Board under the Code and (ii) an Executive Director.

21.2 Orderly Sale Agreement On the date of signing the Underwriting Agreement, CD&R Holdco, SSA Holdco, Rani 1 Life Interest Trust, Rani 2 Life Interest Trust and Praxis Nominees Limited propose to enter into an agreement pursuant to which SSA Holdco shall require the consent of CD&R Holdco for the sale of any Shares for a period of a further two years after expiry of their initial twelve month lock-up. This restriction applies to fifty percent (50%) of their shareholding in the Company following the Global Offer.

The Agreement will further require all parties to co-operate for a three year period (subject to certain permitted exemptions) to maintain an orderly market in the event of the proposed sale of any Shares by any of the parties.

21.3 The Underwriting Agreement For information on the Underwriting Agreement, see paragraph 15 of this Part 10: Additional Information.

21.4 Senior Facilities Agreement On 1 March 2013, B&M Holdco 3, B&M Holdco 4 and a syndicate of banks entered into a senior facilities agreement (as amended from time to time, the “Senior Facilities Agreement”). The borrower of the senior term debt on initial utilisation of the Senior Facilities Agreement was B&M Holdco 4, and various companies in the Group are guarantors. As at 30 May 2014, the pounds sterling equivalent of £488.75 million was outstanding under the Senior Facilities Agreement.

The Senior Facilities Agreement consists of: • the TLA Facility of £125 million, which is scheduled to mature on 6 March 2019;

• the TLB Facility of £335 million, which is scheduled to mature on 6 March 2020;

• the Senior ACF of £25 million which is scheduled to mature on 6 March 2019; and

• the Senior RCF of £100 million, which is scheduled to mature on 6 March 2019 (together with the TLA Facility, the TLB Facility and the Senior ACF, the “Senior Facilities”).

208 The Senior Facilities Agreement also contains an uncommitted incremental facility that, as at 30 May 2014 was undrawn.

As at 30 May 2014, £10.0 millon of the Senior RCF was utilised.

As at 30 May 2014, the TLA Facility, the TLB Facility and the Senior ACF were fully utilised.

The Group will repay any amounts outstanding under the Senior Facilities Agreement (and cancel the loan facilities thereunder) shortly after Admission using the net proceeds of the Global Offer, together with drawings under the New Facilities.

21.5 New Facilities On 21 May 2014, B&M Holdco 4 as borrower, (in such capacity, the “New Facilities Borrower”, and together with any other member of the Group, which subsequently accedes to the New Facilities as borrower (the “Borrowers”) and B&M Holdco 4 and certain other members of the Group as guarantors (the “New Facilities Guarantors”, and together with any other member of the Group that subsequently accedes to the New Facilities as guarantor, the “Guarantors”), entered into the £590 million new facilities (the “New Facilities”), comprising a non-amortising £300 million senior term loan A facility (the “New TLA Facility”) (which is scheduled to mature five years after the first utilisation date under the New Facilities), a non-amortising £140 million senior term loan B facility (the “New TLB Facility”) (which is scheduled to mature six years after the first utilisation date under the New Facilities) and a £150 million revolving credit facility (the “New RCF”) (which is scheduled to mature five years after the first utilisation date under the New Facilities), with Bank of America Merrill Lynch International Limited as facility agent and security agent, and a syndicate of banking institutions, including certain Underwriters and/or their affiliates.

In addition, the New Facilities provide for an uncommitted incremental facility, which may become committed in accordance with the terms of the New Facilities, in an aggregate principal amount not to exceed the greater of (i) £150 million and (ii) the amount which, on a pro forma basis after giving effect to the incurrence of such incremental facility and all other applicable pro forma adjustment events, would not result in the Group's adjusted net leverage exceeding 3.10:1. Initial utilisation under the New Facilities is subject to certain conditions precedent, including that the Senior Facilities Agreement has been, or will be, repaid in full and cancelled by or on the first utilisation date under the New Facilities. Therefore, as at the date of this document, the New Facilities were undrawn.

The New RCF is available for drawing until the date falling one month prior to its scheduled maturity. Unless prepaid in accordance with the terms of the New Facilities, the New TLA Facility will be repaid on its maturity date (five years after the first utilisation date under the New Facilities) and the New TLB Facility is to be repaid on its maturity date (six years after the first utilisation date under the New Facilities).

Subject to certain exceptions and limitations (including those imposed by applicable law), the obligations of the New Facilities Borrowers and the New Facilities Guarantors under the New Facilities will be secured by a security interest over all or substantially all the assets of each Material Subsidiary (defined below) of the Company as well as the shares issued by each Material Subsidiary to another Group Company. Each Guarantor and Borrower will enter into an English law governed debenture comprising fixed and floating charges over all or substantially all of the assets of such Guarantor or Borrower. In addition, where assets such as shares and bank accounts are located in a jurisdiction outside England, security interests in respect of such assets will be granted under local law security instruments or pledges.

Subject to certain exceptions and limitations (including those imposed by applicable law), each New Facilities Guarantor has guaranteed the New Facilities. In addition, subject to certain exceptions and limitations (including those imposed by applicable law), each Group Company that has EBITDA representing 5% or more of consolidated EBITDA of the Group or gross assets representing 5% or more of the gross assets of the Group (each, a “Material Subsidiary”) and any holding company of a Material Subsidiary, must become a guarantor of the New Facilities within a specified time period after the initial drawdown of the New Facilities. In addition, subject to certain exceptions and limitations (including those imposed by applicable law), any entity that subsequently becomes a Material Subsidiary (including any acquired entity that becomes a Material Subsidiary) and any holding company of such Material Subsidiary must become a New Facilities Guarantor within a specified timeframe.

209 The New Facilities restrict the manner in which the Group's business is conducted, including (subject to certain agreed exceptions) restrictions on disposing of assets, indebtedness, creating security interests and effecting mergers. The New Facilities do not expressly restrict the payment of dividends or distributions. However, in the event of an acceleration of the New Facilities after an event of default, dividends and distributions in respect of shares the subject of a security interest may be applied by the security agent in discharge of the secured obligations. The New Facilities also impose financial covenants, requiring that a maximum adjusted net leverage ratio of the Group (calculated at the end of specified periods) does not exceed 4.50:1 and a minimum adjusted interest cover ratio of the Group (calculated at the end of specified periods) shall not be less than 4.00:1, each tested for the first time on the quarter end of the Company in December 2014 and then again on the financial year end of the Company in March 2015 and there-after, semi-annually. Each test will be made on a rolling 12-month period. The New Facilities contain customary conditions precedent, representations, covenants, events of default and mandatory prepayment events (including upon a change of control).

Shortly after Admission, the Group will use drawings under the New Facilities, together with the net proceeds of the Global Offer to repay any amounts outstanding under the Senior Facilities Agreement (and cancel the loan facilities thereunder). See Part B of Part 8: Unaudited Pro Forma Information.

21.6 Intercreditor Agreement On 21 May 2014, the New Facility Borrower and the New Facility Guarantors entered into an intercreditor agreement with, among others, the agent and lenders in respect of the New Facilities (the “Intercreditor Agreement”). The Intercreditor Agreement governs, among other things, the priority of payments and ranking of security between the New Facilities certain other ancillary facilities, hedging, intercompany loans and certain subordinated debt. It also provides a mechanism by which certain local facilities and commodity and foreign exchange hedge counterparties can obtain the benefit of the security interests granted in respect of the New Facilities.

21.7 Share Purchase Agreement for the JA Woll Group On 18 March 2014, B&M European Value Retail 2 entered into a share purchase agreement to acquire 80% of the shares in the JA Woll Group. The remaining 20% will continue to be held by the managers of the JA Woll Group, Ingo Stern through Stern Vertriebs GmbH (“Stern Vertriebs”) as his investment vehicle (together, the “Sellers”) and Ralf Hartwich (either directly or through an investment vehicle) (together with the Sellers, the “Managers”). In the same agreement the JA Woll Group agreed to acquire certain real estate that is held by Stern Vertriebs, but used by the JA Woll Group, as well as 10% of the shares in Stern Vertriebs, the remaining 90% are already held by the JA Woll Group, and 75% of the shares in Best Flora GmbH (“BestFlora”), a purchasing company used by the JA Woll Group for the purchase of plants – the remaining 25% in BestFlora are held by BestFlora's manager Michael Bahr. The purchase price payable by the JA Woll Group is to be financed by the JA Woll Group in proportion to their shareholdings.

The Sellers have agreed to provide warranties regarding title to shares, as well as financial and operational warranties (e.g. relating to intellectual property rights, financial accounts, material agreements, employment matter and compliance). In addition, the Sellers have granted tax warranties and a tax indemnity and agreed to certain covenants that protect the purchaser against actions outside the ordinary course of business and leakage. The liability of the Sellers is capped at 20% of the purchase price for the warranties and an additional 20% of the purchase price for the tax warranties and the tax indemnity. Claims become time barred on 31 December 2015, except for title and authority which become time barred on 31 December 2018. Claims under the tax warranties and the tax indemnity become time barred six months after the relevant tax audit becomes final and binding and 31 December 2020 at the latest.

B&M European Value Retail 2 has the right to nominate its wholly-owned subsidiary Kallisto Vierundneunzigste Vermögensverwaltungs GmbH as the purchaser.

The transaction was completed on 30 April 2014.

21.8 Shareholders’ Agreement for the JA Woll Group On 18 March 2014, B&M European Value Retail 2 also entered into a shareholders' agreement regarding the JA Woll Group with the Managers, who continue to hold shares in the JA Woll Group.

210 The shareholders’ agreement provides for market standard provisions regarding the corporate governance, in particular certain transactions require the consent of B&M European Value Retail 2. At the same time B&M European Value Retail 2 has agreed not to remove Ingo Stern and Ralf Hartwich, except for good cause, such as, if the EBITDA falls short by 10% or more of the management plan or in case of any disputes regarding the share purchase agreement with an amount in dispute in excess of EUR 5 million.

Each of Ingo Stern and Ralf Hartwich has a right to sell their shares in the JA Woll Group to B&M European Value Retail 2 and B&M European Value Retail 2 has the right to purchase the shares of Ingo Stern and Ralf Hartwich. The options may be exercised only within three months after the audited accounts for 2018 have been approved. The purchase price payable for the shares is six-times the EBITDA of 2018 multiplied by the shareholding sold.

21.9 Subscription Agreements On 12 June 2014, each of Kathleen Guion, Thomas Hübner, Ron McMillan and Harry Brouwer entered into Subscription Agreements with the Company whereby Kathleen Guion, Thomas Hübner, Ron McMillan and Harry Brouwer agreed to subscribe at the Offer Price for Allocated Shares with a value of £30,000, £30,000, £100,000 and £50,000, respectively. The agreements are conditional upon Admission taking place on or before 8.00 a.m. on 17 June 2014. The parties to each Subscription Agreement have agreed that the agreement cannot be terminated or rescinded after the date of execution of the agreement. Each of the parties has given certain representations and warranties to the other under each agreement.

22. RELATED PARTY TRANSACTIONS Save for the Reorganisation (including the termination of the consulting fee agreement and the indemnification agreement) described in paragraph 4 of this Part 10: Additional Information, the Relationship Agreements described in paragraph 21.1 of this Part 10: Additional Information, the Subscription Agreements described in paragraph 21.9 of this Part 10: Additional Information and in note 24 of the financial information set out in Part 7: Historical Financial Information, no related party transactions were entered into during the financial years ended 31 March 2012, 30 March 2013 or 29 March 2014 or during the period from 29 March 2014 to 11 June 2014 (the latest practicable date prior to the publication of this document).

211 23. SELLING SHAREHOLDERS AND OVER-ALLOTMENT SHAREHOLDERS The following table sets out the interests of the Selling Shareholders and the Over-allotment Shareholders in the Company's Shares immediately prior to and immediately following the Global Offer: Shares owned Shares to be after the sold if the Global Offer Over- Shares owned Shares Owned (assuming Allotment after the Global Offer Immediately Shares to be no exercise of the Option is (if the Prior to the Sold in the Over-Allotment exercised in Over-allotment Option Global Offer Global Offer Option) full is exercised in full) Shareholder and Business Address No. % No. No. % No. No. % CD&R Holdco(1) 5, rue Guillaume Kroll L-1882 Luxembourg Grand Duchy of Luxembourg . . .508,218,709 52.3 (194,575,066) 313,643,643 31.4 (218,099,537) 290,119,172 29.0 Sundeep (Simon) Arora(2) The Vault Dakota Drive, Estuary Commerce Park Liverpool L24 8RJ United Kingdom ...... 20,172,775 2.1 (15,519,658) 4,653,117 0.5 (20,172,775) — — Bobby Arora(3) The Vault Dakota Drive, Estuary Commerce Park Liverpool L24 8RJ United Kingdom ...... 20,172,775 2.1 (15,519,657) 4,653,118 0.5 (20,172,775) — — Rani 1 Life Interest Trust(4) 15 Esplanade St. Helier Jersey JE1 1RB ...... 29,820,743 3.1 (29,820,743) — — (29,820,743) — — Rani 2 Life Interest Trust(5) 15 Esplanade St. Helier Jersey JE1 1RB ...... 29,820,743 3.1 (29,820,743) — — (29,820,743) — — Robin Arora The Vault Dakota Drive, Estuary Commerce Park Liverpool L24 8RJ United Kingdom ...... 89,181,514 9.2 (84,584,801) 4,596,713 0.5 (89,181,514) — — Praxis Nominees Limited(6) Po Box 296 Sarnia House Le Truchot, St Peter Port Guernsey GY1 4NA ...... 13,009,629 1.3 (2,381,554) 10,628,075 1.1 (4,954,135) 8,055,494 0.8

(1) CD&R Holdco is the entity through which the CD&R Investors hold their interest in the Company. (2) On Admission, Simon Arora will transfer his remaining direct interest in the Company to SSA Holdco. For more information on pre- and post- Global Offer share ownership in the Company, see paragraph 8 in this Part 10: Additional Information. (3) On Admission, Bobby Arora will transfer his remaining direct interest in the Company to SSA Holdco. For more information on pre- and post- Global Offer share ownership in the Company, see paragraph 8 in this Part 10: Additional Information. (4) Simon Arora and members of his family have indirect beneficial interests in Rani 1 Life Interest Trust. For more information on pre- and post- Global Offer share ownership in the Company, see paragraph 8 in this Part 10: Additional Information. (5) Bobby Arora and members of his family have indirect beneficial interests in Rani 2 Life Interest Trust. For more information on pre- and post- Global Offer share ownership in the Company, see paragraph 8 in this Part 10: Additional Information. (6) Simon Arora, Bobby Arora, Robin Arora, Rani 1 Life Interest Trust and Rani 2 Life Interest Trust each have a direct or indirect ownership interest in Praxis Nominees Limited. For more information on pre- and post- Global Offer share ownership in the Company, see paragraph 8 in this Part 10: Additional Information.

24. CONSENTS Grant Thornton UK LLP whose registered office is at 30 Finsbury Square, London EC2P 2YU, United Kingdom is a member of the Institute of Chartered Accountants in England and Wales and has given and has not withdrawn its written consent to the inclusion of its reports set out in Part 7: Historical Financial Information and Part 8: Unaudited Pro Forma Financial Information in the form and context in which they are respectively included and has authorised the contents of its reports for the purposes of the item 23.1 of Annex I of the PD Regulation. As the offered Shares have not been and will not be registered under the U.S. Securities Act, Grant Thornton UK LLP has not filed and will not be required to file a consent under the Securities Act.

212 25. GENERAL 25.1 The Offer Price which is to be paid in cash represents a premium of 260 pence over the nominal value of 10 pence per Share.

25.2 The Offer is being underwritten in full by the Underwriters pursuant to the Underwriting Agreement, details of which are set out in paragraph 15 of this Part 10: Additional Information.

25.3 The total costs, charges and expenses payable by the Company in connection with the Global Offer are estimated to be £25 million (exclusive of VAT).

25.4 The information sourced from Euromonitor International, Google Analytics, PDIQ, Planet Retail, OC&C, Trevor Woods Associates and the United Kingdom Office for National Statistics has been accurately reproduced and so far as the Company is aware and has been able to ascertain from that information, no facts have been omitted which would render the reproduced information inaccurate or misleading.

25.5 The Shares will be admitted with the ISIN LU1072616219 and SEDOL number BMTRW10.

26. DOCUMENTS FOR INSPECTION 26.1 For a period of 12 months following Admission, copies of the following documents will be available for inspection during normal business hours on any weekday (Saturday, Sundays and public holidays excepted) at the offices of the Company: (a) the Articles; (b) the Deed Poll; (c) the reports by Grant Thornton UK LLP set out in Part 7: Historical Financial Information and Part 8: Unaudited Pro Forma Financial Information; (d) the Historical Financial Information; (e) the consent letter referred to in paragraph 24 of this Part 10: Additional Information; and (f) this document. 26.2 For the purposes of article 16 of the Luxembourg Prospectus Law, this document will be also will also be published in electronic form and made available on the website of the Luxembourg Stock Exchange (www.bourse.lu).

Dated: 12 June 2014

213 PART 11: DEFINITIONS

DEFINITIONS The following definitions apply throughout this document unless the context requires otherwise:

“2010 PD Amending Directive” Directive 2010/73/EC.

“Advisor Fund VIII Co-Investor” CD&R Advisor Fund VIII Co-Investor, L.P.

“ACIT” advance CIT.

“Acquisition Facility” an amortising term loan acquisition capex facility of £25.0 million which is scheduled to mature on 6 March 2019.

“Addressable Market” the UK grocery, single category specialist and general merchandise discount retail markets.

“Admission” Admission to Listing and Admission to Trading and a reference to Admission becoming “effective” is to be construed in accordance with the Listing Rules or the Standards (as applicable).

“Admission to Listing” the admission to listing on the premium listing segment of the Official List.

“Admission to Trading” the admission to trading of the Shares on the main market for listed securities of the London Stock Exchange.

“Allocated Shares” 77,777 of the New Shares issued by the Company pursuant to the Subscription Agreements.

“Articles of Association” or “Articles” the articles of association of the Company adopted pursuant to a shareholder resolution of the Company dated 12 June 2014 subject to and conditional upon Admission.

“Arora Family” Simon Arora, Bobby Arora, Robin Arora and SSA Holdco.

“ASIC” Australian Securities and Investments Commission.

“Audit Committee” the audit committee of the Company.

“Authorised Capital Clause” article 5.2 of the Articles of Association.

“B&M Co-Investor” CD&R B&M Co-Investor, L.P.

“B&M European Value Retail 1” B&M European Value Retail 1 S.à r.l., formerly known as CDR Bounty (Luxembourg) S.à.r.l.

“B&M European Value Retail 2” B&M European Value Retail 2 S.à r.l., formerly known as SBR Europe S.à.r.l.

“B&M European Value Retail Group” B&M European Value Retail 1 and its subsidiary undertakings.

“B&M Holdco 1” B&M European Value Retail Holdco 1 Limited, formerly known as CDR Bounty Holdco 1 Limited.

“B&M Holdco 2” B&M European Value Retail Holdco 2 Limited, formerly known as CDR Bounty Holdco 2 Limited.

“B&M Holdco 3” B&M European Value Retail Holdco 3 Limited, formerly known as CDR Bounty Holdco 3 Limited.

“B&M Holdco 4” B&M European Value Retail Holdco 4 Limited, formerly known as CDR Bounty Holdco 4 Limited.

214 “BCA” British Car Auctions Limited.

“BofA Merrill Lynch” Merrill Lynch International.

“Board” the board of directors of the Company.

“Borrowers” B&M Holdco 4 and any other Group Company that subsequently accedes to the New Facilities as a borrower.

“Bribery Act” United Kingdom Bribery Act 2010.

“CAGR” compound annual growth rate.

“CD&R” Clayton, Dubilier & Rice, LLC.

“CDR Acquisition” the acquisition by B&M European Value Retail 1 by B&M European Value Retail 2 on 6 March 2013.

“CD&R Co-Investment Vehicles CD&R B&M Co-Investor, L.P., F&F Fund VIII and Advisor Fund VIII Co-Investor.

“CD&R European Value Retail CD&R European Value Retail Investment (Cayman), a Cayman Investment (Cayman)” Islands limited partnership owned by the CD&R Investors, which is managed by CD&R and through which the CD&R Investors hold their interest in the Company, formerly known as CDR Bounty (Cayman) Partners L.P.

“CD&R Fund VIII” Clayton, Dubilier & Rice Fund VIII, L.P.

“CD&R Holdco” CD&R European Value Retail Investment S.à r.l.

“CD&R Investors” CD&R Co-Investment Vehicles and CD&R Fund VIII.

“CISA” Swiss Federal Act on Collective Investment Schemes

“CIT” corporate income tax

“Co-Lead Managers” Jefferies International Limited and Numis Securities Limited.

“Code” the US Internal Revenue Code of 1986, as amended.

“Company” B&M European Value Retail S.A.

“Companies Act” the Companies Act 2006, as amended.

“Corporations Act” the Corporations Act 2001.

“CREST” the UK-based system for the paperless settlement of trades in listed securities in uncertificated form, of which EUI is the operator.

“CSOP” a company share option plan established under the provisions of Schedule 4 to the ITEPA, adopted by the Company adopted on 12 June 2014.

“CSSF” the Commission de Surveillance du Secteur Financier.

“Custodian” the custodian nominated by the Depository.

“Deed Poll” the deed poll in respect of Depository Interests dated 9 June 2014 executed by the Depository prior to Admission in favour of the holders of the Depository Interests from time to time.

“Depository” Capita IRG Trustees Limited.

215 “Depository Agreement” the agreement for the provision of depository services and custody services in respect of the Depository Interests dated 9 June 2014 between the Company and the Depository.

“Depository Interest” or “DI” a depository interest in respect of a Share.

“DFSA” Dubai Financial Services Authority.

“Dividend Shares” Shares which the Company can, under the SIP, allow eligible employees to purchase using dividends received on Free Shares, Partnership Shares and Matching Shares up to percentage limits set by the Company.

“Directors” the directors of the Company identified in Part 3: Directors, Senior Managers and Corporate Governance.

“Disclosure and Transparency Rules” the Disclosure and Transparency Rules made by the FCA under Part VI of FSMA.

“EEA” European Economic Area.

“EU” European Union.

“EUI” Euroclear UK & Ireland Limited.

“EU Market Abuse Directive” Directive 2003/6/EC.

“EU Takeover Directive” Directive 2004/25/EC.

“EU Transparency Directive” Directive 2004/109/EC.

“Executive Directors” the executive directors of the Company.

“Exempt Investors” select investors who are able to demonstrate that they (i) fall within one or more of the categories of investors under section 708 of the Corporations Act to whom an offer may be made without disclosure under Part 6D.2 of the Corporations Act and (ii) are “wholesale clients” for the purpose of section 761G of the Corporations Act.

“Existing Shares” the Shares that will be in issue immediately prior to Admission.

“FATCA” the Foreign Account Tax Compliance Act, as amended.

“FCA” UK Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part IV of FSMA.

“FCPA” United States Foreign Corrupt Practices Act of 1977.

“FIEL” Financial Instruments and Exchange Law of Japan.

“Financial Adviser” Lazard & Co., Limited.

“Firesource” Firesource Limited

“FMCG” Fast Moving Consumer Goods.

“Free Shares” free Shares that, under the SIP, can be given up by the Company to eligible employees in each tax year.

“FSMA” Financial Services and Markets Act 2000, as amended.

216 “F&F Fund VIII” CD&R Friends & Family Fund VIII, L.P.

“Global Offer” the offer of Shares to certain institutional and other investors (being those who would be exempt from the prospectus requirements as set out under article 5(2) of the Luxembourg Prospectus Law) and including New Shares issued to certain Non-Executive Directors pursuant to the Subscription described in Part 9: The Global Offer.

“Good Leaver” a participant in the CSOP option plan who dies or leaves employment as a consequence of injury, disability, redundancy, the transfer of the employing business or company, retirement or death.

“Gross Dividend” the aggregate of the dividend received from the Company and the entitled tax credit equal to one-ninth of the amount of the dividend.

“Group Company” any of the Company and its subsidiary undertakings from time to time.

“Group” (1) Firesource and its subsidiary undertakings prior to the date that Firesource became a wholly owned subsidiary of B&M European Value Retail 2, (2) B&M European Value Retail 2 and its subsidiary undertakings from this date and until the date of the CDR Acquisition, (3) B&M European Value Retail 1 and its subsidiary undertakings from the date of the CDR Acquisition and prior to the Reorganisation taking effect on Admission and (4) upon the Reorganisation taking effect on Admission, the Company and its subsidiary undertakings.

“Guarantors” the New Facilities Guarantors and any other Group Company that subsequently accedes to the New Facilities as a guarantor.

“Historical Financial Information” financial information for the three financial years ended 31 March 2012, 30 March 2013 and 29 March 2014 prepared in accordance with IFRS.

“HMRC” Her Majesty’s Revenue & Customs.

“IASB” International Accounting Standards Board.

“IFRS” International Financial Reporting Standards issued by the IASB, as adopted by the EU.

“Important Participation Thresholds” 5%, 10%, 15%, 20%, 25%, 33 1⁄3%, 50% and 66 2⁄3%.

“Independent Non-Executive Directors” the independent non-executive directors of the Company.

“IRS” the US Internal Revenue Service.

“ISIN” International Securities Identification Number.

“ITEPA” the Income Tax (Earnings and Pensions) Act 2003.

“JA Woll Group” J.A. Woll-Handels GmbH and its subsidiaries.

“Joint Bookrunners” BofA Merrill Lynch, Goldman Sachs International, Deutsche Bank AG, London Branch and Credit Suisse Securities (Europe) Limited.

“Joint Global Co-ordinators” BofA Merrill Lynch and Goldman Sachs International.

“Joint Sponsors” BofA Merrill Lynch and Goldman Sachs International.

“LIBOR” the London Interbank Offered Rate.

“Listing Rules” the listing rules made by the FCA under Part VI of FSMA.

217 “LTIP” a performance share plan for senior management of the Company and its Group, adopted by the Company adopted on 12 June 2014.

“LITL” Luxembourg income tax law of 4 December 1967, as amended, as commented and currently applied by the Luxembourg tax authorities.

“London Stock Exchange” London Stock Exchange plc.

“Luxembourg” the Grand Duchy of Luxembourg.

“Luxembourg Company Law” Luxembourg law of 10 August 1915 on Commercial Companies, as amended.

“Luxembourg Market Abuse Law” Luxembourg law of 9 May 2006 on market abuse, as amended (the transposition into Luxembourg law of the EU Market Abuse Directive).

“Luxembourg Prospectus Law” Luxembourg law of 10 July 2005 on prospectuses for securities, as amended.

“Luxembourg Squeeze-out/Sell-out Law” Luxembourg law of 21 July 2012 on squeeze-out and sell-out, as amended.

“Luxembourg Takeover Law” Luxembourg law of 19 May 2006 on takeovers (the transposition into Luxembourg law of the EU Takeover Directive). “Luxembourg Transparency Law” Luxembourg law of 11 January 2008 on transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (the transposition into Luxembourg law of the EU Transparency Directive).

“Managers” Ralf Hartwich together with the Sellers.

“Matching Shares” matching Shares that can be offered by the Company under the SIP to eligible employees for each Partnership Share bought by an eligible employee.

“Material Subsidiary” each Group Company that has EBITA representing 7.5% or more of consolidated EBITDA of the Group.

“Markets in Financial Instruments Directive” Directive 2004/39/EC

“MBT” municipal business tax.

“Mémorial C” the Luxembourg official gazette Mémorial C, Recueil des Sociétés et Associations.

“Model Code” the code set out at Annex 1 to Rule 9 of the Listing Rules.

“New Facilities” the £590 million new facilities, comprising of the New TLA Facility, the New TLB Facility and the New RCF.

“New Facilities Borrower” B&M Holdco 4, as borrower under the New Facilities.

“New Facilities Guarantors” B&M Holdco 4 and certain members of the Group, as guarantors under the New Facilities.

“New RCF” a £150 million revolving credit facility which is scheduled to mature five years after the first utilisation date under the New Facilities.

“New Shares” Shares to be issued by the Company under the Global Offer.

218 “New TLA Facility” a non-amortising £300 million senior term loan A facility which is scheduled to mature five years after the first utilisation date under the New Facilities.

“New TLB Facility” a non-amortising £140 million senior term loan B facility which is scheduled to mature six years after the first utilisation date under the New Facilities.

“NPS” net promoter score.

“Nomination Committee” means the nomination committee of the Company.

“Non-Executive Directors” the non-executive directors of the Company.

“NWT” net wealth tax (impôt sur la fortune).

“OC&C” OC&C Strategy Consultants LLP.

“Offer” the offer of 27,777,778 New Shares and 372,222,222 Existing Shares to certain institutional and other investors (being those who would be exempt from the prospectus requirements as set out under article 5(2) of the Luxembourg Prospectus Law) described in Part 9: The Global Offer.

“Offer Price” the price of 270 pence per Share at which Shares are to be issued under the Global Offer.

“Official List” the Official List of the UKLA.

“Order” Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended.

“OSC” Ontario Securities Commission.

“Over-allotment Option” the option granted by the Over-allotment Shareholders pursuant to which the Stabilising Manager may require the Over-allotment Shareholders to sell additional Existing Shares at the Offer Price.

“Over-allotment Shareholders” Simon Arora, Bobby Arora and Robin Arora (either directly or indirectly) and CD&R Holdco.

“Over-allotment Shares” Existing Shares in an amount of up to a maximum of 10% of the total number of Shares comprised in the Global Offer which the Stabilising Manager may require to sell at the Offer Price pursuant to the Over- allotment Option.

“Partnership Shares” Shares in respect of which the Company can, under the SIP, offer to eligible employees the opportunity to buy up to £1,800 worth per year.

“PAYE” pay-as-you-earn.

“PD Regulation” European Commission Regulation (EC) No. 809/2004, as amended.

“PFIC” a passive foreign investment company.

“Pounds sterling”, “pence” or “p” lawful currency of the UK.

“PRA” UK Prudential Regulation Authority.

“Preferred Equity Certificates” preferred equity certificates with a nominal value of £556.1 million.

219 “Private Placement Provinces” the Canadian Provinces of Ontario and Quebéc.

“Pro Forma Financial Information” pro forma statement of net assets.

“Prospectus Directive” Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State.

“Qualified Institutional Buyers” or “QIBs” as defined in Rule 144A under the U.S. Securities Act.

“Qualified Investors” qualified investors within the meaning of article 2(1)(e) of the Prospectus Directive.

“Refinancing” the repayment by the Group of outstanding amounts of principal and interest under the Senior Facilities and borrowing by the Group under the New Facilities.

“Regulated Market” a regulated market as defined in the Markets in Financial Instruments Directive 2004/39/EC.

“Regulation S” Regulation S under the U.S. Securities Act.

“Relationship Agreements” relationship agreements entered into between CD&R Holdco and the Company on 12 June 2014 and between the Arora Family and the Company on 12 June 2014.

“Relevant Implementation Date” from and including the date on which the Prospectus Directive is implemented in the Relevant Member State.

“Relevant Member State” any member state of the EEA which has implemented the Prospectus Directive.

“Relevant Persons” (i) are persons who have professional experience in matters relating to investments falling within article 19(5) of the Order, (ii) are persons who are high net worth entities falling within article 49(2)(a) to (d) of the Order, or (iii) are other persons to whom they may otherwise lawfully be communicated (all such persons).

“Remuneration Committee” the remuneration committee of the Company.

“Reorganisation” the steps described in paragraph 4.3 of Part 10: Additional Information.

“RSA 421-B” Chapter 421-B of the New Hampshire Revised Statutes.

“Rule 144A” Rule 144A under the U.S. Securities Act.

“SDRT” stamp duty reserve tax.

“SEC” the U.S. Securities and Exchange Commission.

“Securities and Exchange Law” the Securities and Exchange Law of Japan.

“SEDOL” Stock Exchange Daily Official List.

“Sellers” the managers of the JA Woll Group and Ingo Stern through Stern Vertriebs as his investment vehicle.

220 “Selling Shareholders” those shareholders of the Company who, pursuant to the Underwriting Agreement, have agreed to sell Shares in the Global Offer being Simon Arora, Bobby Arora and Robin Arora (either directly or indirectly) and CD&R Holdco.

“Senior Independent Non-Executive Director” the senior independent non-executive director of the Company.

“Senior Facilities” the Senior RCF together with the TLA Facility, the TLB Facility and the Acquisition Facility.

“Senior Facilities Agreement” a senior facilities agreement entered into on 1 March 2013 between B&M Holdco 3, B&M Holdco 4 and a syndicate of banks, consisting of the Senior Facilities and an uncommitted incremental facility.

“Senior Managers” those persons named in Part 3: Directors, Senior Managers and Corporate Governance.

“Senior RCF” a £100.00 million multicurrency revolving credit facility which is scheduled to mature on 6 March 2019.

“Shareholders” holders of Shares.

“Shares” ordinary shares of 10 pence each in the capital of the Company.

“SIP” a share incentive plan established under the provisions of Schedule 2 to the ITEPA, adopted by the Company on 12 June 2014.

“SIP Trust” a UK resident trust through which the SIP is operated.

“SIX” SIX Swiss Exchange.

“SKU” stock keeping unit.

“Speke 1” the Group’s principal distribution centre in Speke near Liverpool, United Kingdom.

“Speke 2” the Group’s second distribution centre in Speke near Liverpool, United Kingdom.

“SSA Holdco” SSA Investments S.à. r.l.

“Stabilising Manager” BofA Merrill Lynch.

“Standards” the Admission and Disclosure Standards of the London Stock Exchange.

“Stern Vertriebs” Stern Vertriebs GmbH.

“Stock Lending Agreement” a stock lending agreement between BofA Merrill Lynch and certain of the Selling Shareholders on 12 June 2014.

“Subscription” the subscription of the Allocated Shares pursuant to the Subscription Agreements.

“Subscription Agreements” the subscription agreements dated 12 June 2014 between the Company and each of Kathleen Rose Guion, Thomas Hübner, Ronald (Ron) Thomas McMillan and Henricus (Harry) Brouwer.

“TLA Facility” an amortising term loan “A” facility of £125.00 million which is scheduled to mature on 6 March 2019.

“TLB Facility” a non-amortising term loan “B” facility of £335.00 million which is scheduled to mature on 6 March 2020.

221 “Trust” an employee share trust which will be an employee share scheme and can be used to satisfy awards under the LTIP.

“UK” or “United Kingdom” the United Kingdom of Great Britain and Northern Ireland.

“UK Corporate Governance Code” UK Corporate Governance Code published by the Financial Reporting Council in May 2010.

“UK GAAP” generally accepted accounting principles in the United Kingdom.

“UKLA” UK Listing Authority.

“Underwriters” BofA Merrill Lynch, Goldman Sachs International, Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, London Branch, Jefferies International Limited and Numis Securities Limited.

“Underwriting Agreement” the underwriting agreement described in paragraph 15 of Part 10: Additional Information.

“US GAAP” generally accepted accounting principles in the United States.

“US Holder” a beneficial owner of Shares that is for US federal income tax purposes: (i) a citizen or resident alien of the United States, (ii) a corporation or other entity treated as a corporation for US federal income tax purposes created or organised in or under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate, the income of which is subject to US federal income taxation regardless of its source or (iv) a trust if (x) a court within the United States is able to exercise primary supervision over its administration and (y) one or more United States persons (as defined in the Code) have the authority to control all of the substantial decisions of such trust.

“U.S. Securities Act” the U.S. Securities Act of 1933, as amended.

“US”, “U.S.” or “United States” United States of America, its territories and possessions, any state of the United States and the District of Columbia.

“US$”, “US dollars” or “$” United States dollars.

“VAT” value added tax.

“WMS” warehouse management system.

In this document, words denoting any gender include all genders (unless the context otherwise requires).

222 REGISTERED OFFICE OF THE COMPANY B&M European Value Retail S.A. 16, Avenue Pasteur L-2310 Luxembourg JOINT GLOBAL CO-ORDINATORS, JOINT BOOKRUNNERS AND JOINT SPONSORS BofA Merrill Lynch Goldman Sachs International 2 King Edward Street Peterborough Court London EC1A 1HQ 133 Fleet Street United Kingdom London EC4A 2BB United Kingdom JOINT BOOKRUNNERS Credit Suisse Securities (Europe) Limited Deutsche Bank AG, London Branch One Cabot Square Winchester House London E14 4QJ 1 Great Winchester Street United Kingdom London EC2N 2DB United Kingdom CO-LEAD MANAGERS Jefferies International Limited Numis Securities Limited Vintners Place The London Stock Exchange Building 68 Upper Thames Street 10 Paternoster Square London EC4V 3BJ London EC4M 7LT United Kingdom United Kingdom FINANCIAL ADVISER Lazard & Co., Limited 50 Stratton Street London W1J 8LL United Kingdom LEGAL ADVISERS TO THE COMPANY as to U.S. and English Law as to Luxembourg Law Clifford Chance LLP Clifford Chance 10 Upper Bank Street 10 boulevard G.D. Charlotte London E14 5JJ B.P. 1147 L-1011 United Kingdom Luxembourg LEGAL ADVISERS TO THE UNDERWRITERS as to U.S. and English Law as to Luxembourg Law Freshfields Bruckhaus Deringer LLP Arendt & Medernach—Avocats 65 Fleet Street 14, rue Erasme London EC4Y 1HS L-2082 United Kingdom Luxembourg INDEPENDENT AUDITOR TO THE COMPANY REPORTING ACCOUNTANT Grant Thornton Lux Audit S.A. I.2.1 Grant Thornton UK LLP 89A, Pafebruch 30 Finsbury Square L-8308 Capellen London EC2P 2YU Luxembourg United Kingdom FINANCIAL ADVISER TO THE ARORA FAMILY LEGAL ADVISERS TO THE ARORA FAMILY N.M. Rothschild & Sons Limited as to English Law New Court Allen & Overy LLP St Swithin’s Lane One Bishops Square London EC4N 8AL London E1 6AD United Kingdom United Kingdom

DEPOSITORY LEGAL ADVISERS TO CD&R HOLDCO Capita IRG Trustees Limited as to English Law The Registry Debevoise & Plimpton LLP 34 Beckenham Road 65 Gresham Street Beckenham London EC2V 7NQ Kent, BR3 4TU United Kingdom United Kingdom Printed by RR Donnelley 729807