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Sunrise Diamonds plc

Explanatory Notes to the Notice of Annual General Meeting


6(d) Redeemable shares Under the old law, if a company wished to issue redeemable shares, it needed to include in its articles the terms and manner of redemption. The Companies Act 2006 enables directors to determine such matters instead provided they are so authorised by the articles. The New Articles contain such an authorisation. The Company has no plans to issue redeemable shares but if it did so the directors would need shareholders’ authority to issue new shares in the usual way.

6(e) Authority to purchase own shares, consolidate and sub-divide shares, and reduce share capital Until 1 October 2009 a company required specific enabling provisions in its articles to purchase its own shares, to consolidate or sub-divide its shares and to reduce its share capital or other undistributable reserves as well as shareholder authority to undertake the relevant action. The Current Articles include these enabling provisions. Under the Companies Act 2006 a company will only require shareholder authority to do any of these things and it will no longer be necessary for articles to contain enabling provisions. Accordingly the relevant enabling provisions have not been included in the New Articles.

6(f) Provision for employees on cessation of business The Companies Act 2006 provides that the powers of the directors of a company to make provision for a person employed or formerly employed by the company or any of its subsidiaries in connection with the cessation or transfer to any person of the whole or part of the undertaking of the company or that subsidiary, may only be exercised by the

directors if they are so authorised by the company’s articles or by the company in general meeting. The New Articles provide that the directors may exercise this power.

6(g) Use of seals Under the old law a company required authority in its articles to have an official seal for use abroad. Such authority is no longer required. Accordingly, the relevant authorisation has not been included in the New Articles.

For consistency with the Companies Act 2006 regarding changes to the execution of documents by companies, the New Articles provide an alternative option for affixing a seal. Under the New Articles, when the seal is affixed to a document it may be signed by one authorised person in the presence of a witness, whereas previously the

requirement was for signature by either a director and the secretary or two directors or such other person or persons as the directors may approve.

6(h) Suspension of registration of share transfers The Current Articles permit the directors to suspend the registration of transfers. Under the Companies Act 2006 share transfers must be registered as soon as practicable. The power in the Current Articles to suspend the registration of transfers is inconsistent with this requirement. Accordingly, this power has not been included in the New Articles.

6(i) Borrowing powers The Current Articles contain restrictions on the directors borrowing powers, and the New Articles remove these restrictions in order that the Company and the Directors have greater flexibility.

6(j) General Generally, the opportunity has been taken to update some of the language and drafting in the New Articles with the intention of making the drafting of some of the existing provisions more clear.



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