Proposed TEP Disposal and Notice of AGM

DORIEMUS PLC ("Doriemus" or the "Company") Proposed Disposal of TEP Exchange Holdings Limited Confirmation of Existing Investing Policy and Notice of Annual General Meeting Introduction The Company announces that it is today posting a circular to shareholders("Circular") containing a notice convening an Annual General Meeting of theCompany to be held at 4.30 p.m. on 13 August 2014, at the offices of Kerman &Co LLP at 200 Strand, London WC2R 1DJ. The Circular contains proposals which include the disposal of TEP ExchangeHoldings Limited ("TEP Exchange") and confirmation of its existing investingpolicy. Proposed Disposal of TEP Exchange Holdings Limited As announced over the last few years, TEP Exchange's business of enablingweb-based deals for traded endowment policies (the "TEP Exchange Business") hasbeen operating in an environment which has been very challenging, and despitesignificant efforts to promote the TEP Exchange Business, it has struggled tocompete effectively. Investor demand for traded endowment policies ("TEPs") hasreduced substantially with the commission income generated from the TEPExchange Business being adversely affected as a result. The Company's revenuederived from the TEP Exchange Business reduced from £915,886 (in 2012) to £220,000 (in 2013) with profit/loss attributable to equity holders beingsimilarly reduced from a profit of £590,000 (in 2012) to a loss of £53,000 (in2013). The Company has reviewed its business and operations strategy and feels that,in addition to the decline in the market for TEPs over the years and its effecton the Company, the TEP Exchange Business is not strictly aligned with theCompany's Investing Policy adopted in a meeting of the Shareholders held on 15March 2013. The Company, therefore, proposes to dispose of TEP Exchange and theTEP Exchange Business and concentrate on opportunities that fall within theambit of the Investing Policy. Pursuant to a sale and purchase agreement to be entered into between theCompany and SL Investment, Close Horizons Limited and Morex Commercial (each a"Buyer" and together, the "Buyers"), the Buyers will conditionally agree toacquire the entire issued share capital of TEP Exchange from the Company for atotal consideration of £1 in cash on completion. All intercompany balancesbetween the Company and TEP Exchange will be paid off prior to the Disposal. If the Disposal is approved, it will be deemed a fundamental change of businessfor the purpose of Rule 15 of the AIM Rules for Companies and the same is,therefore, conditional on the consent of the Shareholders. The Disposal is alsoconditional upon the consent of the Financial Conduct Authority to the sale bythe Company of its shares in TEP Exchange to the Buyers (in their respectiveproportions) being obtained and such consent remaining in full force andeffect. Confirmation of Existing Investing Policy If the Disposal is approved by Shareholders and FCA consent granted, theCompany will have disposed of a substantial part of its trading business. Inthis situation, under Rule 15 of the AIM Rules, the Company will bereclassified as an Investing Company. Under the AIM Rules, Investing Companiesare required to adopt an Investing Policy that must be approved byShareholders. The Company's existing Investing Policy (as set out below) was initiallyapproved and adopted by the Shareholders at the Company's general meeting heldon 15 March 2013. It is now proposed that the Shareholders reaffirm theexisting Investing Policy (as set out below and in the Circular). Related Party Transaction SL Investment is interested in 828,032,798 Ordinary Shares comprisingapproximately 15.5 per cent. of the issued share capital of the Company makingit a substantial shareholder of the Company for the purposes of the AIM Rules.In addition, David Roxburgh is a Director of both the Company and SLInvestment. SL Investment is a party to the Sale and Purchase Agreement for thesale of shares in TEP Exchange and the Disposal and entry into the Sale andPurchase Agreement will, therefore, constitute a related party transactionunder the AIM Rules insofar as SL Investment is concerned. David Roxburgh is also a Director of Morex Commercial and the Company. As setout above, Morex Commercial is a party to the Sale and Purchase Agreement forthe sale of shares in TEP Exchange and the Disposal and entry into the Sale andPurchase Agreement will, therefore, constitute a related party transactionunder the AIM Rules insofar as Morex Commercial is concerned. The Independent Directors, having consulted with the Company's nominatedadviser, Cairn Financial Advisers LLP, consider the terms of the Sale andPurchase Agreement and the Disposal to be fair and reasonable insofar as theShareholders are concerned. Defined terms used in this announcement are taken from the Circular and set outbelow. A copy of the Circular is available on the Company's website atwww.doriemus.co.uk. Further information extracted from the Circular is set outbelow. For further additional information please contact: Doriemus plc +44 (0) 20 7440 0640Donald Strang / Hamish Harris Cairn Financial Advisers LLP +44 (0) 20 7148 7900Nominated Adviser and BrokerJames Caithie / Jo Turner / Carolyn Sansom The following has been extracted from the Circular without material adjustment: Resolutions at the Annual General Meeting Resolution 1 - Receiving and Considering the Accounts This is an ordinary resolution to receive and consider the financial statementsof the Company for the period ended 31 December 2013 together with the reportof the Directors and the report of the auditors thereon. Resolution 2 - Reappointment of Director The Board recommends the re-appointment of Mr. Grant Michael Roberts, whoretires by rotation on the date of the Annual General Meeting in accordancewith Article 84 of the Articles of Association of the Company. Mr. Roberts,being eligible, offers himself for re-appointment. Resolution 3 - Reappointment of Auditors This Resolution seeks to authorise the re-appointment of Chapman Davis LLP asauditors of the Company and to authorise the Directors to determine theirremuneration. Resolution 4 - Disposal of TEP Exchange Holdings Limited TEP Exchange is a wholly owned subsidiary of the Company and is a web-basedexchange for traded endowment policies ("TEPs"), enabling instant deals betweenmarket makers and sellers (the "TEP Exchange Business"). Over the last few years, the Company has found the markets it has beenoperating in, with respect to the TEP Exchange Business, to be very challengingand despite significant efforts to promote the TEP Exchange Business, it hasstruggled to compete effectively. Investor demand for TEPs has reducedsubstantially with the commission income generated from the TEP ExchangeBusiness being adversely affected as a result. The Company's revenue derivedfrom the TEP Exchange Business reduced from £915,886 (in 2012) to £220,000 (in2013) with profit/(loss) attributable to equity holders being similarly reducedfrom a profit of £590,000 (in 2012) to a loss of £53,000 (in 2013). The Company has reviewed its business and operations strategy and feels that,in addition to the decline in the market for TEPs over the years and its effecton the Company (as set out above), the TEP Exchange Business is not strictlyaligned with the Company's investing policy adopted in a meeting of theShareholders held on 15 March 2013. The Company, therefore, proposes to disposeof TEP Exchange (and the TEP Exchange Business) and concentrate onopportunities that fall within the ambit of the Investing Policy (see below). Pursuant to a sale and purchase agreement to be entered into between theCompany and SL Investment, Close Horizons Limited and Morex Commercial (each a"Buyer" and together, the "Buyers"), the Buyers will conditionally agree toacquire the entire issued share capital of TEP Exchange from the Company for atotal consideration of £1 in cash on completion. All intercompany balancesbetween the Company and TEP Exchange will be paid off prior to the Disposal. If the Disposal is approved, it will be deemed a fundamental change of businessfor the purpose of Rule 15 of the AIM Rules for Companies and the same is,therefore, conditional on the consent of the Shareholders. The Disposal is alsoconditional upon the consent of the Financial Conduct Authority to the sale bythe Company of its shares in TEP Exchange to the Buyers (in their respectiveproportions) being obtained and such consent remaining in full force andeffect. This Resolution therefore seeks approval of Shareholders for theDisposal at the Annual General Meeting. Resolution 5 - Confirmation of Existing Investing Policy If the Disposal is approved by Shareholders and FCA consent granted, theCompany will have disposed of a substantial part of its trading business. Inthis situation, under Rule 15 of the AIM Rules, the Company will bereclassified as an Investing Company. Under the AIM Rules, Investing Companiesare required to adopt an investing policy that must be approved byshareholders. The Company's existing Investing Policy was initially approved and adopted bythe Shareholders at the Company's general meeting held on 15 March 2013. It isnow proposed that the Shareholders reaffirm the existing Investing Policy (asset out below). The Company's investing policy is to invest in and/or acquire companies and/orprojects with clear growth potential. The geographical focus will primarily beAfrica, however, investments may also be considered in other regions to theextent that the Board considers that value opportunities exist and attractivereturns can be achieved. In selecting investment opportunities, the Board will focus on businesses thatare available at attractive valuations and hold opportunities to unlockembedded value. The Board will seek to invest in businesses where it may influence the businessat a board level, add their expertise to the management of the business, andutilise their significant industry relationships and access to finance. Theability to work alongside a strong management team to maximise returns throughrevenue growth will be something the Board will focus upon. The Company's interests in a proposed investment and/or acquisition may rangefrom a minority position to full ownership. The proposed investments may beeither quoted or unquoted and may be in companies, partnerships, earn-in jointventures, debt or other loan structures, joint ventures or direct interests inprojects. The Board may focus on investments where intrinsic value can beachieved from the restructuring of investments or merger of complementarybusinesses. The Board expects that investments will typically be held for the medium tolong term, although short term disposal of assets cannot be ruled out if thereis an opportunity to generate an attractive return for Shareholders. There is no limit on the number of projects into which the Company may invest,and the Company's financial resources may be invested in a number ofpropositions or in just one investment, which may be deemed to be a reversetakeover under the AIM Rules. The Directors intend to mitigate risk byappropriate due diligence and transaction analysis. Any transactionconstituting a reverse takeover under the AIM Rules will also requireShareholder approval. The Board considers that as investments are made, and newpromising investment opportunities arise, further funding of the Company mayalso be required. The Board has not excluded the possibility of building abroad portfolio of assets. Where the Company builds a portfolio of related assets it is possible thatthere may be cross holdings between such assets. The Company does not currentlyintend to fund any investments with debt or other borrowings but may do so ifappropriate. Investments in early stage assets are expected to be mainly in theform of equity, with debt being raised later to fund the development of suchassets. Investments in later stage assets are more likely to include an elementof debt to equity gearing. The Board may also offer new Ordinary Shares by wayof consideration as well as cash, thereby helping to preserve the Company'scash for working capital and as a reserve against unforeseen contingenciesincluding, for example, delays in collecting accounts receivable, unexpectedchanges in the economic environment and operational problems. Investments may be made in all types of assets and there will be no investmentrestrictions. The Board will conduct initial due diligence appraisals ofpotential business or projects and, where they believe further investigation iswarranted, intend to appoint appropriately qualified persons to assist. TheBoard believes it has a broad range of contacts through which they are aware ofvarious opportunities which may prove suitable, although at this point onlypreliminary due diligence has been undertaken. The Board believes its expertisewill enable it to determine quickly which opportunities could be viable and soprogress quickly to formal due diligence. The Company will not have a separateinvestment manager. The Company proposes to carry out a comprehensive andthorough project review process in which all material aspects of a potentialproject or business will be subject to rigorous due diligence, as appropriate. As an Investing Company, the Company will be required to make an acquisition oracquisitions which constitute a reverse takeover under the AIM Rules orotherwise implement its proposed Investing Policy on or before the date fallingtwelve months from the Disposal and the confirmation of the Investing Policyfailing which, the Company's Ordinary Shares would then be suspended fromtrading on AIM. In the event that the Company's Ordinary Shares are sosuspended and the Company fails to obtain Shareholders' consent to renew suchpolicy, the admission to trading on AIM would be cancelled six months from thedate of suspension. Resolution 6 - Directors' Authority to Allot Shares This is an ordinary resolution to grant the Directors the authority to allotand issue shares and grant rights to subscribe for shares in the Company forthe purposes of Section 551 of the Act up to the maximum aggregate nominalamount of £27,000 (representing 2,700,000,000 new ordinary shares of 0.001peach in the Company). This resolution replaces any existing authorities toissue shares in the Company and the authority under this resolution will expireat the conclusion of the next annual general meeting of the Company. Resolution 7 - Disapplication of Pre-emption Rights Resolution 7 proposes to dis-apply the statutory rights of pre-emption inrespect of the allotment of equity securities for cash under Section 561(1) ofthe Act. This is a special resolution authorising the Directors to issue equitysecurities as continuing authority up to an aggregate nominal amount of £27,000(representing 2,700,000,000 new ordinary shares of 0.001p each in the Company)for cash on a non pre-emptive basis pursuant to the authority conferred byResolution 6 above. The authority granted by this Resolution will expire at the conclusion of nextannual general meeting of the Company. Related Party Transaction SL Investment is interested in 828,032,798 Ordinary Shares comprisingapproximately 15.5 per cent. of the issued share capital of the Company makingit a substantial shareholder of the Company for the purposes of the AIM Rules.In addition, David Roxburgh is a Director of both the Company and SLInvestment. As set out above, SL Investment is a party to the Sale and PurchaseAgreement for the sale of shares in TEP Exchange and the Disposal and entryinto the Sale and Purchase Agreement will, therefore, constitute a relatedparty transaction under the AIM Rules insofar as SL Investment is concerned. David Roxburgh is a Director of Morex Commercial and the Company. As set outabove, Morex Commercial is a party to the Sale and Purchase Agreement for thesale of shares in TEP Exchange and the Disposal and entry into the Sale andPurchase Agreement will, therefore, constitute a related party transactionunder the AIM Rules insofar as Morex Commercial is concerned. The Independent Directors, having consulted with the Company's nominatedadviser, Cairn Financial Advisers LLP, consider the terms of the Sale andPurchase Agreement and the Disposal to be fair and reasonable insofar as theShareholders are concerned. DEFINITIONS The following definitions apply throughout this document, unless the contextrequires otherwise. "AIM Rules" the rules published by London Stock Exchange from time to time governing the admission to and operation of AIM "Annual General Meeting" the annual general meeting of the Company to be held at 4.30 p.m. on 13 August 2014, or any adjournment to that meeting "Buyers" SL Investment Management Limited (a company incorporated in England with company number 02485382), Close Horizons Limited (a company incorporated in the Isle of Man with company number 73283C) and Morex Commercial Limited (a company incorporated in England with company number 04158468) "Company" Doriemus PLC, a public limited company registered in England and Wales with registered number 03877125 "Consideration" the consideration payable pursuant to the Sale and Purchase Agreement, details of which are set out in this document "Directors" or "Board" the directors of the Company as at the date of this document "Disposal" the proposed disposal of TEP Exchange Holdings Limited pursuant to the Sale and Purchase Agreement "Financial Conduct Authority" The Financial Conduct Authority of the Unitedor "FCA" Kingdom "Independent Directors" Donald Strang, Hamish Harris and Grant Roberts "Investing Company" has the meaning described in the definition of "Investing Company" set out in the AIM Rules, that is, any AIM company which has as its primary business or objective, the investing of its funds in securities, businesses or assets of any description "Investing Policy" the existing investing policy of the Company proposed to be confirmed by the Shareholders at the Annual General Meeting and as set out in this document "Morex Commercial" Morex Commercial Limited, a company incorporated in England and Wales with company number 04158468 and with their registered address at 8 - 11 Grosvenor Court, Foregate Street, Chester, Cheshire CH1 1HG "Notice" the notice of the Annual General Meeting which forms part of this document "Ordinary Shares" ordinary shares of 0.001p each par value in the capital of the Company "Resolutions" the resolutions set out in the Notice at the end of this document "Shareholders" holders of the Ordinary Shares "SL Investment" SL Investment Management Limited, a company incorporated in England and Wales with company number 02485382 and registered address at 8 - 11 Grosvenor Court, Foregate Street, Chester, Cheshire CH1 1HG "TEP Exchange" TEP Exchange Holdings Limited, a company incorporated in England and Wales with company number 08783474, which is a wholly owned subsidiary of the Company