GOING FOR Dairy Crest Group plc Notice of Twentieth Annual General Meeting THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to what action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000. If you have already sold or otherwise transferred all of your Dairy Crest shares, please send this document as soon as possible to the purchaser or transferee, or to the stockbroker, bank or agent through whom the sale or transfer was effected for delivery to the purchaser or transferee.
Dear Shareholder The Annual General Meeting ( AGM ) of Dairy Crest Group plc (the Company ) will be held at Eversheds LLP, One Wood Street, London EC2V 7WS, on Tuesday 19 July 2016 starting at 3.30 pm. You are welcome to join us from 3.00 pm when tea and coffee will be served. Resolutions The Notice of Meeting which follows this letter contains the resolutions on which we will be asking you to vote. Apart from resolution 16, you will recognise all of the resolutions from last year. Disapplication of pre-emption rights: In 2015 the Pre-Emption Group (representing the Investment Association and the National Association of Pension Funds) published a revised statement of principles for the disapplication of pre-emption rights. In its revised statement the Pre-Emption Group retained the principle that a general authority for the disapplication of pre-emption rights over the equivalent of 5% of a company s nominal ordinary issued share capital should be treated as routine. In prior years the Directors have sought and received such a general authority. This year the general authority is sought under resolution 15. The Pre-Emption Group s revised statement also recognised that provided the criteria set out in its statement are met, the disapplication of pre-emption rights over the equivalent of a further 5% of the nominal ordinary issued share capital of a company should also be viewed as routine. In light of the revised statement of principles we have decided to seek your authority for the disapplication of pre-emption rights over the equivalent of a further 5% of the nominal ordinary issued share capital of the Company. Resolution 16 sets out the authority which the Directors are seeking in that regard. The combined authorities sought under resolutions 15 and 16, if approved by shareholders, would raise the Directors authority to disapply pre-emption rights to the Pre-Emption Group s new 10% threshold. Your Directors confirm, consistent with the revised statement of principles, that the additional 5% envisaged by resolution 16 would only be used in the limited circumstances prescribed by the Pre-Emption Group. Full details are set out in the notes to resolutions 15 and 16 on page 7 of the Notice of Meeting. Poll Voting on all resolutions at the AGM will be conducted by way of a poll. Final Dividend The Directors propose a final dividend of 16.0 pence per ordinary share for the year ended 31 March 2016. If approved, the recommended final dividend will be paid on 11 August 2016 to all shareholders who are on the register of members at the close of business on 8 July 2016. Recommendation Your Directors believe that all of the resolutions to be considered at the AGM are in the best interests of the Company and its shareholders as a whole. They recommend that you vote in favour of the resolutions, as they intend to in respect of their own beneficial holdings. Action to be taken Where this circular is posted in hard copy to shareholders, a Form of Proxy for the resolutions to be proposed at the AGM is enclosed. Please sign and return the Form of Proxy in accordance with the directions printed on it as soon as possible. Forms of Proxy may also be completed on the internet by logging on to www.dairycrestshares.com or if you hold your shares in CREST, via the CREST system. You will need your investor code which is printed on the hard copy Form of Proxy (where enclosed) and on your share certificate. Completion and return of a Form of Proxy whether in hard copy, on the internet or via CREST will not prevent you from attending the AGM and voting in person should you wish to do so. However you submit it, your appointment of a proxy must be received by the Company s registrars, Capita, not later than 48 hours before the time appointed for the AGM (by 3.30 pm on Friday 15 July 2016). The results of the AGM will be announced via a Regulatory Information Service and on the Company s website, www.dairycrest.co.uk, as soon as possible after the meeting. I look forward to seeing you. Yours faithfully Stephen Alexander Chairman (Non-executive) 2 Dairy Crest Notice of Annual General Meeting 2016
DAIRY CREST GROUP plc NOTICE OF ANNUAL GENERAL MEETING 2016 NOTICE IS HEREBY GIVEN THAT the Twentieth AGM of Dairy Crest Group plc will be held at Eversheds LLP, One Wood Street, London EC2V 7WS on Tuesday 19 July 2016 at 3.30 pm for the following purposes: ORDINARY BUSINESS To consider and, if thought fit, pass the following resolutions which will be proposed in the case of resolutions 1 to 11, as ordinary resolutions (shareholders should note that resolution 2 is an advisory vote only) and, in the case of resolution 12, as a special resolution: Ordinary resolutions Report and Accounts for the year ended 31 March 2016 1. That the audited Report and Accounts of the Company for the year ended 31 March 2016 together with the Strategic Report, Directors Report and Auditor s Report on those accounts be received and adopted. Approval of the Directors Remuneration Report (excluding the Directors Remuneration Policy) 2. That the Directors Remuneration Report (excluding the Directors Remuneration Policy) set out on pages 41 to 42 and 48 to 60 of the Annual Report and Accounts for the year ended 31 March 2016 be approved. Final Dividend 3. That a final dividend of 16.0 pence per ordinary share in respect of the year ended 31 March 2016 be declared and be paid on 11 August 2016 to shareholders on the register of members at the close of business on 8 July 2016. Re-election of Executive Directors 4. That Mark Allen be re-elected as a Director of the Company. 5. That Tom Atherton be re-elected as a Director of the Company. Re-election of Non-executive Directors 6. That Stephen Alexander be re-elected as a Director of the Company. 7. That Andrew Carr-Locke be re-elected as a Director of the Company. 8. That Sue Farr be re-elected as a Director of the Company. 9. That Richard Macdonald be re-elected as a Director of the Company. Appointment and Remuneration of the Auditor 10. That Ernst & Young LLP be re-appointed as Auditor of the Company, to hold office until the conclusion of the next general meeting at which accounts are laid. 11. That the Directors be authorised to determine the Auditor s remuneration. SPECIAL RESOLUTION Notice Period for General Meetings 12. That, as permitted by section 307A of the Companies Act 2006 ( 2006 Act ), any general meeting of the Company other than an annual general meeting may be called on not less than 14 clear days notice. SPECIAL BUSINESS To consider and, if thought fit, pass the following resolutions which will be proposed in the case of resolutions 13 and 14 as ordinary resolutions and, in the case of resolutions 15 to 17 as special resolutions: ORDINARY RESOLUTIONS Political Donations and Expenditure 13. That the Company and all companies that are its subsidiaries at any time during the period for which this resolution is effective be authorised to make donations to political parties, to independent election candidates and to political organisations and to incur political expenditure (in each case as defined in Part 14 of the 2006 Act) not exceeding 50,000 in aggregate during the period of one year beginning with the date of the 2016 AGM. Renewal of Directors Authority to Allot Shares 14. That: 14.1 the authority conferred on the Directors by article 15 of the Company s articles of association ( Articles ) to exercise all powers of the Company to allot relevant securities be renewed up to an aggregate nominal value of 11,727,240; and 14.2 the Board be and is hereby generally and unconditionally authorised to exercise all powers of the Company to allot equity securities (as defined in the 2006 Act) ( Securities ) in connection with a rights issue, in favour of ordinary shareholders, where the Securities respectively attributable to the interests of all ordinary shareholders are proportionate (as nearly may be) to the respective numbers of ordinary shares held by them, up to an additional aggregate nominal amount of 11,727,240; PROVIDED THAT: this authority shall expire at the end of the next AGM of the Company (or, if earlier, at the close of business on 31 July 2017) save that the Company may before such expiry make an offer or agreement which would or might require Securities to be allotted after such expiry, and the Dairy Crest Notice of Annual General Meeting 2016 3
DAIRY CREST GROUP plc NOTICE OF ANNUAL GENERAL MEETING 2016 CONTINUED Board may allot Securities in pursuance of such an offer or agreement as if the authority conferred hereby had not expired. The section 551 amount for the period is 23,454,480. SPECIAL RESOLUTIONS Disapplication of Pre-emption Rights 15. That if resolution 14 is passed, the Directors be authorised to allot Securities for cash under the authority given by that resolution and/or to sell ordinary shares held by the Company as treasury shares for cash as if section 561 of the 2006 Act did not apply to any such allotment or sale, such authority to be limited to the allotment of Securities or sale of treasury shares up to a nominal amount of 1,759,085; such authority to expire at the end of the next AGM of the Company (or, if earlier, at the close of business on 31 July 2017) but, in each case, prior to its expiry the Company may make offers, and enter into agreements, which would, or might, require Securities to be allotted (and treasury shares to be sold) after the authority expires and the Directors may allot Securities (and sell treasury shares) under any such offer or agreement as if the authority had not expired. 16. That if resolution 14 is passed, the Board be authorised in addition to any authority granted under resolution 15 to allot Securities for cash under the authority given by that resolution and/or to sell ordinary shares held by the Company as treasury shares for cash as if section 561 of the 2006 Act did not apply to any such allotment or sale, such authority to be: (A) limited to the allotment of Securities or sale of treasury shares up to a nominal amount of 1,759,085; and (B) used only for the purposes of financing (or refinancing, if the authority is to be used within six months after the original transaction) a transaction which the Board of the Company determines to be an acquisition or other capital investment of a kind contemplated by the Statement of Principles on Disapplying Pre-Emption Rights most recently published by the Pre-Emption Group prior to the date of this notice; such authority to expire at the end of the next AGM of the Company (or, if earlier, at the close of business on 31 July 2017) but, in each case, prior to its expiry the Company may make offers, and enter into agreements, which would, or might, require Securities to be allotted (and treasury shares to be sold) after the authority expires and the Board may allot Securities (and sell treasury shares) under any such offer or agreement as if the authority had not expired. Company s Authority to Purchase its Own Shares 17. That, pursuant to the Articles, the Company be generally and unconditionally authorised, in accordance with the 2006 Act to make market purchases of ordinary shares of 25 pence each in the capital of the Company ( Ordinary Shares ) on such terms and in such manner as the Directors of the Company may from time to time determine PROVIDED THAT: the maximum number of Ordinary Shares hereby authorised to be acquired is 14,072,690 (being approximately 10 per cent of the current issued Ordinary Shares of the Company); the minimum price which may be paid for any such Ordinary Share is 25 pence (exclusive of expenses and appropriate taxes); the maximum price (exclusive of expenses and appropriate taxes) which may be paid for any such Ordinary Share shall be the higher of (i) 5% above the average of the middle market values for an Ordinary Share as taken from the London Stock Exchange Daily Official List for the five business days immediately preceding the date of purchase, and (ii) an amount equal to the higher of the price of the last independent trade and current independent bid as derived from the London Stock Exchange Trading System; and the authority hereby conferred shall expire at the end of the next AGM of the Company (or, if earlier, at the close of business on 31 July 2017) (except in relation to a purchase of Ordinary Shares, the contract for which was concluded before such time and which will or may be executed wholly or partly after such time as if the authority conferred hereby had not expired). By order of the Board Robin Miller Company Secretary 15 June 2016 Registered Office: Claygate House, Littleworth Road, Esher, Surrey KT10 9PN 4 Dairy Crest Notice of Annual General Meeting 2016
EXPLANATORY NOTES 1. Entitlement to attend and vote A member entitled to attend and vote at the meeting is also entitled to appoint one or more proxies to attend and vote instead of him/her. A proxy need not be a member of the Company. 2. Proxies You may register your appointment of a proxy to attend the meeting on your behalf: (i) electronically by visiting www.dairycrestshares.com; (ii) for CREST members, using the CREST electronic proxy appointment service; or (iii) returning a hard copy form of proxy (where supplied) in the post. To be effective, the form of proxy and any authority under which it is executed (or a certified copy of such authority) or electronic appointment of a proxy (see below) must reach the offices of the Company s registrar, Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham BR3 4TU not later than 3.30 pm (UK time) on Friday, 15 July 2016 or, if the meeting is adjourned, not less than 48 hours (excluding any part of a day which is a non-working day) before the time of the adjourned meeting. Completion and return of the form of proxy will not preclude shareholders from attending and voting in person at the meeting. 3. If two or more valid forms of proxy are delivered in respect of the same share, the one which was delivered last (regardless of its date or the date of its execution) will be valid. 4. The right to appoint a proxy does not apply to persons whose shares are held on their behalf by another person and who have been nominated to receive communications from the Company in accordance with section 146 of the 2006 Act ( Nominated Persons ). Nominated Persons may have a right under an agreement with the registered shareholder who holds the shares on their behalf to be appointed (or to have someone else appointed) as a proxy. Alternatively, if Nominated Persons do not have such a right, or do not wish to exercise it, they may have a right under such agreement to give instructions to the person holding the shares as to the exercise of voting rights. 5. Shareholders who prefer to register the appointment of their proxy electronically via the internet can do so through the website at www. dairycrestshares.com where full instructions on the procedure are given. A proxy appointment made electronically will not be valid if sent to any address other than that provided or, if received after 3.30 pm on 15 July 2016 or, if the meeting is adjourned, if received less than 48 hours (excluding any part of a day which is a non-working day) before the time of the adjourned meeting. Please note that any electronic communication found to contain a computer virus will not be accepted. 6. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the meeting and any adjournment(s) thereof by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed (a) voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a CREST Proxy Instruction ) must be properly authenticated in accordance with Euroclear s specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer s agent (RA10) by the time stated above for the receipt of forms of proxy. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed (a) voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. The CREST Manual can be reviewed at www.euroclear.com. 7. Right of members to vote The right of members to vote at the AGM is determined by reference to the register of members. In accordance with Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those shareholders whose names appear in the register of members by close of business on Friday, 15 July 2016 or, if the meeting is adjourned, at close of business on the date which is two days before the time of the adjourned meeting, excluding non-business days, (the Specified Time ) shall be entitled to attend and vote at the meeting in respect of the number of shares registered in their name at that time. Changes to the register of members after the Specified Time shall be disregarded in determining the rights of any person to attend or vote at the meeting. 8. Individuals will be entitled to attend and vote at the meeting only if their own name appears on the share register or, where the shares are held in a different trading or registration name, on production of written evidence of their authority to act as that shareholder s representative. A partnership, the name of which is entered in the register of members, may, by any two persons purporting to be partners in the partnership, authorise a person to act as its representative at the meeting. A company or other institution may by prior written authorisation confirm the appointment of a corporate representative to attend the meeting on its behalf. Such a representative shall be entitled to exercise the same rights as an individual member in respect of the shares to which the authorisation relates. Any company or partnership appointing a representative to attend the meeting is requested to notify the Company s registrar of such appointment in writing not later than 3.30 pm (UK time) on Friday, 15 July 2016 or, if the meeting is adjourned, not less than 48 hours (excluding any part of a day which is a non-working day) before the time of the adjourned meeting. 9. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares. 10. Voting rights The total number of ordinary shares of 25 pence in issue as at 18 May 2016, the last practicable day before printing this document was 140,726,919 ordinary shares and the total level of voting rights was 140,726,919. No shares were held in treasury. 11. Only individual shareholders whose names appear on the register, their proxies or representatives duly authorised in the above manner will be permitted to attend and vote at the meeting. 12. Website A copy of this notice and other information required by section 311A of the 2006 Act can be found at www.dairycrest.co.uk and can be accessed from the date of this notice and for the following ten years. 13. Right to ask questions Any member attending the meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the meeting but no such answer need be given if (i) to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information; (ii) the answer has already been given on a website in the form of an answer to a question; or (iii) it is undesirable in the interests of the Company or the good order of the meeting that the question is answered. Dairy Crest Notice of Annual General Meeting 2016 5
EXPLANATORY NOTES CONTINUED 14. Shareholder requests Under section 527 of the 2006 Act, members meeting the threshold requirement set out in that section have the right to require the Company to publish on a website a statement setting out any matter relating to (i) the audit of the Company s Annual Report and Financial Statements (including the Auditor s Report and the conduct of the audit) that are to be laid before the AGM; or (ii) any circumstance connected with an Auditor of the Company ceasing to hold office since the previous meeting at which Annual Report and Financial Statements were laid in accordance with section 437 of the 2006 Act. The Company may not require the shareholders requesting any such website publication to pay its expenses in complying with sections 527 or 528 of the 2006 Act. It must forward the statement to the Company s Auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the AGM includes any statement that the Company has been required under section 527 of the 2006 Act to publish on a website. A member or members wishing to request publication of such a statement on the Company s website must send the request to the Company using one of the following methods: in hard copy form to the Company Secretary, Dairy Crest Group plc, Claygate House, Littleworth Road, Esher KT10 9PN the request must be signed; or by fax to +44 (0)1372 472283 marked for the attention of the Company Secretary the request must be signed. Whichever form of communication is chosen, the request must either set out the statement in full or, if supporting a statement sent by another member, clearly identify the statement which is being supported, and be received by the Company at least one week before the AGM. 15. Directors service agreements and letters of appointment Copies of Executive Directors service agreements and Non-executive Directors letters of appointment will be available for inspection at the Registered Office of the Company during normal business hours, Monday to Friday (public holidays excepted) from the date of this notice until 19 July 2016, and at Eversheds LLP, 1 Wood Street, London EC2V 7WS from 3.15 pm on 19 July 2016 until the conclusion of the AGM. Resolution 1 Report and Accounts for the year ended 31 March 2015 The Directors of the Company have a duty to present (to shareholders in general meeting) the annual accounts together with the Strategic Report, Directors Report and the Report of the Auditor. The Auditor s Report can be found at pages 65 to 68 of the Annual Report. Resolution 2 Approval of the Directors Remuneration Report (excluding the Directors Remuneration Policy) As required by the 2006 Act, the Board has presented its Directors Remuneration Report (excluding the Directors Remuneration Policy) to shareholders in the Annual Report, which may be found on pages 41 to 42 and pages 48 to 60. The 2006 Act requires the Company to put a resolution to shareholders in a general meeting to approve the Directors Remuneration Report (excluding the Directors Remuneration Policy). The Report includes details of the remuneration outcomes for Directors in the year ended 31 March 2016 and how the Directors Remuneration Policy will be operated in the year ended 31 March 2017. The vote on this resolution is an advisory one and a Director s entitlement to remuneration is not conditional upon this resolution being passed. Resolution 3 Final Dividend The Directors recommend that a final dividend of 16.0 pence per share be paid on 11 August 2016 to shareholders whose names appear on the register of members at the close of business on 8 July 2016. Payment of the final dividend will bring the total dividend for the year ended 31 March 2016 to 22.1 pence per share. Resolutions 4 to 9 Re-election of Directors The Articles specify that all Directors are subject to re-election by shareholders at each AGM. All of the current Directors are standing for re-election to the Board. Biographies for them are set out at pages 28 to 29 of the Company s Annual Report. Having regard to the roles that they perform and the individual input and contribution they make, the Board has concluded that each candidate s performance more than justifies nomination for re-election by shareholders. Resolutions 10 and 11 Re-appointment and Remuneration of Auditors At the AGM on 14 July 2015, the shareholders re-appointed Ernst & Young LLP as auditor of the Company to hold office until the conclusion of the next general meeting at which accounts are laid before the members. Resolutions 10 and 11 propose to re-appoint Ernst & Young LLP as Auditor of the Company and authorise the Directors to determine the Auditor s remuneration. Resolution 12 Notice of General Meetings The notice period for general meetings of the Company is 21 days unless shareholders approve a shorter period, which cannot be less than 14 clear days. Shareholders approved such a resolution at last year s AGM and accordingly, the Company is currently able to call general meetings (other than annual general meetings) on 14 clear days notice. The Company would like to preserve this ability. In order to be able to do so, the Company s shareholders must approve the calling of such meetings on not less than 14 clear days notice. Resolution 12 seeks such approval until the Company s next AGM, (when it is anticipated that a similar resolution will be proposed). The shorter notice period would not be used as a matter of routine for such meetings, but only where the flexibility is merited by the business of the meeting and is thought to be to the advantage of shareholders as a whole and the matter to be considered is time sensitive. In addition, if the Company wishes to hold a meeting on at least 14 days notice rather than on at least 21 days notice, it must offer the facility for shareholders to vote by electronic means, accessible to all shareholders. This condition is met if there is a facility to appoint a proxy by means of a website. Resolution 13 Political Donations and Expenditure Resolution 13 will be proposed as an ordinary resolution to authorise the making of political donations and political expenditure. Part 14 of the 2006 Act requires companies to obtain the approval of shareholders before any political donations or expenditure can be made. Although the Group does not make what, prior to the implementation of the 2006 Act, were usually regarded as political donations, it may incur expenditure on such items as sponsorship or attendance at political discussions and business liaison events organised by political parties within the EU on a non-partisan basis in order to ensure the issues and concerns of the Group are considered and addressed. Some of these activities may, as a result of the breadth of drafting used in the 2006 Act, be covered by the extended definitions in the 2006 Act and this resolution is being proposed to ensure that the Group remains within the law in carrying out these activities. The policy of not giving any cash contribution to political parties or independent election candidates will continue. Resolution 14 Renewal of Directors Authority to Allot Shares At the AGM held on 14 July 2015, shareholders passed a resolution giving the Directors authority, in accordance with article 15 of the Articles to allot relevant securities, within the meaning of section 551 of the 2006 Act. The Company proposes to renew this authority to allow the Directors to allot relevant securities up to an aggregate nominal value of 11,727,240 representing approximately one third of the issued ordinary shares of the Company as at 18 May 2016. The Directors have no present intention of exercising this authority other than to satisfy the exercise of options. In addition, the second part of the resolution, 14.2, seeks authority for the Directors to allot equity securities within the meaning of section 560 of the 2006 Act by way of pre-emptive rights issues up to an additional aggregate nominal amount of 11,727,240, representing a further third of the current issued share capital of the Company (excluding treasury shares). In accordance with the Investment Management Association Allotment Guidelines ( Guidelines ) if the Company uses any of the additional one third authority conferred on the Board by resolution 14.2, the directors will all stand for re-election at the next AGM following the decision to exercise such authority. The Articles require all Directors 6 Dairy Crest Notice of Annual General Meeting 2016
to retire from office at each AGM. Accordingly all Directors submit themselves for re-election each year, notwithstanding the requirements of the Guidelines. The section 551 amount referred to in resolution 14 represents two thirds of the issued ordinary shares of the Company as at 18 May 2016. For the avoidance of doubt, the authority, if granted under this resolution, shall apply in substitution for all previous authorities pursuant to section 551 of the 2006 Act. At 18 May 2016, the latest practical day before printing this document, no shares were held in treasury. Resolutions 15 and 16 Disapplication of Pre-emption Rights Resolutions 15 and 16 are special resolutions which, if passed by shareholders, will enable Directors to allot equity securities (as defined by section 560 of the 2006 Act) or to sell treasury shares for cash without first offering those shares to existing shareholders in proportion to their existing holdings. In March 2015, The Pre-Emption Group published a revision of its Statement of Principles. In addition to restating the customary 5% limit on the issuance of shares for cash on a non-preemptive basis, the 2015 Statement of Principles introduced greater flexibility for companies to undertake non-pre-emptive issues for cash in connection with acquisitions and specified capital investments. This relaxation allows companies the opportunity to finance expansion opportunities as and when they arise. The 2015 Statement of Principles provides that a company may seek power to issue on a non-pre-emptive basis for cash shares representing: (i) no more than 5% of the company s issued ordinary share capital in any one year; and (ii) no more than an additional 5% of the company s issued ordinary share capital provided that such additional power is only used in connection with an acquisition or specified capital investment which is announced contemporaneously with the issue. The 2015 Statement of Principles defines a specified capital investment as one or more specific capital investment related uses for the proceeds of an issuance of equity securities, in respect of which sufficient information regarding the effect of the transaction on the listed company, the assets the subject of the transaction and (where appropriate) the profits attributable to them is made available to shareholders to enable them to reach an assessment of the potential return. Items that are regarded as operating expenditure rather than capital expenditure will not typically be regarded as falling within the term specified capital investment. Last year the Directors sought authority under only one resolution. At the AGM held on 14 July 2015 shareholders passed a resolution giving the Directors authority under article 16 of the Articles to disapply the preemption requirements for allotments of equity securities up to 1,722,097. For the purposes of section 560(3) of the 2006 Act, allotments of equity securities includes the sale of treasury shares. This year the Directors are seeking two separate powers to disapply pre-emption rights. As in previous years, if resolution 15 is passed by shareholders, it will permit the Directors to allot ordinary shares on a non-pre-emptive basis and for cash (otherwise than in connection with a rights issue or similar pre-emptive issue) up to a maximum nominal amount of 1,759,085. This amount represents approximately 5% of the company s issued ordinary share capital as at 18 May 2016. Resolution 15 will permit the Directors to allot any such shares for cash on a nonpre-emptive basis in any circumstances (whether or not in connection with an acquisition or specified capital investment). Resolution 16, if passed by shareholders, will give the Directors an additional power to allot ordinary shares on a non-pre-emptive basis and for cash up to a further maximum nominal amount of 1,759,085. This amount represents approximately 5% of the company s issued ordinary share capital as at 18 May 2016. The Directors confirm that they intend to use any power conferred by Resolution 16 only in connection with an acquisition or a specified capital investment which is announced contemporaneously with the issue or which has taken place in the preceding six month period and is disclosed in the announcement of the issue. The Directors also confirm their intention to follow the provisions of the Pre-Emption Group s 2015 Statement of Principles regarding cumulative usage of authorities within a rolling three year period. Those Principles provide that a company should not issue shares for cash (other than to satisfy share scheme requirements) representing more than 7.5% of the company s issued share capital in any rolling three year period, other than to existing shareholders, without prior consultation with shareholders. This limit excludes any ordinary shares issued pursuant to a general disapplication of pre-emption rights in connection with an acquisition or specified capital investment. The powers granted by resolutions 15 and 16, if passed, will expire at close of business on 31 July 2017 or, if earlier, the end of the next AGM of the Company. Resolution 17 Company s Authority to Purchase its Own Shares The authority for the Company to make market purchases (within the meaning of section 693(4) of the 2006 Act) of its issued share capital, granted last year, will expire at the close of the AGM. This resolution seeks renewal of that authority, pursuant to article 9.2 of the Articles and in accordance with section 701 of the 2006 Act. Again the authority sought is limited to a maximum number of shares, which amounts to approximately 10% of the Company s current issued share capital. The authority has not been used to date and would only be used if the Directors believed that a repurchase of shares would result in an increase in earnings per share and would be in the best interests of shareholders as a whole. The Company may hold any shares repurchased under this authority as treasury shares. Recommendation The Directors believe that the resolutions are in the best interests of the Company and its shareholders as a whole and unanimously recommend that shareholders should vote in favour of all resolutions. Dairy Crest Group plc Claygate House Littleworth Road Esher Surrey KT10 9PN Company No: 3162897 Dairy Crest Notice of Annual General Meeting 2016 7
Dairy Crest Group plc Claygate House Littleworth Road Esher Surrey KT10 9PN Company No: 3162897 Visit our website at www.dairycrest.co.uk http://www.dairycrest.co.uk/investors