CENTUM INVESTMENT COMPANY LIMITED Incorporated in Kenya under the Companies Act (Chapter 486, Laws of Kenya) Registration Number C.8/67 Information Memorandum in respect of the offer to the public and listing of Kenya Shillings six billion (Kes.6,000,000,000) senior unsecured fixed rate notes and senior unsecured equity linked notes [●] May 2015 TABLE OF CONTENTS 1. IMPORTANT NOTICES AND STATEMENTS ................................................................................. 1 2. EXECUTIVE SUMMARY .................................................................................................................. 5 3. DEFINITIONS AND ABBREVIATIONS.......................................................................................... 14 3.1 DEFINITIONS ................................................................................................................................... 14 3.2 ABBREVIATIONS .............................................................................................................................. 20 4. SUMMARY OF CORPORATE INFORMATION ............................................................................ 24 5. ADVISERS TO THE ISSUER ON THE NOTE ISSUE ..................................................................... 26 6. TIMETABLE .................................................................................................................................... 27 7. SUMMARY OF THE OFFER ........................................................................................................... 28 7.1 SUMMARY OF THE PROPOSED NOTES ................................................................................................. 28 8. USE OF PROCEEDS ........................................................................................................................ 38 8.1 FINANCIAL SERVICES ....................................................................................................................... 39 8.2 ENERGY .......................................................................................................................................... 41 8.3 REAL ESTATE .................................................................................................................................. 42 8.4 OFFER RELATED EXPENSES .............................................................................................................. 42 9. ABOUT THE ISSUER ...................................................................................................................... 43 9.1 COMPANY OVERVIEW ...................................................................................................................... 43 9.2 VISION, MISSION AND STRATEGY ...................................................................................................... 43 9.3 BUSINESS MODEL ............................................................................................................................ 44 9.4 TRACK RECORD ............................................................................................................................... 45 9.5 OPERATING STRUCTURE ................................................................................................................... 49 9.6 CENTUM’S PORTFOLIO AND SECTOR FOCUS ........................................................................................ 50 9.6.1 Financial Services (FS) Sector ............................................................................................................. 50 9.6.2 FMCG Sector ....................................................................................................................................... 52 9.6.3 Energy Sector ....................................................................................................................................... 53 9.6.4 Real Estate Sector ................................................................................................................................ 56 9.6.5 Education and Healthcare Sector ......................................................................................................... 65 9.6.6 Agriculture Sector ................................................................................................................................ 65 9.6.7 Quoted Private Equity (“QPE”) Portfolio ............................................................................................ 65 9.6.8 Other Portfolio ..................................................................................................................................... 66 9.7 DIVIDEND POLICY ............................................................................................................................ 67 9.8 PRINCIPAL SHAREHOLDERS ............................................................................................................... 67 9.9 SHAREHOLDING BY DIRECTORS ......................................................................................................... 67 9.10 DISTRIBUTION OF SHAREHOLDING ..................................................................................................... 68 9.11 EMPLOYEES .................................................................................................................................... 68 10. TERMS AND CONDITIONS OF THE NOTES ................................................................................ 70 11. KEY INVESTMENT CONSIDERATIONS....................................................................................... 85 11.1 BUSINESS MODEL ............................................................................................................................ 85 11.2 TRACK RECORD OF CONSISTENT PERFORMANCE AND LONG TERM GROWTH ........................................... 86 11.3 UNUTILISED DEBT CARRYING CAPACITY ............................................................................................. 87 11.4 STRONG CASH FLOWS ....................................................................................................................... 88 11.5 A WELL-DIVERSIFIED INVESTMENT PORTFOLIO .................................................................................. 89 11.6 STRONG CORPORATE GOVERNANCE .................................................................................................. 90 11.7 STRONG BRAND NAME ..................................................................................................................... 91 12. ECONOMIC OVERVIEW ............................................................................................................... 92 12.1 KENYA MACRO - ECONOMIC OVERVIEW ............................................................................................ 92 12.2 UGANDA MACRO - ECONOMIC OVERVIEW .......................................................................................... 94 13. INDUSTRY OVERVIEW ................................................................................................................. 98 i 13.1 POWER SECTOR ............................................................................................................................... 98 13.1.1 Overview of the East African Power Sector ......................................................................................... 98 13.1.2 Power Sector in Kenya ........................................................................................................................ 98 13.2 FAST MOVING CONSUMER GOODS (FMCG) SECTOR ......................................................................... 103 13.2.1 About FMCG ..................................................................................................................................... 103 13.2.2 Key Drivers of FMCG in Africa......................................................................................................... 105 13.3 FINANCIAL SERVICES SECTOR ......................................................................................................... 109 13.3.1 Kenya Banking Sector Overview ....................................................................................................... 109 13.3.2 Industry Performance ........................................................................................................................ 110 13.3.3 Challenges ......................................................................................................................................... 111 13.3.4 Opportunities ..................................................................................................................................... 111 13.3.5 Overview of Kenya Insurance Industry .............................................................................................. 112 13.3.6 Industry Performance ........................................................................................................................ 112 13.3.7 Kenya Insurance Market Outlook ...................................................................................................... 113 13.3.8 Performance Overview ...................................................................................................................... 113 13.4 RECENT PRIVATE EQUITY TRANSACTIONS IN EAST AFRICA ................................................................ 114 13.5 THE ASSET MANAGEMENT INDUSTRY .............................................................................................. 115 13.5.1