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DJ National Milk Records Plc Notice of General Meeting

 
TIDMNMRP 
 
16 May 2018 
 
                           NATIONAL MILK RECORDS PLC 
 
    ("NMR", the "Company", or, together with its subsidiaries, the "Group") 
 
 Proposed Reduction of Capital, Adoption of New Articles and Notice of General 
                                    Meeting 
 
NMR, the leading UK supplier of dairy and livestock services, is today posting 
a circular to the Company's shareholders setting out proposals for a Reduction 
of Capital and the adoption of New Articles and convening a General Meeting of 
the Company to be held at 11.00 a.m. on 4 June 2018 at the offices of Gowling 
(WLG) UK LLP. 
 
Background to and reasons for the Reduction of Capital 
 
The Deficit that has appeared between 31 March 2016 and 30 June 2017 in the 
Company's profit and loss account is due to the exit from the Milk Pension Fund 
of the Company and its subsidiary, NML (which were previously participating 
employers in the Fund). The Directors believed that continued participation in 
the Fund imposed a severe cost burden on the Group and also constrained its 
future operations by limiting its ability to raise funds. The aggregate cost of 
exiting the Fund amounted to approximately GBP10,793,000 after a credit for 
deferred tax and details of the arrangements were set out in a circular 
published by the Company on 1 June 2017. 
 
As at 30 June 2017, the Company had a profit and loss account deficit of 
approximately GBP11,453,000 and the balance standing to the credit of the 
Company's share premium account was circa GBP7,426,000. The Deferred Shareholder 
has consented, subject to the passing of the Reduction Resolution, to the 
cancellation and extinguishing of the Deferred Shares in issue and the Company 
is therefore seeking the approval of the Ordinary Shareholders to cancel GBP 
0.0975 of the nominal value of its Existing Ordinary Shares, to cancel and 
extinguish the Deferred Shares in issue and to cancel its share premium account 
(in its entirety) creating realised profits of approximately GBP9.5 million 
(representing the aggregate nominal amount of the cancelled nominal value of 
the Ordinary Shares (GBP2,070,870.945), the aggregate amount of the cancelled 
Deferred Shares (GBP90) and the amount of the cancelled share premium account), 
which will, subject to the discharge of any undertakings required by the Court 
as explained below, be sufficient to substantially reduce the Deficit. If 
approved by the Ordinary Shareholders, the Reduction of Capital will require 
subsequent approval by the Court. 
 
As a result of the Reduction of Capital and the elimination of the Deficit, the 
availability of any future positive distributable reserves of the Company would 
give the Company the flexibility to pay dividends and make other returns of 
capital and/or distributions to the Ordinary Shareholders, should it be 
considered appropriate to do so in the future. 
 
Reduction of Capital 
 
It is proposed that the Reduction of Capital will involve: 
 
 1. the cancellation of part of the nominal value of each Existing Ordinary 
    Share, namely of GBP0.0975 on each issued Ordinary Share of GBP0.10 each; 
 
 2. the cancellation and extinguishing of the Deferred Shares in issue; and 
 
 3. the cancellation of the full amount standing to the credit of the Company's 
    share premium account (such amount being, as at 30 June 2017, approximately 
    GBP7,426,000). 
 
    The Reduction of Capital, if approved by the Court, will create realised 
    profits sufficient to substantially reduce the accrued Deficit. 
 
    The Reduction of Capital is conditional on: 
 
 4. the passing of the Reduction Resolution; 
 
 5. the Reduction of Capital being approved by the Court; and 
 
 6. the Court Order being registered by the Registrar of Companies. 
 
    It is anticipated that the initial directions hearing in relation to the 
    Reduction of Capital will take place on 13 June 2018, with the final 
    hearing taking place on 26 June 2018 and the Reduction of Capital becoming 
    effective on that day, following the necessary registration of the Court 
    Order by the Registrar of Companies. 
 
    The Court will need to be satisfied that the interests of the Company's 
    creditors will not be prejudiced as a result of the Reduction of Capital. 
    The Company will therefore put into place such form of creditor protection 
    (if any) as the Court may require. This may include seeking the consent of 
    the Company's creditors to the Reduction of Capital or the provision by the 
    Company to the Court of an undertaking to deposit a sum of money into a 
    blocked account created for the purposes of discharging the non-consenting 
    creditors of the Company. 
 
    Following completion of the Reduction of Capital, there will be no change 
    in the number of Ordinary Shares in issue (only to their nominal value) and 
    the Deferred Shares will no longer form part of the share capital of the 
    Company. The Ordinary Shares will be traded on the NEX Exchange Growth 
    Market in the same way as they currently are and will be equivalent in all 
    other respects, with the exception of the difference in nominal value. 
    Existing share certificates for Ordinary Shares will continue to be valid 
    following the Reduction of Capital, and no new certificates will be issued 
    following the Reduction of Capital. In addition, the ISIN of the Ordinary 
    Shares will not change. The market price of NMR shares is not directly 
    affected by any change in their nominal value. 
 
    The Deferred Shareholder has consented, subject to the passing of the 
    Reduction Resolution, to the cancellation and extinguishing of the Deferred 
    Shares and accordingly the Reduction of Capital requires the approval of 
    Ordinary Shareholders of the Reduction Resolution, which will be sought at 
    the General Meeting. 
 
    In the event that the Court does not confirm the Reduction of Capital, the 
    Ordinary Shares will retain their current nominal value of GBP0.10 each, the 
    Deferred Shares will continue to form part of the issued share capital of 
    the Company and the Deficit will not be reduced accordingly. 
 
    Adoption of the New Articles 
 
    The principle purpose of the adoption of the New Articles is to adopt new 
    procedures relating to untraced shareholders and unclaimed funds. 
 
    The Company is proposing two alternative drafts to be adopted as the New 
    Articles. New Articles Model A will be adopted in the event that that the 
    Reduction Resolution is passed and the Reduction of Capital becomes 
    effective and will (i) refer to the par value of the Ordinary Shares as 
    being GBP0.0025 and (ii) remove the reference to and the rights attaching to 
    the Deferred Shares. New Articles Model B will be adopted in the event that 
    the Reduction Resolution is not passed or if the Reduction Resolution is 
    passed but the Reduction of Capital does not become effective and will 
    refer to the par value of the Ordinary Shares being GBP0.10 and will continue 
    to refer to and reference the rights attaching to the Deferred Shares. That 
    is the only difference between New Articles Model A and New Articles Model 
    B. 
 
    Other Matters 
 
    In addition, approval will also be sought at the General Meeting of 
    resolutions to: 
 
 7. renew the Directors' authority to allot shares pursuant to section 551 of 
    the Act and to disapply section 561 of the Act, in each case to take 
    account of the Reduction of Capital; and 
 
 8. grant authority to the Company to make market purchases of Ordinary Shares, 
    such authority being limited to the purchase of 10 per cent. of the 
    Ordinary Shares in issue as at 16 May 2018. 
 
    EXPECTED TIMETABLE OF KEY EVENTS 
 
Publication of the circular                                     16 May 2018 
 
Latest time and date for receipt of Form of Proxy      11.00 a.m. on 31 May 
for the General Meeting                                                2018 
 
General Meeting                                        11.00 a.m. on 4 June 
                                                                       2018 
 
Court hearing to confirm the Reduction of Capital              26 June 2018 
 
Effective date for Reduction of Capital                        26 June 2018 
 
 
These dates are subject to change. Any change will be notified by an 
announcement via an RIS. 
 
DEFINITIONS 
 
The following definitions apply throughout this announcement, unless the 
context requires otherwise: 
 
"Act"                                 the Companies Act 2006, as amended 
                                      from time to time 
 
"Adoption of New Articles"            the proposed adoption of the New 
                                      Articles pursuant to Resolution 2 of 
                                      the Notice of General Meeting 
 
"Current Articles"                    the articles of association of the 
                                      Company in force as at the date of 
                                      this announcement 
 
"Court"                               the High Court of Justice in England 
                                      and Wales 
 
"Court Order"                         the order of the Court confirming the 
                                      Reduction of Capital 
 
"Deferred Shareholder"                the holder of the Deferred Shares 
 
"Deferred Shares"                     the 90 deferred shares of GBP1.00 each 
                                      in the capital of the Company 
 
"Deficit"                             the accumulated deficit on the 
                                      Company's profit and loss account 
 
"Directors"                           the directors of the Company 
 
"Existing Ordinary Shares"            the ordinary shares of GBP0.10 each in 
                                      the capital of the Company 
 
"Fund"                                the Milk Pension Fund, a 
                                      multi-employer defined benefit 

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May 16, 2018 11:00 ET (15:00 GMT)

DJ National Milk Records Plc Notice of General -2-

                                      pension fund of which the Company and 
                                      NML were formally participating 
                                      employers 
 
"General Meeting"                     the General Meeting of the Company to 
                                      be held at 11.00 a.m. on 4 June 2018 
                                      (or any adjournment thereof) 
 
"New Articles"                        the proposed articles of association 
                                      of the Company to be adopted as the 
                                      new articles of the Company in 
                                      substitution for, and to the 
                                      exclusion of, the Current Articles by 
                                      way of the Adoption of New Articles 
 
"New Articles Model A"                the proposed form of articles of 
                                      association of the Company to be 
                                      adopted as the New Articles in the 
                                      event that the Reduction Resolution 
                                      is passed, and the Reduction of 
                                      Capital becomes effective 
 
"New Articles Model B"                the proposed form of articles of 
                                      association of the Company to be 
                                      adopted as the New Articles in the 
                                      event that the Reduction Resolution 
                                      is not passed or if the Reduction 
                                      Resolution is passed but the 
                                      Reduction of Capital does not become 
                                      effective 
 
"New Ordinary Shares"                 ordinary shares of GBP0.0025 each in 
                                      the capital of the Company which will 
                                      result from the reduction of the par 
                                      value of the Existing Ordinary Shares 
                                      to be effected by way of the 
                                      Reduction of Capital 
 
"NEX Exchange"                        NEX Exchange Limited, a recognised 
                                      investment exchange under section 290 
                                      of FSMA 
 
"NEX Exchange Growth Market"          the primary market for unlisted 
                                      securities operated by NEX Exchange 
 
"NML"                                 National Milk Laboratories Limited, a 
                                      company registered in Scotland with 
                                      company number SC145660, being a 
                                      wholly owned subsidiary of the 
                                      Company 
 
"Notice of General Meeting"           the notice convening the General 
                                      Meeting 
 
"Ordinary Shareholders"               the holders of Ordinary Shares 
 
"Ordinary Shares"                     the Existing Ordinary Shares or the 
                                      New Ordinary Shares, as the context 
                                      permits 
 
"Reduction of Capital"                the proposed cancellation of: (i) of 
                                      GBP0.0975 of the nominal value of each 
                                      issued Existing Ordinary Share; (ii) 
                                      the Deferred Shares in issue; and 
                                      (iii) the entire balance of the share 
                                      premium account 
 
"Reduction Resolution"                the Resolution to approve the 
                                      Reduction of Capital 
 
 
A copy of the circular will be available on the NMR website at www.nmr.co.uk. 
 
The Directors of the Company are responsible for the contents of this 
announcement. 
 
For further information please contact: 
 
NMR plc 
Andy Warne, Managing Director                               +44-7970-009141 
                                                            andyw@nmr.co.uk 
 
Mark Frankcom, Finance Director                             +44-7458-002444 
                                                            markf@nmr.co.uk 
 
Peterhouse Capital Limited                                 +44-20-7220-9796 
Duncan Vasey 
Mark Anwyl 
 
Blytheweigh (Financial PR)                                 +44-20-7138-3204 
Megan Ray 
Rachael Brooks 
 
Market Abuse Regulation (MAR) Disclosure 
 
The information contained within this announcement is deemed by the Company to 
constitute inside information as stipulated under the Market Abuse Regulation 
(EU) No. 596/2014. Upon the publication of this announcement via a Regulatory 
Information Service, this inside information is now considered to be in the 
public domain. 
 
 
 
END 
 

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May 16, 2018 11:00 ET (15:00 GMT)