Year ended 31 March 2024

Annual Report 2024

Caledonia Investments plc Annual Report 2024

Introduction

1 Performance

2 At a glance

11 Strategic report

12 Chair’s statement

14  ChiefExecutiveOfficer’sreport

18  Howwecreatevalue

20 Key performance indicators

22  Investmentreview

26 Public Companies

30  PrivateCapital

34 Funds

38  Financialreview

42 Sustainability

57 Risk management

62  Goingconcernandviability

65 Corporate governance

66 Board of directors

68 Governanceframework

70  Corporategovernancereport

74  Section172statement

80 NominationCommitteereport

82  AuditandRiskCommitteereport

88 GovernanceCommitteereport

90 Directors’remunerationreport

109 Directors’ report

113 Responsibility statements

115 Financial statements

116 Independent auditor’s report

124 Financial statements

128 Significantaccountingpolicies

133 Notestothefinancialstatements

152 Other information

152 Company performance record

153 Glossaryoftermsandalternative

performance measures

155 Investmentssummary

156 Valuationmethodology

158 Informationforinvestors

159 Directorsandadvisers

Caledonia is a FTSE 250 self-managed

investment trust company with a long

track record of delivering consistent

returns and progressive annual

dividend payments to shareholders.

Our aim is to generate long-term

compounding real returns that outperform

inflation by 3%-6% over the medium

to long term, and the FTSE All-Share

index over 10 years.

We are a long-term investor and hold

investments in both listed and private

markets across three pools: Public

Companies, Private Capital and Funds.

Each has a strategic allocation of capital,

investment strategy and target return.

The result is a well-balanced diversified

portfolio of investments with a

global reach.

Welcome to Caledonia

Sources: Caledonia Investments plc (‘Caledonia’) © Caledonia 2024 and FTSE International Limited

(‘FTSE’) © FTSE 2024. Caledonia Investments, Time Well Invested and the sealion guardant are

registered trademarks. ‘FTSE®’ is a trademark of the London Stock Exchange Group companies

and is used by FTSE International Limited under licence. All rights in the FTSE indices and/or

FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability

for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further

distribution of FTSE Data is permitted without FTSE’s express written consent.

The images displayed throughout the annual report are a

selection of the following:

Charities supported by The Caledonia Investments Charitable

Foundation

The Caledonia office and artefacts on display from the Cayzer

Family archive

Employees of Caledonia, either in the central London office or

on an offsite strategy day

Images relating to Caledonia portfolio companies

Performance

Highlights

"Caledonia’s long-standing philosophy of investing in high-quality, well-

managed companies, with a truly long-term view, continues to serve us well.

All three investment pools have contributed to our growth over the past year,

despite a background of continuing macro economic and geopolitical uncertainty,

and we are delighted to be increasing our dividend for the 57

consecutive year."

Mat Masters

ChiefExecutiveOfficer

£3.0bn

Net asset value (NAV)

(31March2023:£2.8bn)

70.4p

Dividend per share

(31March2023:67.4p)

3,280p

Share price

(31March2023:3,390p)

7.4%

NAV per share total return

(31March2023:5.5%)

4.5%

Dividend growth

(31March2023:4.0%)

1.AlternativePerformanceMeasure–seepage153fordetails.

(1.2)%

Total shareholder return

(31March2023:2.4%)

Strong consistent long-term

NAV growth

NAV total return growth since 2004 Annual dividend / share (p)

57 consecutive years of

dividend increases

APM

Strategic report Corporate governance Financial statements Other information

Introduction

Time well invested

We are investors, not traders, driven by

fundamentals, not trends. We invest time to make

confident, well-balanced compounding investments

and build rewarding partnerships.

At a glance

What differentiates us

Expert

team

Ourteamhasdeep

knowledge of the

companies and sectors

inwhichweinvest.Our

culture is centred around

acollectionofvalues

that shape our approach

toeveryaspectofinvesting:

insightful,supportive,

responsible,considered

andlong-term.

Investment

process

We build rewarding

relationships and a

deep understanding of

ourinvestmentsthat

aligns with our risk

appetite,withESG

factorsembedded.

Long-term

investors

Webuytohold,investingin

high-quality companies with

strong market positions and

fundamentals,alongside

investmentsinfundswith

trackrecordsofsuccess.

Alignment

As a self-managed

vehicle,weinvestfromthe

balancesheet,ensuringour

interests are wholly aligned

withourshareholders.

History

Caledonia traces its history back to the Cayzer

family’s shipping business, founded in the late 1800s.

Towards the end of the boom in shipping, Caledonia

was converted into a broader investment holding

company, and later to an investment trust. The

Cayzer family remain supportive shareholders

and the family’s long-term investment approach

underpins how Caledonia is run today.

2 Caledonia Investments plc Annual Report 2024

We invest via

three pools

Public Companies,

Private Capital and

Funds. Each has a

strategic allocation

of capital, investment

strategy and target

return. The result

is a well-balanced

diversified portfolio

of investments with

global reach.

Geography

SectorNAV

Annualised performance

Today

With net assets of £3bn, Caledonia has a

long track record of delivering consistently

strong returns and progressive annual

dividend payments. We seek to generate

long-term compounding real returns for

shareholders, targeting total returns that

outperform inflation by 3%-6%, and the

FTSE All-Share index over 10 years.

2.Headquartered

3.IncludesAIR-servEuropeand

CookeOptics

1.Consumer Prices Index including owner

occupiers’housingcosts(‘CPIH’)

PublicCompanies 32%

PrivateCapital 28%

Funds 31%

Cashandother 9%

NorthAmerica 45%

UK&ChannelIslands 34%

Asia 13%

Europe 8%

10%

CPIH

Over 10 years

Caledonia NAVTR

Caledonia Share Price TR

FTSE All-Share TR

Target

return

+10%

+9%

+6%

+4%

Industrials

 27%

Consumerdiscretionary

 12%

Informationtechnology 12%

Fundsoffunds 11%

Financials 9%

Healthcare 8%

Materials 7%

Consumerstaples 6%

Communicationservices

 2%

Othersectors 6%

Strategic report Corporate governance Financial statements Other information

Introduction

We invest in high-quality businesses where long-term ownership will be rewarded.

The companies in our portfolio typically have similar characteristics, including:

One investment team across two strategies, with the same research methodology and

operational discipline:

Capital portfolio

Unconstrainedinvestmentsinwell-

managed,publiclyquotedcompanies,

heldforthelongterm.Weselectmature,

enduringbusinessesthathaveasignificant

presenceintheirmarket,andwhereassets

consistently produce strong returns on

capital,enablingreinvestmentandgrowth.

TheIncomeportfolioisconstructed

using similar quality criteria as the Capital

portfolio:weinvestselectivelyinmature,

long-term businesses with resilient

businessmodels,andthecapacityand

management culture to pay sustainable

dividends.Ourobjectiveistodelivera7%

annualreturn,withaninitialyieldof3.5%

basedonthecostofinvestment.

Income portfolio

Public Companies

Strategic allocation

30%-40%

of net assets

10% p.a.

Total return target

7% p.a.

Total return target

Actual

32%

of net assets

Strong market

position

Capable management

closely aligned with

long-term investors

Profitable with good

and sustainable returns

on capital

Underlying growth

and pricing power

£950m of NAV

30 companies

10%

15%

Over 1 year

Total Public Companies pool

Over 3 years

Over 5 years

Over 10 years

Capital Portfolio Income Portfolio

12%

11%

14%

10%

13%

10%

Annualised performance – total return

At a glance (continued)

Further detail

Turn to page 26

4 Caledonia Investments plc Annual Report 2024

Case study

Oracle is the world’s largest database

management company.

£26m

Weighted average cost

17% p.a.

Return since initial

investment (£)

2014

Date of initial investment

Information

technology

Sector

£83m

Valuation at 31 March 24

Original investment thesis

• an attractive risk/return dynamic with a reasonable entry price into a cash

generative company benefiting from high levels of recurring profit providing

downside protection

• strong possibility of accelerated growth driven by transition to a cloud and

subscription business model

• significant share buybacks at highly attractive prices to drive substantial value.

SinceCaledoniainitiallyinvestedinOraclein2014,thecompanyhassuccessfully

transitioned to a cloud and subscription business model and earnings growth has

acceleratedtomid/highsingledigits.Inaddition,Oraclehasreducedsharecountby

c.50%overthelastdecadeatanaveragepriceofc.$45,whichhasbeenhighlyaccretive

toEPS.DuringtheCovid-19pandemic,weincreasedourholdingbyc.30%,taking

advantageofthedislocationinthesharepriceatthetime.Morerecently,wecrystalised

gainsonaportionofourholding,followingaperiodofsharepriceappreciation.At31

March2024,OraclewasCaledonia’seighthlargestportfoliocompany,representing

2.8%ofnetassets.

Share price US$

Initial investment at an avg buy price of $41

17% annualised return (£)

Topped up our investment

during Covid adding 30%

Top slicing: number oi trades reducing holding by ~14%

100

120

140

Mar 14

Sep 14

Mar 15

Sep 15

Sep 16

Mar 16

Mar 17

Sep 17

Mar 18

Sep 18

Mar 19

Sep 19

Mar 20

Sep 20

Mar 21

Sep 21

Mar 22

Sep 22

Mar 23

Sep 23

Mar 24

Strategic report Corporate governance Financial statements Other information

Introduction

The Private Capital team invests directly, either on a majority or minority basis, in a small

number of private companies, predominantly in the UK mid-market. The team work very

closely with portfolio companies, providing operational and strategic support alongside

long-term capital in order to drive value. The qualities we focus on include:

Private Capital

Strategic allocation

25%-35%

of net assets

Actual

28%

of net assets

Well-established

businesses with strong

market positions

Prudent capital

structures

Profitable and cash

generative

Experienced

management teams

£820m of NAV

8 companies

Annualised performance – total return

At a glance (continued)

Further detail

Turn to page 30

We target a total return target of

14%p.a.witha2.5%yieldoncost,

byinvestinginestablishedbusinesses

withrobustoperatingmargins,ledby

strongmanagementteamstargeting

meaningfulgrowth.

10%

20%

30%

Over 1 year Over 3 years

Over 5 years

Over 10 years

12%

24%

14%

14% p.a.

Total return target

6 Caledonia Investments plc Annual Report 2024

Case study

7IM is a leading UK-based wealth

management firm.

£128m

Total investment

15%

IRR

2015

Date of initial investment

2.3x

Multiple of cost

Financial

services

Sector

£298m

Total proceeds received

Investment thesis

• expand direct to consumer distribution to grow AUM

• management succession

• invest in people, operations and technology.

CaledoniaPrivateCapitalacquired7IMin2015,initiallyinvesting£74minthebusinessfor

a94%equitystake.Overthenexteightyears,weinvestedafurther£54moffollow-on

capitalintothebusiness,fundingaccretiveacquisitionsandinvestingheavilyintechnology

toexpand7IM’sdirecttoconsumeroffering.Alongsidethis,wetransitionedtheretiring

seniormanagementteam,appointinganewCEOandChairand,workingcloselywiththe

managementteam,successfullypivotedthebusinessfromapureinvestmentmanagerto

a‘platform-led’wealthmanager.Duringourownership,assetsundermanagementalmost

tripled,and7IM’srevenueandprofitabilityweresignificantlyenhanced.InJanuary2024,

weexitedthebusinesstoOntarioTeachers’PensionPlanBoardgeneratingnetproceeds

of£256mwhich,togetherwiththe£42mofdividendsreceivedoverthelifetimeofthe

investment,resultedinareturnof2.3xcost.

Lifetime returns (£m)

Mar 16

117

145

198

225

298

Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 Mar 23 Exit

Invested cost

Capital gain

Cumulative dividends

Strategic report Corporate governance Financial statements Other information

Introduction

We invest in funds managed by leading managers in North America and Asia. We seek

to partner with some of the world’s most talented managers in long and profitable

relationships. We focus on regions that are the engines of well-proven global growth,

namely North America and Asia. Our relationships tend to span multiple fund vintages

and we often take advisory board positions to influence fund development.

The qualities that we focus on are:

Funds

Strategic allocation

25%-35%

of net assets

North American fund investments

•buyout,lowermid-market.Focusonsmall

tomediumsized,oftenowner-managed,

established businesses

•usuallyfirstinstitutionalinvestmentandwill

supporttheirprofessionalisationandgrowth,

bothorganicallyandthroughM&Aactivity.

59%

of pool NAV

•focusonventure,growthandbuyout(through

fundsoffunds)investmentsinnon-cyclical,

new economy sectors such as healthcare and

technology,whicharewellplacedtobenefit

from wider demographic trends

•investingintobusinessesintheearlyyears

ofsignificantgrowth,havingsuccessfully

developedtheirbusinessmodel.Whilst

focusedonlocalmarkets,anumber,

particularlythosewithahealthcarefocus,

alsoinvestintotheUS.

Asia fund investments

41%

of pool NAV

Actual

31%

of net assets

£926m of NAV 74 funds

42 managers 600+ companies

At a glance (continued)

Successful track record

Alignment of interest

Expertise in driving

value through cyclesStable team

Further detail

Turn to page 34

Annualised performance – total return

10%

15%

20%

Over 1 year Over 3 years

Over 5 years

Over 10 years

17%

16%

17%

Weseekdiversifiedfundholdings

inprivatecompaniesthatprovide

long-term and consistent returns

in geographic markets that

counterbalance our quoted

equityandUK-centricprivate

capitalinvestments.

12.5% p.a.

Total return target

8 Caledonia Investments plc Annual Report 2024

Case study

Founded in 2014, CenterOak Partners is a Dallas-based firm that

makes control buyouts of small business services, industrial

services and consumer essential services companies, where these

can be transformed through operational efficiency and a “buy-and-

build” value creation strategy. Typically CenterOak will be the first

institutional capital into closely-held or family-owned businesses

or they will look to invest in non-core subsidiaries or divisions of

larger public or private companies where they can grow revenue

and improve net margins through operating efficiency.

Target company criteria

Portfolio company snapshots

CollisionRight –ProviderofautobodyrepairservicesacrosstheCentralandNorth-East

US.Sincetheoriginalinvestmentin2020,CollisionRightacquired30companiesandthe

companywassoldinJanuary2024,generatinga2.5xnetmultipleofcost.

Turf Masters –Providerofexteriorresidentialservicesincludinglawncareservicesand

exteriorpestprogrammes.Sincetheoriginalinvestmentin2022,TurfMastershas

acquiredsixcompanies.

HomeTown –ProviderofresidentialHVAC,plumbingandelectricalmaintenanceand

repairservicesintheSouthernUS.Sincetheoriginalinvestmentin2021,HomeTown

hasacquired26companies.

Caledonia’s commitment

TheseniorteamatCenterOakhavebeenworkingtogetherformorethantwodecades.

CaledoniastartedformalduediligenceonCenterOakin2014,aheadofmakinga

commitmenttotheirfirstfundin2015.

CaledoniaservesontheLimitedPartneradvisoryboardforCenterOakIandII.

Fund name CenterOakI CenterOakII

Vintage year 2015 2021

Fund size $420m $690m

Caledonia's commitment $30m $30m

$50m-$500m

Enterprise value

$30m-$150m

Total equity investment

$50m-$500m

Revenue

9-10

Platform investments

per fund

$7m-$35m

EBITDA

1-3

Investments per annum

Strategic report Corporate governance Financial statements Other information

Introduction

Insightful

& supportive

Through our extensive network of contacts,

we identify and select companies with

strong fundamentals and great potential.

We maintain effective and constructive

relationships with the people, companies

and funds in which we invest.

Wheelyboat Trust

The Caledonia Investments Charitable Foundation supported The Wheelyboat

Trust which is dedicated to providing mobility, learning and sensory impaired

people of all ages with independent access to activities such as powerboating,

nature watching, pleasure boating and angling in uniquely designed

wheelchair-accessible Wheelyboats.

10 Caledonia Investments plc Annual Report 2024

Strategic

report

Chair's statement

Chief Executive Officer’s report

How we create value

Key performance indicators

Investment review

Public Companies

Financial review

Going concern and viability

Funds

Risk management

Private Capital

Sustainability

Strategic report Corporate governance Financial statements Other informationIntroduction

David Stewart

Chair

Each of the Public Companies, Private

Capital and Funds pools contributed

to growth over the year.

Results

I am pleased to report another year of growth at

Caledonia,withnetassetsincreasingto£3bn.NAVTR

was7.4%,withinourlong-termtargetofinflationplus

3%to6%.EachofthePublicCompanies,PrivateCapital

andFundspoolscontributedtogrowth,despiteforeign

exchangeheadwinds.Itisalsowelcomingtoseeour

longer-term performance continuing to outperform

inflationandFTSEAll-Sharetotalreturn,bothkey

strategicobjectivesforthecompany.

Income and dividend

Theboardisrecommendingafinaldividendof51.47p

persharewhich,ifapprovedbyshareholders,willbe

payableon1August2024toordinaryshareholderson

theregisteron28June2024.Thisrepresentsafull-year

dividendof70.4p,anincreaseof4.5%whencomparedto

thepreviousyear,and57consecutiveyearsofincreased

annualdividends.

Investmentandotherincome

increasedfrom£44mto

£63m

.Totalnetrevenuewas£41m,sufficienttocover

thedividendfortheyear.Aspreviouslyreported,we

expectagradualreductionininvestmentincomeas

wemaintainourfocusontotalreturnsand,overtime,

weanticipatethatnetdistributionsfromourinvestments

willplayamorematerialroleindividendcover.

Board

WewelcomedRobMemmottasournewChiefFinancial

Officeron1September2023.Rob,acharteredaccountant

withover20years’experienceinseniorfinancial

leadershiproles,hasmadeanexcellentstart.Hesucceeds

TimLivettwhoretiredlastyear.Iwouldlikeonceagain

to extend the board’s thanks to Tim for his contribution

toCaledoniaandwewishhimeverysuccessashepursues

aportfolioofnon-executiveroles.StuartBridgesalso

retiredasanon-executivedirectorattheconclusionoflast

year’sannualgeneralmeetingandweremainverygrateful

forhiswisecounselovertheyears.

Aspreviouslyreported,followingaperiodofnotable

change,theboardhasaskedthatIextendmytenureuntil

theannualgeneralmeetingin2025,subjecttoongoing

approvalbyshareholders.

Chair’s statement

1. Revenueaccount.

2. Includingthebenefitof£15mofrevenuefromnon-consolidatedsubsidiaries.      

12 Caledonia Investments plc Annual Report 2024

Share buybacks

Theboardfirmlybelievesthatthecompany’sabilityto

make market purchases of its own shares is in the best

interestofallshareholders.TheCayzerfamilyconcert

party is a long-term shareholder and the source of

Caledonia’sstrongcultureandlong-termoutlook.

Giventheobligationthatcouldariseontheconcertparty

tomakeageneralofferforthecompanyunderRule9of

TheCityCodeonTakeoversandMergers(‘Code’),wewill

onceagainbeseekingshareholderapprovalofthewaiver

oftheCode’smandatoryofferprovisions.Furtherdetails

aresetoutintheGovernancereportonpage70.

Annual general meeting

EachyearI,togetherwithmyboardcolleagues,welcome

the opportunity to meet with shareholders in person at

our annual general meeting which once again takes place

inLondonon17July2024.

Outlook

Caledonia’sinvestmentstrategytakesalong-termview,

with the premise being that exposure to good-quality

companiesoverlongtimeperiodsispreferabletoshort-

termtrading.Focusingonthelongtermnecessitatesa

balanced approach to building a portfolio and has resulted

inCaledonia’sexposurebeingwell-diversifiedandhaving

aglobalreach.

Theeconomic,fiscal,geopoliticalandtechnological

environmentsappeartobeinastateoffluxand

somewhatunpredictable.Ourkeystepstomitigate

these risks continue to be with the quality and resilience

ofeachinvestmentbeingcarefullyconsidered,aswell

asavoidingdebttodrivereturns.WhileCaledonia

isalong-terminvestor,anactiveapproachtoportfolio

managementenablesustotakeadvantageof

opportunitiesastheyarise.

David Stewart

Chair

20May2024

1. Revenueaccount.

2. Includingthebenefitof£15mofrevenuefromnon-consolidatedsubsidiaries.      

Strategic report Corporate governance Financial statements Other informationIntroduction

Mat Masters

ChiefExecutiveOfficer

Our performance has been delivered

against a background of continuing

macroeconomic and geopolitical

uncertainty, underlining the strength

of our investment strategy.

7.4%

NAV total return

Caledonia’slong-standingphilosophyistoinvestin

high-quality,well-managedcompanies,withatruly

long-termview.Thishascontinuedtoserveuswellover

thepastyear,withNAVTRincreasingby7.4%andallthree

investmentpoolscontributingtogrowth.

Thisperformancehasbeendeliveredagainsta

background of continuing macroeconomic and geopolitical

uncertainty,underliningthestrengthofourinvestment

strategy,whichhasgeneratedconsistentlong-termreal

returnsoutperforminginflationby7.2%p.a.overthelast

decade.Wehavecontinuedtoincreasedividendspaidto

shareholders,whichwehavenowdonefor57consecutive

years–atrackrecordweareincrediblyproudof.

Annualised performance

10%

15%

CPIH

Target

return

Over 5 yearsOver 3 years

+13%

+11%

+8%

Over 10 years

Caledonia NAVTR Caledonia Share Price TR FTSE All-Share TR

Target

return

Target

return

+11%

+5%

+10%

+9%

+6%

+5% +6%

+4%

Strategy and allocation

Weholdinvestmentsinbothlistedandprivatemarketsvia

threepools:PublicCompanies,PrivateCapitalandFunds.

Thediversityandlong-termoutlookofourinvestment

approachmeanwecaneffectivelymanagerisk,both

throughdiversificationanddisciplinedcapitalallocation

acrossourthreepools,providingshareholderswith

awell-balanced,globalportfolio.

Chief Executive Officer’s report

14 Caledonia Investments plc Annual Report 2024

Performance highlights

Theoverallportfoliogeneratedareturnof8.7%inthe

year,despiteforeignexchangeheadwindswhichimpacted

returnsby(0.6)%.

10%

15%

20%

25%

Public Companies Private Capital Funds

Annualised investment pool returns

1year 3 years 5years 10years

OurPublicCompaniespoolisinvestedinhigh-quality,

well-managed businesses with strong market positions and

pricingpower.Theglobalportfolioissplitbetweencapital

andincomeinvestments,withthelatterprovidingan

importantcontributiontocoveringourcostbaseand

dividend.Performanceintheyearwasdrivenbythe

CapitalPortfolio,withmaterialcontributionsfrom

Microsoft,OracleandWatsco.Eachoftheseinvestments

isatestamenttoourlong-termstrategy,havingbeenheld

formanyyearsandallhavedelivereddoubledigitannual

returnssinceourinitialinvestment.

WithinPrivateCapital,wesoldSevenInvestment

Management(‘7IM’)for£256m,a32%increaseonthe

31March2023valuationanda2.3xmultipleofcost.

Ourownershipof7IMembodiesourinvestment

philosophy.Weacquiredthebusinessin2015and,over

thefollowingalmosteightyears,workedwiththe

managementteamtosuccessfullypivotthebusiness

frompureinvestmentmanagertoa‘platform-led’wealth

manager.Theteamintegratedfouracquisitionsandalmost

tripledassetsundermanagement,significantlyenhancing

7IM’srevenueandprofitabilitybeforeagreeingthesale

ofthebusinesstoOntarioTeachers’PensionPlanBoard

lastyear.InApril2023,weannouncedtheacquisitionof

AIR-servEurope,addinganexcellentbusinesstoour

portfolio.AIR-servEuropeisaleadingdesignerand

manufacturerofair,vacuumandjetwashmachines,

whichitprovidesasaturnkeysolutiontofuelstation

forecourtoperatorsacrossWesternEurope.

AIR-serv Europe case study

Turn to page 32

Growth from our Funds pool was lower than in recent

years,withpositiveperformancefromourNorth

American funds partially offset by weaker results from

ourAsiagrowthandventurecapitalfunds.Wealso

sawaslowdownindistributions,reflectingthebroader

marketenvironmentforprivateequityexits.Duringthe

lastquarterofourfinancialyear,webegantoseean

increaseindistributionsfromourNorthAmericanfunds,

with the underlying managers cautiously optimistic that

exitmarketswillcontinuetoimprove.Incontrast,we

believecontinuedmarketvolatilityinAsia,andthe

portfolio’sfocusonearlierstagebusinesses,willlikely

mean that it will take longer for distributions from this

regiontoimprove.

Liquidity and balance sheet

Caledoniaendedtheyearwithnetcashof£227mwhich,

alongsideourexisting£250mrevolvingcreditfacility,

providessignificantliquiditytoinvestinattractive

opportunitiesastheyarise.

Shareholder returns

Sentimenttowardsinvestmentcompanies,andin

particularthoseinvestinginprivateassets,continues

toweighondiscountsacrossthesector.Caledonia’sshare

pricehasnotbeenimmunetothis,withtheshares

deliveringatotalreturnof(1.2)%intheyear,andour

discountwideningfrom33%to39%.Webelievethat

thesharepricefundamentallyundervaluesthequality

ofCaledonia’sinvestmentportfolioanditslong-term

performance.TheongoingsupportoftheCayzerfamily

underpinsCaledonia’slong-termcultureandinvestment

approach.However,giventhefamily’ssignificantholding,

there are limitations to the number of shares we are able

torepurchase.InMarchandAprilofthisyear,we

purchased290,219sharesatanaveragediscountof36%,

resultingina10.1paccretiontoNAVpershare.

Duringtheyear,wealsoinstigatedareviewofourinvestor

relationsandcommunicationsprogrammeandactivities,

toensureourinvestmentpropositioniswellunderstood

andrecognisedbythemarket.Wewillbebuildingon

severalinitiativesthisyearandwillcontinuetoimprove

and expand these in the coming months to increase our

profileamongexistingandnewinvestors.

Strategic report Corporate governance Financial statements Other informationIntroduction

Chief Executive Officer’s report (continued)

Our culture and purpose

Ahealthyandvibrantculture,builtaroundasetofaligned

values,isfundamentaltothesuccessofanybusiness.

WhenIbecameCEO,oneofmyfirstprioritieswasto

thoroughlyinterrogatewhatwedoasabusiness,how

wedoitand,mostimportantly,whywedoit.Theproject

hasbroughtourcultureandvaluestotheforefrontofwho

weare–along-terminvestor,investinginhigh-quality

companiesthathavethepotentialtogenerateexceptional

long-termvalue,alongsidebuildingrewardingrelationships

andadeepunderstandingofourinvestments.Iamgrateful

tomycolleaguesandotherstakeholderswhoprovided

invaluablefeedbacktohelpcreateournewmanifesto,

written by a broad cross section of employees and rooted

in the concept of

‘

timewellinvested’.Thismanifesto(page

17)willguideusaswelookahead,underpinningourfocus

on generating long-term compounding real returns that

outperforminflationby3%-6%overthemediumtolong

term,andtheFTSEAll-Shareindexover10years.

Further information on Time Well Invested

is available on the website

www.caledonia.com

People

Ouremployeesremainourmostimportantassetandwe

seektocreateanenvironmentthatenablesustoattract,

retainanddevelopexceptionalpeople.AlongsideRob

Memmott’sappointmentasChiefFinancialOfficer,we

alsostrengthenedtheteamacrossanumberoffunctions,

promotinginternaltalentandhiringnewexpertise.Iwould

like to thank my colleagues for their ongoing enthusiasm

andcommitmentacrossthebusiness.

In2021,weimplementedaformalinternshipprogramme,

underscoringourcommitmenttodevelopingfuturetalent

withintheinvestmentmanagementindustry,having

providedinternshipsonaninformalbasisformanyyears.

In2023,wewelcomedacohortof12internswithall

respondentstoourpost-programmesurveydescribingit

as“excellent”andonewhichtheywouldrecommend.We

look forward to continuing to support our interns

’

ongoing

growthanddevelopmentthroughouralumniprogramme.

Further information on our People and Culture

can be found in our Sustainability section

Turn to pages 42-56

Our approach to responsible investment

Overthecourseoftheyear,wehavefurtherdeveloped

ourapproachtoresponsibleinvestmentthroughour

workinggroup,embeddingskillswithinourinvestment

teamsandstrengtheningourinvestmentprocesses.

We continue to consider the issues associated with

climate change and its potential impact on our business

andportfolio.OursecondTaskforceonClimate-related

Financial Disclosures report has been published alongside

thisannualreport.

Further details on our activities in this area are

provided within the Sustainability section

Turn to pages 42-56

Looking forward

Whiletheexternalenvironmentremainsuncertain,we

remainfocusedonwhatwecancontrol.Ourlong-term

approach,diversifiedglobalportfolioandstrongbalance

sheetpositionuswelltotakeadvantageofinvestment

opportunitiesandcontinuedeliveringattractive

long-termreturns.

Mat Masters

ChiefExecutiveOfficer

20May2024

TheStrategicreportincludestheSection172

statement,whichsetsoutfurtherdetailofour

stakeholders,onpages74to78

16 Caledonia Investments plc Annual Report 2024

We believe in the power of time.

While others fight against it,

Trying to conquer every passing minute,

We work with it.

We invest it patiently and judiciously,

Harnessing its power year after year.

Never afraid to wait, but always ready to act.

Time is key to our knowledge, the trust we’re given,

And the relationships we build

It is the source of our enduring partnerships,

Carefully tended over decades.

Never fleeting, always meaningful

We dedicate time to our people:

Giving it generously to nurture their growth,

Both personal and professional.

We invest time now to plan for success in the future,

To sow seeds that will flourish for generations to come.

Time cannot be tamed or altered,

But its power can be harnessed,

Invested in the things that matter most,

To create something that lasts.

Strategic report Corporate governance Financial statements Other informationIntroduction

How we create value

The company invests in proven, well-managed businesses that combine long-term

growth characteristics with an ability to deliver increasing levels of income. We are a

self-managed investment trust, and we utilise our resources and relationships to identify

opportunities, apply a disciplined investment process and robust risk management to

deliver long-term capital growth and dividends for our shareholders.

Key enablers

of value

• expert team

• long-term approach

•investmentprocess

• careful portfolio

construction and risk

mitigation

• strength of the

balance sheet

• reputation and

network

Expert team

Ourteamhasdeep

knowledge of the

companies and sectors

inwhichweinvest.Our

culture is centred around

acollectionofvaluesthat

shape our approach to

everyaspectofinvesting:

insightful,supportive,

responsible,considered

andlong-term.

Long-term

approach

Webuytohold,

investinginhigh-

quality companies

with strong market

positions and

fundamentals

alongsideinvestments

in funds with track

recordsofsuccess.

Investment process

Source opportunities

Opportunitiesareidentifiedthroughourbusinessnetworkandourown

research.Aninitialreviewwillidentifyopportunitieswithcharacteristics

whichmeetourstrategicrisk/returnappetite.

Analyse and invest

Extensiveandongoingbusinessandfinancialduediligenceisconducted,

oftenusingindependentadvisers,beforeafinalinvestmentdecisionismade.

Collaboration

Webuildlong-termrewardingrelationshipswithourinvesteecompaniesand

funds.Investmentsaresubjecttocontinuousperformancemonitoringand

riskreviews.

Reinvest or return

Proceedsfromthesalesofinvesteecompaniesandfundsarereinvestedin

newinvestmentopportunitiesorreturnedtoshareholdersthroughdividends

orsharebuybacks.

Investment and monitoring

Capital

allocation

Responsible

investing

Collaboration

Source

opportunities

Reinvest or

return

Analyse and

invest

Investment

Committee

Risk

management

18 Caledonia Investments plc Annual Report 2024

Investment pools

Public Companies

Target return:

10.0%p.a.Capitalportfolio

7.0%p.a.Incomeportfolio

Further information

Turn to page 26

Private Capital

Target return:

14.0%p.a.

Further information

Turn to page 30

Funds

Target return:

12.5%p.a.

Further information

Turn to page 34

Our investment process is tailored to the nature and risk of each asset group.

All investments are approved by the Investment Committee with board approval

required for investments and disposals over a defined threshold.

Careful portfolio

construction and risk

management

Weprimarilyinvestinequities,on

aglobalbasis,toachieveourtarget

returns.Wemanagetheriskof

permanentlossofcapitalbydiversifying

ourinterestsandavoidingexcessively

riskyinvestments.Effectiverisk

management is a key component of our

investmentapproachandweconsider

a number of key risk areas which assist

in ensuring that the different parts of

the group operate within strategic

riskparameters.

Strength of the

balance sheet

Weinvestsolelyfromourownbalance

sheetandhavenopermanentcorporate

debt.Weaimtomaintainsufficientcash,

liquid assets and committed facilities to

coverourliabilitiesandcommitments

astheyfalldue.Thisprovidesuswith

theflexibilitytoinvestinbothprivate

equityandquotedopportunitiesover

longer(10-year)timeframes,significantly

reducingtheinvestmentcyclerisk.

Reputation and network

Ourreputationasasupportiveand

constructivelyinvolvedlong-term

investorenablesustodevelopour

networkofeffectivebusinesscontacts.

This network enables us to identify

opportunities and carry out due

diligence,aswellasbeinginvaluable

tothemanagementofourinvestee

companies.

Who benefits

Our shareholders

Ourshareholdersprovide

Caledonia

’

s permanent capital

and it is for their benefit that the

directors are required to promote

the company

’

s success

Our people

Ouremployeesareourmost

importantasset,andweinvest

time to foster their professional

developmentandwellbeing

Our portfolio companies

and funds

We build rewarding relationships

and a deep understanding of our

investments

Suppliers

Webuildandvaluelong-term

relationships

Community

Throughourfoundation,wehave

an ongoing commitment to the

wider community

Further information

Turn to page 74

Strategic report Corporate governance Financial statements Other informationIntroduction

KPI Rationale Progress in the year Links to strategic objectives and risks Metric

Net asset value total

return ('NAVTR')

NAVTR is a measure of how the net

assetvalue(‘NAV

’

)persharehas

performedoveraperiod,takinginto

account both capital returns and

dividendspaidtoshareholders

APM

Alternativeperformancemeasure

-seepage154fordetails

• the company has continued to build on its strong

performance,reportingNAVTR7.4%intheyear

•overfiveand10yearsthecompanyhasreporteda

NAVTRof10.9%p.a.and10.0%p.a.respectively,

outperforminginflationby6.6%and7.2%over

the same periods

•over10yearsourNAVTRhasoutperformedthe

FTSEAll-ShareTRIndexby4.2%p.a.

Risks:

Strategic

Investment

Market

Liquidity

Total shareholder

return ('TSR')

TSR measures the return to our

shareholdersthroughthemovementin

thesharepriceanddividendspaid

during the measurement period

APM

Alternativeperformancemeasure

-seepage154fordetails

• th e company

’

sTSRfortheyearwas(1.2)%

•overfiveand10years,thecompany

’

s TSR is

5.0%and8.6%respectively

•over10yearsthecompany

’

s TSR has

outperformed the FTSE All-Share index by

2.8%andinflationby5.7%.

Risks:

Strategic

Investment

Market

Liquidity

Dividend growth

over time

A reliable source of income is

importantforourshareholders.

Caledoniahasaprogressive

dividendpolicy

Annualdividendisthepershare

amount payable to shareholders out

ofprofitsfortheyear,excludingany

specialdividends

•thecompanypaidaninterimdividendof18.93p

andhasproposedafinaldividendof51.47p,taking

totaldividendsto70.4ppershare,a4.5%increase

yearonyear,extendingourrecordofgrowing

annualdividendsfor57consecutiveyears

•overthelastfiveand10years,ourdividendhas

grownby3.5%p.a.and3.4%p.a.

•overthesameperiod,inflationhasincreasedby

4.2%p.a.and2.9%p.a.

Risks:

Strategic

Investment

Market

Liquidity

NAV per share

Themeasureofthecompanyassets,

calculatedbydividingnetassetsbythe

fully diluted number of shares in issue

Pleaseseenote17ofthefinancial

statements

•at31March2024,thecompanyhadnetassetsof

£2,965m(5369ppershare),reportinga5.9%

returnovertheyear

•overfiveand10yearsthecompanyhasreported

aNAVpersharegrowthof8.4%p.a.and7.5%

p.a.respectively.

Risks:

Strategic

Investment

Market

Liquidity

We measure our performance against four strategic objectives

using key performance indicators.

Key performance indicators

20 Caledonia Investments plc Annual Report 2024

KPI Rationale Progress in the year Links to strategic objectives and risks Metric

Net asset value total

return ('NAVTR')

NAVTR is a measure of how the net

assetvalue(‘NAV

’

)persharehas

performedoveraperiod,takinginto

account both capital returns and

dividendspaidtoshareholders

APM

Alternativeperformancemeasure

-seepage154fordetails

• the company has continued to build on its strong

performance,reportingNAVTR7.4%intheyear

•overfiveand10yearsthecompanyhasreporteda

NAVTRof10.9%p.a.and10.0%p.a.respectively,

outperforminginflationby6.6%and7.2%over

the same periods

•over10yearsourNAVTRhasoutperformedthe

FTSEAll-ShareTRIndexby4.2%p.a.

Risks:

Strategic

Investment

Market

Liquidity

Total shareholder

return ('TSR')

TSR measures the return to our

shareholdersthroughthemovementin

thesharepriceanddividendspaid

during the measurement period

APM

Alternativeperformancemeasure

-seepage154fordetails

• th e company

’

sTSRfortheyearwas(1.2)%

•overfiveand10years,thecompany

’

s TSR is

5.0%and8.6%respectively

•over10yearsthecompany

’

s TSR has

outperformed the FTSE All-Share index by

2.8%andinflationby5.7%.

Risks:

Strategic

Investment

Market

Liquidity

Dividend growth

over time

A reliable source of income is

importantforourshareholders.

Caledoniahasaprogressive

dividendpolicy

Annualdividendisthepershare

amount payable to shareholders out

ofprofitsfortheyear,excludingany

specialdividends

•thecompanypaidaninterimdividendof18.93p

andhasproposedafinaldividendof51.47p,taking

totaldividendsto70.4ppershare,a4.5%increase

yearonyear,extendingourrecordofgrowing

annualdividendsfor57consecutiveyears

•overthelastfiveand10years,ourdividendhas

grownby3.5%p.a.and3.4%p.a.

•overthesameperiod,inflationhasincreasedby

4.2%p.a.and2.9%p.a.

Risks:

Strategic

Investment

Market

Liquidity

NAV per share

Themeasureofthecompanyassets,

calculatedbydividingnetassetsbythe

fully diluted number of shares in issue

Pleaseseenote17ofthefinancial

statements

•at31March2024,thecompanyhadnetassetsof

£2,965m(5369ppershare),reportinga5.9%

returnovertheyear

•overfiveand10yearsthecompanyhasreported

aNAVpersharegrowthof8.4%p.a.and7.5%

p.a.respectively.

Risks:

Strategic

Investment

Market

Liquidity

Our strategic objectives

Generate total returns

that outperform

inflation by 3%-6%

over the medium to

long term

Generate total returns

that outperform the

FTSE All-Share index

over 10 years

Pay annual dividends

increasing by inflation

or more over the

long term

Manage investment risk

effectively for long-term

wealth creation

10%

12%

14%

Caledonia NAVTRCPI-H +3% to CPI-H +6%

Caledonia NAVTR Caledonia TSR FTSE All Share TR

10%

12%

14%

16%

20242015 2016 2017 2018 2019 2020 2021 2022 2023

20.0

10.0

30.0

40.0

50.0

60.0

70.0

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

March 2014 March 2016 March 2018 March 2020 March 2022 March 2024

1,000

2,000

3,000

4,000

5,000

6,000

NAV/share over 10 years (p)

10%

12%

14%

Caledonia NAVTRCPI-H +3% to CPI-H +6%

Caledonia NAVTR Caledonia TSR FTSE All Share TR

10%

12%

14%

16%

20242015 2016 2017 2018 2019 2020 2021 2022 2023

20.0

10.0

30.0

40.0

50.0

60.0

70.0

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

March 2014 March 2016 March 2018 March 2020 March 2022 March 2024

1,000

2,000

3,000

4,000

5,000

6,000

Annual dividend/share over 10 years (p)

10%

12%

14%

Caledonia NAVTRCPIH +3% to CPIH+6%

Caledonia NAVTR Caledonia TSR FTSE All Share TR

10%

12%

14%

16%

20242015 2016 2017 2018 2019 2020 2021 2022 2023

20.0

10.0

30.0

40.0

50.0

60.0

70.0

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

March 2014 March 2016 March 2018 March 2020 March 2022 March 2024

1,000

2,000

3,000

4,000

5,000

6,000

NAVTR annualised 10-year rolling performance

10%

12%

14%

Caledonia NAVTRCPI-H +3% to CPI-H +6%

Caledonia NAVTR Caledonia TSR FTSE All Share TR

10%

12%

14%

16%

20242015 2016 2017 2018 2019 2020 2021 2022 2023

20.0

10.0

30.0

40.0

50.0

60.0

70.0

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

March 2014 March 2016 March 2018 March 2020 March 2022 March 2024

1,000

2,000

3,000

4,000

5,000

6,000

TSR annualised 10-year rolling performance

Strategic report Corporate governance Financial statements Other informationIntroduction

Investment review

Overall performance

At31March2024,theinvestmentportfoliowasvaluedat

£2.7bn,deliveringareturnof8.7%duringtheyear,despite

foreignexchangeheadwinds,buildingonourlong-term

trackrecordofdeliveringrealreturns.

Allinvestmentpoolscontributedtogrowth,withPublic

CompaniesandPrivateCapitalpoolsdeliveringdouble-

digitgrowthof12.0%and12.3%respectivelyandour

Fundspooldeliveringareturnof2.2%intheyear.Within

thePublicCompaniespool,performancewasprincipally

drivenbyourCapitalportfolio.Performanceacrossour

PrivateCapitalportfoliowasdrivenbyrealisationactivity

and continued good operating progress across the

majorityoftheportfolio.PerformancefromtheFunds

poolwaslowerthaninrecentyears,withcontinued

good performance from our North American mid-market

buyoutfunds,partiallyoffsetbyweakerperformance

fromourAsiagrowthandventurecapitalfunds.

Investment activity

Duringtheyear,weinvestedatotalof£346.3minto

theportfolio,againstwhich£371.3mofproceedswere

received,resultinginnetmovementof£25.0m.

Newinvestmentactivitywasprimarilydrivenbythe

£142.5macquisitionofAIR-servEuropebyPrivateCapital,

£108.6mintoourFundspooland£76.5mintoourPublic

Companiespool.

RealisationsproceedsweredrivenbythesaleofSeven

AssetManagement(‘7IM

’

)for£255.8manddistributions

fromtheFundspoolof£72.0m,themajorityofwhich

camefromourmaturingNorthAmericanfunds.Within

thePublicCompaniespool,theteamcrystalised£43.5m

onasmallportionofseveralholdingsfollowingaperiod

ofstrongsharepriceappreciation.

Caledonia’s portfolio is invested

across three investment pools,

each managed by a specialist

team investing in well-managed

businesses that combine long-term

growth characteristics with, in

many cases, an ability to deliver

increasing levels of income. We

invest in both listed and private

markets, covering a range of

sectors, resulting in a well-balanced

diversified portfolio of investments

with a global reach.

Public Companies

Private Capital

Funds

30%-40%

Strategic asset allocation

25%-35%

Strategic asset allocation

25%-35%

Strategic asset allocation

32%

NAV

28%

NAV

31%

NAV

At31March2024,9%ofNAVwasheldincashandother.

22 Caledonia Investments plc Annual Report 2024

Sector

The following chart shows the distribution of the portfolio

at31March2024bysector,demonstratingahighlydiverse

sectorexposureacrossourinvestments.

Currency

Thefollowingchartanalysesnetassetsat31March

2024bycurrencyexposure,basedonthecurrenciesin

whichinvestments,cashorotherassetsaredenominated

ortraded.Duringtheyear,Sterlingstrengthenedby

2%againsttheUSdollar,adverselyimpactingour

annualreturn.

Geographic diversification

The following chart shows the distribution of the portfolio

at31March2024betweenregions.Thebasisofthis

analysisisthecountryoflistingforquotedsecurities,

countryofresidenceforunlistedinvestmentsand

underlyingregionalanalysisforfunds.

The following chart illustrates geographic analysis

at31March2024byrevenuegeneration,

demonstratingahighlydiversegeographic

exposureacrossourinvestments.

March

2023

£m

Investments

£m

Realisations

£m

Accrued

income

£m

Gains/

(losses)

£m

March

2024

£m

Income

£m

Return

Pool

Public Companies 836.9 76.5 (43.5) – 79.9 949.8 21.8 12.0

PrivateCapital 824.0 161.2 (255.8) 1.4 89.5 820.3 21.7 12.3

Funds 873.8 108.6 (72.0) – 15.9 926.3 3.6 2.2

Total pools 2,534.7 346.3 (371.3) 1.4 185.3 2,696.4 47.1 8.7

1. ReturnsforinvestmentsarecalculatedusingtheModifiedDietzMethodology.      

Investment movements in the year

2.IncludesAIR-servEuropeand

CookeOptics

Geography by region (headquartered)

NorthAmerica 45%

UK&ChannelIslands 34%

Asia 13%

Europe 8%

Geography by revenue generation

NorthAmerica 43%

Asia 18%

UK&ChannelIslands 16%

Europe 16%

Othercountries 7%

Sector

Industrials

 27%

Consumerdiscretionary

 12%

Informationtechnology 12%

Fundsoffunds 11%

Financials 9%

Healthcare 8%

Materials 7%

Consumerstaples 6%

Communicationservices

 2%

Othersectors 6%

Currency exposure

USdollar 52%

PoundSterling 39%

Euro 7%

Othercurrencies 2%

Strategic report Corporate governance Financial statements Other informationIntroduction

At 31 March 2024, our top 10 investments were valued at £1,227.9m and represent 41.4% of net assets.

Top 10 investments

Investment review (continued)

Sector

Financials

Investmentpool

Private Capital

Belgium-basedindependentinvestmentcompanywithnetassetsof€4.7bn,investinginprivatebusinesses

inEuropeandNorthAmerica.

Investment thesis

•firstinvestedwithCobepain2004andtheinvestmenthassincedeliveredstrong,compoundingreturns

•long-termpartner,withsimilarinvestmentphilosophytoCaledoniaPrivateCapital

•geographicdiversificationandsourceofpotentialco-investments.

Value £181.0m

%ofNAV6.1%

Sector

Industrials

Investmentpool

Private Capital

Leadingdesignerandmanufacturerofair,vacuumandjetwashmachines,providingturnkeysolutionstofuel

stationforecourtoperatorsacrossWesternEurope.

Investment thesis

•expandtheinstalledmachineestate,focusingonjetwashandincrementalairopportunitiesintheUKand

air growth in existing and new European geographies

•createastandalonebusiness,investinginpeople,operationsandgovernance

•driveperformanceefficienciesandcashgeneration.

Value £170.1m

%ofNAV5.7%

Sector

Financials

Investmentpool

Private Capital

Largestindependentmulti-familyofficeinEMEA,providingfamilyoffice,fiduciary,investmentmanagement,

corporateservices,treasuryandcustodyservices.

Investment thesis

•attractivelong-termgrowthdynamicsoftheultrahighnetworthmarket

• geographic and product based acquisition strategy

•significantinvestmentintechnologyplatformandpeople.

Value £168.5m

%ofNAV5.7%

Sector

Diversified sector exposure

Investmentpool

Funds

PrivateequityfundsoffundsinvestingintheUSlowermid-marketmanagedbyHighVistaStrategies(formerly

AberdeenUSPEFunds).

Investment thesis

•providesdiversifiedexposuretoUSprivateequity

•committedtofivefundsoffunds.

Value £139.7m

%ofNAV4.7%

Sector

Consumer discretionary

Investmentpool

Private Capital

Innsanddrinksbusinesswithapubestatestretchingfromsouth-westLondontoBristolandtheChannelIslands.

Investment thesis

•defensive,asset-backedbusinessgeneratingrobustcashflowfromitsChannelIslandsoperations

•capitalgrowthgeneratedthroughtargetedcapexwithintheUKestate,bothenhancingcurrentassetsandthe

acquisition of additional pubs

•marketsharegainsandsynergiesfromacquisitions.

Value £135.2m

%ofNAV4.6%

24 Caledonia Investments plc Annual Report 2024

Investments summary

Turn to page 155

Sector

Industrials

Investmentpool

Private Capital

Leadingmanufacturerofcinematographylenses.

Investment thesis

•market-leadingUKmanufacturerofpremium-endcinematographylensesforfilmandTV,foundedin1886

• market growth in streaming and production studios worldwide

•investmentinmanufacturingcapacity,NPDandglobaldistributionnetwork.

Value £105.4m

%ofNAV3.6%

Sector

Information technology

Investmentpool

Public Companies

Leadingdeveloperofcomputersoftwaresystems,applicationsandcloudservices.

Investment thesis

•focusesonMicrosoft’sstrengthasatoptiercloudplatformandaleaderinenterprisesoftware.Inaddition

they are an important player in AI and are quickly integrating AI technology across their product range

•longdurationofgrowthduetolongtermenterprisecloudtransitionwithMicrosoft’seconomicsdrivenby

AzureandMicrosoftOffice365.

Value £84.3m

%ofNAV2.8%

Sector

Information technology

Investmentpool

Public Companies

Oneofthelargestglobalprovidersofproductsandservices,includingenterpriseapplicationsandinfrastructure,

forenterpriseinformationmanagement.

Investment thesis

•revenuegrowthshouldaccelerateduetoincreasingdemandforOraclecloudinfrastructureservices

•longtermeconomicsbenefitfromthecontinuedtransitiontoacloudandsubscriptionbasedmodel.

Value £83.5m

%ofNAV2.8%

Sector

Diversified sector exposure

Investmentpool

Funds

AleadingprivateequityinvestmentfirmfocusedontheAsiaPacificregionwithtotalcommitmentsofover$8bn

across10funds.

Investment thesis

•accesstotop-tiermid-marketprivateequityfundsdiversifiedacrossbuyout,growthandventurecapital

•primarilyinvestsinmid-market,country-specificfundswithproventrackrecordsandstrategies

•committedtofivefundsoffunds.

Value £83.2m

%ofNAV2.8%

Sector

Industrials

Investmentpool

Public Companies

Largestdistributorofairconditioning,heatingandrefrigerationequipmentinNorthAmerica.

Investment thesis

•sustainedinvestmentindigitalisationofthebusinessshouldsupportmarketsharegrowth,marginimprovement

andenhancetheattractivenessofWatscoasanownerofothersmallerdistributors

•continuedpositiveindustrydynamicsshouldleadtostrongcompoundingofearnings.

Value £77.0m

%ofNAV2.6%

Alltrademarksusedonpages24and25arethepropertyoftheirrespectiveownersandtheiruseheredoesnotimplyendorsement.  

Strategic report Corporate governance Financial statements Other informationIntroduction

Public Companies

Strategy

ThePublicCompaniespoolprovidesCaledoniawith

exposure to a concentrated portfolio of high-quality

well-managedbusinesses.Wetakealong-termownership

approachbecausewebelievethatitisbettertoallowthe

companiestodrivereturns,ratherthansimplytrading

them.Thequalitieswefocusonincludeastrongmarket

position,goodandsustainablereturnsoncapitaland

capable management closely aligned with long-term

investors.Weexpectthatacombinationofthesefactors

willrewardlong-termownership.

Caledoniainvestsitsownbalancesheet,soour

strategy does not need to contend with subscriptions

orredemptions.Thisstructureenablesustointroduce

and realise capital to and from the pool when markets

providegoodopportunities.Ourapproachallowsusto

introduce capital into the portfolio with a margin of

safetyaroundeachinvestment,whichcumulatively

providesdownsideprotection.

Theglobalportfoliocomprisestwostrategies,theCapital

portfolioandtheIncomeportfolio,eachgenerallyholding

between15and20companies.Therearefivestocksthat

areheldinbothportfolios.TheIncomeportfolioaimsto

deliveraninitialyieldoninvestedcostof3.5%withthe

dividendpersharefromtheseholdingsgrowingahead

ofinflationoverthelongerterm.TheCapitalportfolio

hasnodividendtarget,isunconstrainedand,asa

consequence,shouldproducehigherreturnsovertime.

Theportfoliosaremanagedbyasingleteam,withthe

same research methodology and operational discipline

usedacrossboth.

Performance

Duringtheyear,thePublicCompaniespoolgenerated

atotalreturnof+12.0%,or+13.7%inlocalcurrencies,

reflectingpositiveperformanceofanumberofour

holdings.Overthelast10yearsthePublicCompanies

poolhasdeliveredreturnsof8.6%p.a.

We believe you build wealth by

owning companies, not trading them

on the stock market. Focused on

‘co-owning’ companies that are built

on solid foundations and generate

cash, we target businesses that we

understand with underlying growth

and pricing power that can deliver

good returns on capital.

Sector

Geography by

revenue generation

NorthAmerica 49%

Europe 16%

Othercountries 16%

Asia 11%

UK&ChannelIslands 8%

Consumerstaples 15%

Materials 14%

Consumerdiscretionary 2%

Healthcare 8%

Industrials 21%

Communicationservices 3%

Informationtechnology 24%

Financials 6%

Realestate 3%

Utilities 4%

Annualised returns (%)

10%

15%

20%

1 year 3 years 5 years 10 years

12%

11%

26 Caledonia Investments plc Annual Report 2024

Performance

Attheyearend,theCapitalportfoliowasvaluedat

£698.2manddeliveredareturnof+14.0%(+16.0%inlocal

currencies)intheyear.Theportfolioisconcentrated,with

18holdingswithnobenchmark.Includingtheimpactof

foreignexchange,overthelast10yearstheCapital

portfoliohasdeliveredreturnsof10.2%p.a.

Operatingperformancewasgenerallygoodacrossthe

portfolio.Thestrongestperformersintermsofshareprice

returnswereHill&Smith(+49.2%),Microsoft(+44.2%),

Fastenal(+43.0%),Oracle(+38.1%)andWatsco(+37.2%).

Theirperformancewasdrivenbyacombinationof

underlying company operating results coupled with future

growthprospects.Hill&Smithdemonstratedstrong

momentum in its US businesses across both composites

andgalvanisingtogetherwithincreasedM&A,andboth

MicrosoftandOraclebenefitedfromstronggrowthin

cloudservices.

Gainswerepartiallyoffsetbynegativecontributions

fromcompaniesincludingAlibaba(-27.9%),Charter

Communications(-21.3%)andCrodaInternational(-19.1%).

Thiswasprimarilyduetocompanyorindustrydynamics.

Forexample,followingaperiodofunderperformance,

Alibaba has undertaken some notable management

changeswithanewCEOandarenewedfocusonits

coreecommercebusiness.Wecontinuetoclosely

monitorallourholdingsastheyadaptthroughtime.

Investment activity

Consistentwithourlong-terminvestmentapproach,

tradingactivityremainedtargeted,primarilywith

increasedholdingsinCrodaInternational,PhilipMorris,

SpiraxSarcoandSymrise.Followingaperiodofstrong

sharepriceappreciation,wecrystalisedgainsonaportion

ofourholdingsinMicrosoft,OracleandWatsco.

Capital portfolio

Significant portfolio investments

Name Business Geography

First

invested

Value

£m

Portfolio

Return

Microsoft Software US 2014 84.3 12.1 44.2

Oracle Software US 2014 83.5 12.0 38.1

Watsco Ventilation products US 2017 57.7 8.3 37.2

Thermo Fisher Scientific Pharma&lifesciencesservices US 2015 46.1 6.6 (1.1)

Texas Instruments Semiconductors US 2018 46.1 6.6 (4.7)

Hill & Smith Infrastructure UK 2011 45.7 6.5 49.2

PhilipMorris Tobacco & smoke-free products US 2016 38.2 5.5 (2.3)

Fastenal Industrial supplies US 2020 37.5 5.4 43.0

Spirax Sarco Steam engineering UK 2011 34.1 4.9 (10.2)

Moody

’

s Corporation Financialservices US 2022 33.0 4.7 26.8

Charter Communications Cable communications US 2017 32.5 4.7 (21.3)

Becton Dickinson Medicaltechnology US 2015 28.6 4.1 (0.9)

Otherinvestments 130.9 18.6

698.2 100.0 14.0

10%

15%

20%

1 year 3 years 5 years 10 years

14%

10%

13%

10%

Annualised portfolio returns - Capital

Opening

value

Investments Realisations Investment

income

received

Closing

value

Total

return

618.0

40.3

(32.7)

(13.3)

85.9 698.2

Portfolio movements (£m) - Capital

“We like to own high-quality

companies that will continue

to provide compounding

returns to shareholders

over the long term. The

unconstrained nature of the

portfolio allows us to focus

on finding these special

companies. When we purchase

shares in new investments or

add to holdings, we look to do

so at attractive prices with a

margin of safety.”

Alan Murran

Co-Head of

Caledonia Public

Companies

Oracle case study

Turn to page 5

Strategic report Corporate governance Financial statements Other informationIntroduction

Public Companies (continued)

Performance

TheIncomeportfoliowasvaluedat£251.6mand

generatedareturnof+6.8%(+7.7%inlocalcurrencies).

LiketheCapitalportfolio,itisconcentrated,comprising

17holdingsandisnotmanagedagainstabenchmark.

Includingtheimpactofforeignexchange,overthelast

10yearstheIncomeportfoliohasdeliveredreturnsof

4.9%p.a.

ThestrongestperformerswereFastenal(+43.5%),

Watsco(+37.7%),RELX(+43.0%),DSSmith(+34.6%)

andSabreInsurance(+61.4%).FastenalandWatscoare

leading distributors in their end markets and continue to

executeparticularlywell.TheperformanceofRELXreflects

itsimprovedgrowthasthebusinesscontinuestoshift

towardsdataandanalytics.DSSmithreceivedtwo

takeoverapproachesduringMarch2024,followingwhich,

wedecidedtoexitourpositionposttheyearend.Sabre

InsurancehasenjoyedastrongrecoveryastheUKmotor

insurancemarketimprovedafterachallengingperiod

lastyear.

Gains were partially offset by weaker share price

performancesfromReckittBenckiser(-24.5%)and

Diageo(-15.2%).ReckittBenckiserwasimpactedby

litigationconcernswithinitsinfantnutritionbusiness.

Diageowasimpactedbytheslowingmacro-environment

andbroaderdestocking,particularlyinitsLatinAmerican

business.Thisfollowsseveralstrongyearsandwehave

usedthesharepriceweaknesstoaddtoourposition.

Investment activity

Theteamaddedonenewcompanytotheportfolio,RELX,

theglobalproviderofinformation-basedanalyticsand

decisiontoolsandmadeselectivepartialrealisationsand

investmentsinexistingportfoliocompaniestotake

advantageofsharepricemovements.

Income portfolio

Significant portfolio investments

Name Business Geography

First

invested

Value

£m

Portfolio

Return

Diageo Alcoholic drinks UK 2020 19.5 7.8 (15.2)

Watsco Ventilation products US 2020 19.3 7.7 37.7

National Grid Transmission & distribution utilities UK 2015 19.2 7.6 3.5

Unilever Consumer goods UK 2019 18.0 7.2 (1.6)

Texas Instruments Semiconductors US 2020 17.5 7.0 (3.5)

SGS Testing & certification Europe 2020 16.8 6.7 8.1

Fortis Transmission & distribution utilities Canada 2020 16.5 6.6 (4.1)

RELX Data analytics & decision tools UK 2023 16.1 6.4 43.0

Fastenal Industrial supplies US 2020 15.6 6.2 43.5

PhilipMorris Tobacco & smoke-free products US 2021 14.9 5.9 (2.1)

LondonMetric REIT UK 2020 14.6 5.8 21.9

Otherinvestments 63.6 25.1

251.6 100.0 6.8

“The strategy offers a resilient

and growing income stream

from a concentrated portfolio

of high quality companies.

We closely monitor the

companies to risk manage

the portfolio appropriately

and continually seek to

improve the investment

process over time.”

Ben Archer

Co-Head of

Caledonia Public

Companies

10%

1 year 3 years 5 years 10 years

Annualised portfolio returns - Income

Opening

value

Investments Realisations Investment

income

received

Closing

value

Total

return

218.9

36.2

(10.8)

(8.5)

15.8 251.6

Portfolio movements (£m) - Income

28 Caledonia Investments plc Annual Report 2024

Case study

Watsco is the largest distributor of air

conditioning, heating and refrigeration

equipment in North America.

£28m

Weighted average cost

22% p.a.

Return since initial

investment (£)

2017

Date of initial investment

Industrials

Sector

£77m

Valuation at 31 March 24

Original investment thesis

• sustained investment in digitalisation of the business should support market

share growth, margin improvement and enhance the attractiveness of Watsco

as an owner of other smaller distributors

• continued positive industry dynamics should lead to strong compounding

of earnings.

WefirstinvestedinWatscoin2017withthebusinessdisplayingmanyofthequality

characteristicswelookfor,includingsignificantbarrierstoentry,productnecessityina

largeandgrowinginstalledbasewithdriversthatsupportarecurringsalesmodel,and

relativescaleversuscompetitors.Thebusinessisdecentralisedwithanentrepreneurial

cultureandalong-termfocusonvaluecreation;wheretechnologyanddigitalisationsit

atthecoreofthebusiness.

SinceDecember2017revenuehasgrownby68%andtheEBITmarginhasimprovedby

2.7%to10.9%.Sinceourinitialinvestmentthesharepricehastripled,andtheinvestment

hasdeliveredatotalreturnof22%p.a.Followingaperiodofsharepriceappreciationwe

recentlycrystalisedgainsonaportionofourholdingandat31March2024,Watscowas

Caledonia’s10thlargestportfoliocompany,representing2.6%ofnetassets.

Share price (US$)

100

200

300

400

500

Feb 17

May 17

Aug 17

Nov 17

Feb 18

May 18

Aug 18

Nov 18

Feb 19

May 19

Aug 19

Nov 19

Feb 20

May 20

Aug 20

Nov 20

Feb 21

May 21

Aug 21

Nov 21

Feb 22

May 22

Aug 22

Nov 22

Feb 23

May 23

Aug 23

Nov 23

Feb 24

Mar 24

Top up

adding ~60%

Top up

adding ~12%

Top up of ~2%

Top slicing of 18% at

an avg price of $379

Opportunistic trading during

Covid adding a net ~50%

across Capital and Income

Initial investment at an avg price of $146

22% annualised total return (£)

Strategic report Corporate governance Financial statements Other informationIntroduction

Private Capital

Strategy

ThePrivateCapitalpoolcomprisesasmallnumber

ofdirectinvestmentholdingsinprivatecompanies,

predominantlyintheUKmid-market.Wefocuson

cashgenerativebusinesseswithstronggrowthpotential.

Wetypicallyinvest£50mto£150minprivatecompanies

withlowleverage,providinglong-termcapitalalongwith

operational and strategic support to portfolio company

managementteams.Unlikemanyprivateequityfirms,

asabalancesheetinvestor,wearenotconstrainedbythe

finitelifeofaprivateequityfund,whichallowsustotake

atrulylong-termapproachtomanagingandrealisingvalue

fromourinvestments.

Performance

At31March2024,thePrivateCapitalportfolioconsisted

ofeightcompanies,withfiveinvestmentsrepresenting

over90%ofvalue.

Theportfoliowasvaluedat£820.3mandgenerateda

returnof+12.3%(+12.9%inlocalcurrencies),drivenbythe

saleofSevenInvestmentManagement(‘7IM’),generating

a£59mor32%uplifttothe31March2023carryingvalue

andgoodoperatingperformanceacrossthemajorityof

theinvesteecompanies.Overthelast10yearsthePrivate

Capitalpoolhasdeliveredareturnof13.9%p.a.

Themajorityoftheportfolioisvaluedonanearnings

multiplebasis,withmultiplesintherange9to14times

currentyearearnings.Gearinglevelsarelow,withnetdebt

typicallyintherangeof2to2.5timesearningsbefore

interest,tax,depreciationandamortisation(‘EBITDA’).

7IM Case study

Turn to page 7

Concentrating on mid-market

companies, we take a long-term

approach that is focused on delivering

enduring value in the shape of capital

growth and a current yield

throughout the business cycle.

“We take a long-term approach

working closely with our

portfolio companies to deliver

enduring capital and support.

This, along with our buy-to-

own, rather than buy-to-sell,

philosophy differentiates us

from other private equity

managers. We seek to invest in

high quality, well established,

UK centric businesses with a

mid-market focus.”

Tom Leader

HeadofPrivate

Capital

Annualised pool returns - Private Capital

10%

20%

30%

Over 1 year Over 3 years

Over 5 years

Over 10 years

12%

24%

14%

Opening

value

Investments Realisations Investment

income

received

Closing

value

Total

return

824.0

161.2

(255.8)

(20.3)

111.2 820.3

Portfolio movements (£m) - Private Capital

Geography by

revenue generation

UK&ChannelIslands 45%

Europe 32%

NorthAmerica 12%

Asia 7%

Othercountries 4%

Sector

Industrials

 44%

Healthcare 2%

Financials 21%

Consumerdiscretionary 24%

Materials 3%

Consumerstaples 1%

Informationtechnology 1%

Othersectors 4%

1.IncludesAIR-servEuropeand

CookeOptics

30 Caledonia Investments plc Annual Report 2024

Investment activity

Weinvestedatotalof£161.2mduringtheyear,primarily

drivenbyour£142.5macquisitionofAIR-servEuropein

April2023.Wereceived£255.8mofproceedsfromthe

saleof7IMinJanuary2024.

AIR-serv Europe case study

Turn to page 32

Portfolio summary

Cobepa,theBelgian-basedinvestmentcompany,owns

adiverseportfolioofprivateglobalinvestments.The

majorityofthebusinesseswithintheCobepaportfolio

continuetotradewell,withmanydeliveringgood

performanceandvaluationprogression.Thevaluationat

31March2024was£181.0m,areturnof4.3%fortheyear.

AIR-servEurope,aleadingdesignerandmanufacturer

ofair,vacuumandjetwashmachines,whichitprovides

to fuel station forecourt operators across the UK and

WesternEurope,wasacquiredbyCaledoniainApril2023.

Thebusinesshassincereportedyear-on-yeargrowth,

tradingaheadofexpectations.Havingbeenheldatequity

purchasecostsinceacquisitioninApril2023,thebusiness

isnowvaluedonanearningsbasis,leadingtoanincrease

invalueof£28m.Thevaluationat31March2024was

£170.1m,areturnof19.4%fortheyear.

StonehageFleming,theinternationalmulti-familyoffice,

continuestodelivergoodrevenueandmargingrowth

acrosseachoftheFamilyOffice,InvestmentManagement

andFinancialServicesbusinesses,drivenbyclientwinsand

increasedactivitylevels.Thevaluationat31March2024

was£168.5m,areturnof18.8%fortheyear.

LiberationGroup,aninnsanddrinksbusinesswithapub

estatestretchingfromsouth-westLondontoBristoland

theChannelIslands.Thebusinesshasbeenadversely

impactedbythecostoflivingcrisis,reducingconsumer

discretionaryincomesandsustainedcostinflation,

particularlyUKenergycosts.Profitabilityandrevenue

growthcontinuestoimproveandtheoptimisationof

theCirrusInnsbusiness,acquiredinDecember2022,

isongoing.Thevaluationat31March2024was£135.2m,

areturnof2.6%fortheyear.

CookeOptics,aleadingmanufacturerofcinematography

lenses,aspreviouslyreported,hasbeenheavilyimpacted

by the Hollywood writers’ strike which started in early

May2023andthesubsequentactors’strike.Bothdisputes

wereresolvedinNovember2023.Wearepleasedtosee

improvementindemandforCookeOptics’coreproducts

andthesuccessofthenewSP3‘prosumer’range.The

valuationat31March2024includesa10%equitydiscount

to reflect continued uncertainty around the timing and

natureofthepost-strikerecovery.Thevaluationat31

March2024was£105.4m,areturnof(14.9)%fortheyear.

Significant pool investments

Name Business Geography

First

invested

Equity held

Value

£m

Pool

Return

Cobepa Investmentcompany Belgium 2004 5.2 181.0 22.1 4.3

AIR-servEurope Forecourtvending Europe 2023 99.8 170.1 20.7 19.4

Stonehage Fleming Familyofficeservices Guernsey 2019 37.2 168.5 20.5 18.8

LiberationGroup Pubs,bars&inns Jersey 2016 83.6 135.2 16.5 2.6

CookeOptics Cine lens manufacturer UK 2018 98.0 105.4 12.8 (14.9)

Otherinvestments 60.1 7.4

820.3 100.0 12.3

Strategic report Corporate governance Financial statements Other informationIntroduction

Case study

AIR-serv Europe is a leading

designer and manufacturer of air,

vacuum and jet wash machines.

£143m

Original investment

19%

Return since initial

investment

countries

c.220

employees

c.22,000

machines

2023

Date of initial investment

Industrials

Sector

£170m

Valuation at 31 March 24

Investment thesis

• expand the installed machine estate, focusing on:

- jet wash and incremental air opportunities in the UK

- air growth in existing and new European geographies

• create a standalone business, investing in people, operations and governance

• drive performance efficiencies and cash generation.

HeadquarteredinWigan,thebusinessisaleadingproviderofturnkeysolutionsforair,

vacuumandjetwashmachines.Itservesalargeandembeddedcustomerbaseoffuel

stationforecourtoperatorsacrosstheUKandWesternEurope,aswellasarangeof

commercialpartnersacrossanumberofendmarkets.

CaledoniaPrivateCapitalacquiredAIR-servEuropeinApril2023,investing£143m.We

havesinceworkedwiththebusinesstoenhanceitsvaluecreationplanandsupported

investmentintheteam,withtheappointmentofanewNon-ExecutiveChairandChief

CommercialOfficer.Inthelast12monthsAIR-servEuropehasincreaseditsestateby

over1,000newmachinesandhasinvestedover£12mincapextosupportitsgrowth

andmaintainitsunrivalledqualityofservice.

Private Capital (continued)

32 Caledonia Investments plc Annual Report 2024

“Within Private Capital our

strategy is to focus on high-

quality companies operating

predominantly in the mid-

market. Our approach is to

work with management to

drive value through operational

improvement over the business

cycle. Our partnership with AIR-

serv over the first year has got

off to a good start and we look

forward to working with the

team to deliver the next stage

of growth.

”

Tom Leader

HeadofPrivateCapital

Strategic report Corporate governance Financial statements Other informationIntroduction

Annualised pool returns - Funds

Funds

We seek diversified fund holdings

in private capital that provide long-

term returns in geographic markets

that counterbalance our quoted

equity and UK-centric private

capital investments.

Strategy

WeinvestinfundsoperatinginNorthAmericaandAsia

withabiastobuyouts.Thepoolprovidesattractive

diversification,investingin74fundsmanagedby42

managerswithanunderlyingportfolioofover600

companies,acrossawiderangeofsectorsand

companysizes.

TheNorthAmericanbasedfunds,whichrepresent59%

oftheFundspool(18%ofCaledonia

’

sNAV),investintothe

lowermid-market,withafocusonsmalltomediumsized,

oftenowner-managed,establishedbusinesses.Thesefunds

regularlyprovidethefirstinstitutionalinvestmentintothese

businesses,andsupporttheirprofessionalisationand

growth,bothorganicallyandthroughM&Aactivity.

Realisationsaretypicallythroughtradesalesortoother,

largerprivateequityfunds.Thepoolisacombinationof

directlyownedfunds(45%ofFundspool),withabroad

range of managers generally managing funds under

US$750m.Thebalanceisinfundsoffundsinvestments

(13%ofFundspool)withHighVistaStrategiesUSprivate

equityfunds,ourlargestsinglemanageroverfiveseparate

fundswithhighlydiversifiedportfolios.

OurAsiafundswhichrepresent41%oftheFundspool

(13%ofCaledonia

’

sNAV)investacrossawiderangeof

sectors,whicharesettobenefitfromwiderdemographic

trends,suchashealthcareandtechnology.Thefunds

typicallyinvestinbusinessesintheearlyyearsofsignificant

growth,havingsuccessfullydevelopedtheirbusinessmodel.

Whilstfocusedonlocalmarkets,anumber,particularly

thosewithahealthcarefocus,alsoinvestintotheUS.The

marketislessdevelopedthaninNorthAmericawith

divestments,intheabsenceofamaturebuyoutmarket,

mainlyachievedthroughanIPOortradesale.Thepoolisa

combinationofdirectlyownedfunds(23%ofFundspool),

withabroadrangeofmanagers,thebalance(18%ofFunds

pool)isinvestedwithAsiaAlternatives,AxiomandUnicorn,

allfundsoffundsproviders,investinginbuyout,growth

andventurecapital.

“We have developed

relationships with talented

fund managers and, through

careful selection, have

generated strong long-term

investment returns.”

Jamie Cayzer-Colvin

Head of Funds

Geography by region

N.America 59%

Asia 41%

By strategy

N.Americabuyout 45%

N.Americafundoffunds 13%

N.Americaother 1%

Asiafundoffunds 18%

Asiaventureandgrowth

 23%

10%

15%

20%

Over 1 year Over 3 years

Over 5 years

Over 10 years

17%

16%

17%

Opening

value

Investments Realisations Investment

income

received

Closing

value

Total

return

873.8

108.6

(72.0)

(3.6)

19.5 926.3

Portfolio movements (£m) - Funds

34 Caledonia Investments plc Annual Report 2024

Performance

At31March2024,thepoolwasvaluedat£926.3m,

generatingatotalreturnof+2.2%,or+4.3%inlocal

currencies,drivenbycontinuedpositiveperformance

fromourNorthAmericanholdings(+9.8%inlocalcurrency)

partiallyoffsetbythedeclineinthevalueofourAsia

holdings(-3.1%inlocalcurrency)reflectingthemore

challengingmarketconditionsintheregion.Overthelast

10years,theFundspoolhasdeliveredreturnsof17.3%p.a.

LookingattheperformancedriversinourNorthAmerican

primaryfundprogramme,alongsiderealisationactivity,

robustoperatingperformancecontinuestobeakeydriver

ofreturns.WithinourAsiaportfolio,webelieveunderlying

portfoliosarewellpositioned,andtradingisgenerally

healthy.However,valuationshavecontinuedtobe

impacted by the weakness in local public markets and

reducedattractivenessofforeignpublicmarketsforIPOs.

Investment activity

TheFundspoolinvested£108.6movertheyear,with63%

deployed into North American funds and the balance into

Asiafunds.Distributionsof£72.0mwerebroadlysplit

75%/25%betweenNorthAmericaandAsia.Aftera

quieterfirsthalf,wehaveseenameaningfulincrease

inactivityintheNorthAmericanportfolio,especially

inthelastquarterofthefinancialyear,withourunderlying

managers cautiously optimistic that exit markets will

continuetoimprove.InourAsiaportfolio,giventhe

marketvolatilityandmacrouncertaintyintheregion,

alongsideitsearlierstagefocus,weexpectthepaceof

distributionstotakelongertoregainmomentum.

Portfolio maturity

Ourprimaryfundsportfoliohasaweightedaverageage

ofapproximately4.3years.Theweightedaverageage

ofourNorthAmericanholdingsis4.0years,withinthe

window of a four to six year holding period typically

targetedbyourmanagers.Giventheearlierstagefocus

ofourAsiaportfoliotheweightedaverageageofthese

holdingsis5.1years.Asnotedabove,weexpectexit

activityinAsiatotakelongertoimprove.

Portfolio maturity (excluding funds of funds)

<1year 5%

1-3years 30%

3-5years 29%

5-7years

 24%

7yearsplus 12%

Uncalled commitments

Duringtheyear,wemadeanewcommitmenttoaleading

North American mid-market industrials fund and one

secondarypurchaseofanAsiafund.Wehaveagood

investmentpipelineofpotentialnewfundcommitments

andinparticular,weexpectanumberofourUSmanagers

tobefundraisingoverthenext12-18months,asbroader

marketconditionsforexitsinthismarketimprove.

At31March2024,uncalledcommitmentswere£377m,

66%toNorthAmericaand34%toAsia.

Significant manager exposure

Name Business Geography

First

invested

Value

£m

Pool

Return

HighVista Strategies

Funds of funds US 2013 139.7 15.1 2.7

Axiom Asia funds Funds of funds Asia 2012 83.2 9.0 (0.3)

Decheng funds Privateequityfunds Asia/US 2015 59.0 6.4 19.6

AsiaAlternativesfunds Funds of funds Asia 2012 44.2 4.8 (3.1)

Unicorn funds Funds of funds Asia 2012 39.9 4.3 (1.8)

Ironbridge Funds Privateequityfunds Canada 2016 35.9 3.9 11.4

Stonepeak funds Privateequityfunds US 2015 34.9 3.8 (2.8)

Boyne funds Privateequityfunds US 2017 33.8 3.6 41.1

Otherinvestments 455.7 49.1

926.3 100.0 2.2

Funds

1

FormerlyAberdeenUSPEfunds.

New Heritage Capital case study

Turn to page 36

Strategic report Corporate governance Financial statements Other informationIntroduction

Funds (continued)

Case study

$50m-$200m

Enterprise value

$15m-$50m

Total equity investment

$30m-$150m

Revenue

10-12

Platform investments per fund

$4m-$20m

EBITDA

1-3

Investments per annum

Founded in 2006 and based in Boston, New Heritage Capital

(‘NHC’) pursues control-oriented investments in small companies

in the business services, healthcare services and specialised

manufacturing sectors.

Typically NHC will invest in closely-held or family/founder-owned

companies where founders are looking to retain a stake in the

business by rolling their proceeds and remain for the next phase

of growth alongside the team at NHC to create value.

Target company criteria

Portfolio company snapshots

FMS –ProviderofSaaS-basedbusinessprocessoutsourcingservicestomulti-unit

retailers,withfocusonindependentgrocery.

Carnegie –Enrolmentstrategyandmarketingsolutionsforhighereducation.

SoldinFebruary2024.

Revela Foods –Leadingdeveloperandmanufacturerofsavouryfoodingredients,

seasoningsandflavourings.SoldinJanuary2024.

Caledonia’s commitment

CaledoniafirstidentifiedNHCin2015,aheadofmakingacommitmenttoitsthird

fundin2020andmadeafollowoncommitmenttoNHCIVin2022.

CaledoniaservesontheLimitedPartneradvisoryboardforNHCIIIandNHCIV.

Fund name NHC III NHC IV

Vintage year 2019 2024

Fund size $260m $438m

Caledoniaʼs commitment $20m $30m

Funds (continued)

36 Caledonia Investments plc Annual Report 2024

“The lower mid-market

is a core part of our North

American strategy and

we have built a successful

relationship with New Heritage

Capital over many years.”

Eloise Fox

Director,Funds

Strategic report Corporate governance Financial statements Other informationIntroduction

Financial review

Rob Memmott

ChiefFinancialOfficer

Ourdiversifiedportfoliounderpinnedanotheryear

ofgrowthforCaledonia,withthecompanyreporting

aNAVTRof7.4%,despitecontinuingchallengesfrom

elevatedlevelsofinflation,higherinterestratesand

geopoliticaluncertainty.Thiscontinuedpositive

performance has further extended our long-term track

recordofconsistentreturns,withthecompanyreporting

NAVTRof10.0%over10years,a7.2%and4.2%respective

outperformance of inflation and the FTSE-All Share index

overthesameperiod.

Caledoniaendedtheyearwithnetassetsof£2,965m

(5369ppershare)(2023:£2,798m;5068ppershare),

with the uplift largely reflecting capital gains and

investmentincomeacrossourportfolio,partiallyoffset

byforeignexchangemovements,dividendpayments

toourshareholdersandthegroup’scostbase.

Change in net assets

3,200

3,000

2,900

2,800

2,700

3,002.33.2

2,965.3

(37.0)

£m

Net

investment

gains

Opening

value

Portfolio

investment

income

FX Management

expenses

Other Dividends

paid

Closing

value

NAV

before

dividends

(31.3)

(38.8)

47.1

224.1

2,798.0

Total comprehensive income

The company seeks to generate total profits from both

investmentincomeandcapitalgrowth.Fortheyearended

31March2024,thetotalcomprehensiveincomewas

£203.4m(2023:£144.0m),ofwhich£40.5m(2023:

£20.6m)derivedfromincomeand£162.9m(2023:

£123.4m)fromcapital.

£m

31Mar

2023 Investments Realisations

Investment

income

Total

return

31Mar

2024

Totalinvestmentportfolio 2,534.7 346.3 (371.3) (45.7) 232.4 2,696.4

Otherinvestments

260.2 (2.9) (228.4) (10.9) 18.0

Total investments

2,794.9 343.4 (599.7) (45.7) 221.5 2,714.4

Net cash 221.6 227.4

Othernet(liabilities)/assets

(218.5) 23.5

Net assets 2,798.0 2,965.3

Summary balance sheet

1. Investmentincomeisnetofthemovementinaccruedincomeof£1.4m.

2. Otherinvestmentscompriselegacyinvestmentsandcash,receivablesanddeferredtaxliabilityinsubsidiaryinvestmententities.

3. Totalinvestmentportfolioincludes£19.0mofinvestmentsthatareclassifiedasassetsheldforsaleintheGroup’sStatementoffinancialposition.

4. Movementinothernet(liabilities)/assetsprimarilyrelatestotherepaymentoftheloantoanon-consolidatedsubsidiary.

Our robust balance sheet has no

structural leverage. With total

liquidity of £477m we are well

positioned to take advantage

of new investment opportunities.

38 Caledonia Investments plc Annual Report 2024

Revenue performance

Totalcomprehensiveincomewas£40.5m(2023:£20.6m),

anincreaseof£19.9m,primarilydrivenbythe£14.7m

investmentincomefromanon-consolidatedintra-group

entityandamovementinthetaxchargeof£6.1m.

Investmentincomeintheyeartotalled£47.1m,£3.9m

higherthantheprioryear.Investmentincomefrom

thePrivateCapitalpoolwasto£21.8m(2023:£20.8m).

InvestmentincomefromPrivateCapitalwas£21.7m

(2023:£20.6m).InvestmentincomefromtheFunds

poolwas£3.6m(2023:£1.8m).

Investmentincomefromotherinvestmentstotalled

£14.7mrepresentingadistributionpaidbyanintra-group

non-consolidatedentity.Thisprimarilycomprisedincome

from the Funds pool and treasury income retained by the

subsidiaryovertheprecedingfouryears.

Thecompany’srevenuemanagementexpenseswere

£1.6mhigherthanlastyearat£22.9m(2023:£21.3m),

reflectinghigherpersonnelexpensesof£0.9m,primarily

drivenbyaninflationaryincrease,coupledwithanincrease

intheaveragenumberofemployeesinourinvestment

teamstosupportourgrowth.Thiswaspartiallyoffsetby

a reduction in pension costs on our closed defined benefit

scheme.Therewasalsoanincreaseinothercosts,

primarilydrivenbyanincreaseinpropertyexpensesand

marketingandcommunicationexpenditure.

Capital performance

Totalcomprehensiveincomewas£162.9m(2023:£123.4m).

Themovementcomparedtolastyearwasgeneratedby

higherlevelsofcapitalgainsachievedbyourinvestments.

Ourinvestmentportfoliocontinuedtoprovideadegreeof

diversification,generatinggainsovertheyear.Netfairvalue

gainsfromtheportfoliowere£185.3m(2023:£126.4m),

andtogetherwithportfolioinvestmentincome,as

describedabove,of£47.1m(2023:£43.2m)generateda

totalreturnof£232.4m(2023:£169.6m),an8.7%return.

Foreignexchangedetractedfromperformance,with52%

ofourNAVdenominatedinUSdollars,predominantlythe

2%strengtheningofSterlingagainsttheUSdollarresulted

inthe£38.8mlossacrossourinvestmentpools.Further

informationonthekeydriversofperformanceacrossour

investmentportfoliocanbefoundonpages22to37.

Withinthenetfairvaluegainsfromotherinvestmentsis

alossof£10.9mrelatedprincipallytoforeignexchange

lossesonloansandtaxmovementsinanon-consolidated

subsidiary.Theloantothenon-consolidatedsubsidiarywas

fullyrepaidat31March2024.Thereisareductionof£3.9m

onproperty(2023:£1.4mreduction),reflectinghigher

yieldsoncommercialproperties.

The company

’

s capital management expenses relating

toperformanceawardswere£8.3m(2023:£8.2m).

Transactioncostsof£0.1m(2023:£0.4m)wereincurred,

mainlylinkedtoduediligenceworkonnewprivateequity

fundinvestments.

31Mar2024 31Mar2023

£m Revenue Capital Total Revenue Capital Total

Investmentincome-portfolio

47.1 - 47.1 43.2 - 43.2

Netgainsonfairvalueinvestments-portfolio

- 185.3 185.3 - 126.4 126.4

Total return 47.1 185.3 232.4 43.2 126.4 169.6

Investmentincome-otherinvestments

14.7 - 14.7 - - -

Net(losses)/gainsonfairvalueinvestments-otherinvestments

- (10.9) (10.9) - 6.6 6.6

Netlossesonfairvalueproperty - (3.9) (3.9) - (1.4) (1.4)

Otherincome 0.9 0.6 1.5 0.8 1.3 2.1

Total revenue 62.7 171.1 233.8 44.0 132.9 176.9

- ongoing management (22.9) - (22.9) (21.3) - (21.3)

- performance awards - (8.3) (8.3) - (8.2) (8.2)

- transaction costs - (0.1) (0.1) - (0.4) (0.4)

-exchangemovementsandother (0.7) - (0.7) - - -

-othertransactionswithintra-group(non-consolidated)entities

(0.2) - (0.2) (0.1) - (0.1)

Net finance costs (0.2) - (0.2) 2.3 - 2.3

Taxation and other 1.8 0.2 2.0 (4.3) (0.9) (5.2)

Total comprehensive income 40.5 162.9 203.4 20.6 123.4 144.0

Income statement

1.Totalinvestmentincomefromtheportfolioandotherinvestments£61.8m(2023:£43.2m).

2.Totalnetgainsonfairvalueinvestmentsfromtheportfolioandotherinvestments£174.4m(2023:£133.0m).

3.Othertransactionswithintra-group(non-consolidated)entitiesincludesa£7.2mforeignexchangegain(2023:£nil)onanintra-grouploanfacilityanda£7.2m

(2023:£0.1m)interestexpenseontheintra-grouploanfacilitywhichisreflectedinfinancecostsintheGroupstatementofcomprehensiveincome.

CaledoniaallocatesexpensesbetweenrevenueandcapitalinaccordancewithguidancefromtheAssociationofInvestmentCompaniesandbroadermarket

practice.Inadditiontotransactioncosts,share-basedpaymentexpensesareallocatedtocapital.Caledonia’sshare-basedcompensationisdirectlylinkedto

investmentperformanceandisthereforeviewedasanexpenseagainstgainsoninvestments.

Strategic report Corporate governance Financial statements Other informationIntroduction

Financial review (continued)

Ongoing charges

Ourongoingchargesratiofortheyearwas0.81%

(2023:0.77%).Theongoingchargesratioiscalculated

onanindustrystandardbasis,comprisingpublished

managementexpensesoverthemonthlyaverage

netassets.Fulldetailsofthecalculationareprovided

onpage154.

Valuation

Thecompanymaintainsaconsideredvaluationapproach

toallinvestments,applyingcautioninexercising

judgementandmakingthenecessaryestimates.Our

valuationmethodologyisdescribedonpages156to157.

Alllistedinvestmentsarevaluedbasedontheclosingbid

priceontherelevantexchangeasat31March2024.

PrivateCapitalinvestmentsarevaluedbiannually,

principallyonanormalisedEBITDA/marketmultiplebasis,

inlinewiththelatestIPEVguidelines.Ourholdingin

Cobepaisderivedfromtheexternalvaluationitprepares.

TheFundspoolvaluationsarebasedonthemostrecent

valuationsprovidedbythefundmanagers,subjecttocash

movementsfromthevaluationdate.WithinourFunds

pool,wealsoreviewedtheunderlyingvaluation

methodologies adopted by our fund managers and were

satisfiedthatthetechniquesutilisedwereappropriate.

TheNAVoftheFundspoolcomprised0.9%basedon

valuationsdated29February2024,74.6%dated31

December2023,24.4%,mostlyfundsoffundsholdings,

dated30September2023and0.1%at30June2023.

Thefollowingchartsummarisesthesourceofvaluations

acrosstheportfolio,illustratingthat76%oftheportfolio

valueissubjecttoeithermarketpricesorindependent

externalvaluation.

Pool assets by valuation method

Quotedprice 35%

Fund NAV

 41%

Earnings 24%

Dividend

Werecognisethatareliablesourceofgrowingdividends

isanimportantpartofshareholderreturnoverboththe

shortandlongertermandhaveextendedourrecordof

growingannualdividendsto57consecutiveyears.Wepaid

aninterimdividendof18.93ppershareon4January2024

andhaveproposedafinaldividendof51.47p.Thetotal

annualdividendfortheyearof70.4pisanincreaseof4.5%

onlastyear.

Includingtheproposedfinaldividend,thedividendstobe

paidoutofrevenueearningsfortheyearended31March

2024total£38.3m,whichwascoveredbynetrevenuefor

theyearof£40.5m.

Capital allocation

Prudent and disciplined management of our balance sheet

is key to its continued strength and to ensure an efficient

allocationofcapital.Wehaveperformedadditional

modellingandstresstestingduringtheyear,whichhas

informedourviabilityassessment,detailsofwhichare

includedonpage62.

Toensurethatwemaintainabalancedportfolio,each

ofourinvestmentpoolshasastrategicallocationrange

(seepage22).At31March2024,allofourinvestment

poolswerewithintheirstrategicallocationrange,albeit

bothourPublicCompaniesandPrivateCapitalpoolsare

atthelowerendoftheirrespectiveranges.

Alongsideallocationtoourinvestmentstrategies,weare

committedtoourdividendpolicyand,whenappropriate,

sharebuybacks.AsmorefullyoutlinedintheChair’s

andChiefExecutiveOfficer’sstatementspages 12to16,

wearelimitedinthenumberofshareswecanrepurchase.

However,withthesharestradingatasignificantdiscount

toNAV,thecompanyhaspurchasedandcancelled

290,219sharesatanaveragediscountof36%during

MarchandApril2024,resultingina10.1pNAVper

shareaccretion.

1. IncludesPrivateCapital

investmentinCobepa

40 Caledonia Investments plc Annual Report 2024

Cash flows, liquidity and facilities

Ournetinvestmentcashflowswereaninflowof£27.6m.

Investmentsintoourportfoliototalled£343.7m,relating

mainlytoourPrivateCapitalinvestmentintoAIR-serv

Europeof£142.5m,£76.5mofinvestmentintoourPublic

Companiespooland£108.6mofinvestmentintoour

Fundspool.Realisationsfromourportfoliototalled

£371.3m,relatingtothesaleofourPrivateCapital

investment7IMfor£255.8m,realisationsofourPublic

Companiesholdingsof£43.5mand£72.0mofdistributions

fromourFundspool.

Afterinvestmentincome,managementexpensesand

dividendpaymentstoourshareholders,netcashinflow

was£5.8m.Movementinnetcashisanalysedasfollows:

Movement in net cash £m

At31March2024,ournetcashwas£227.4m(31March

2023:£221.6m).Thiscombinedwithourundrawn

revolvingcreditfacilityof£250m,providesthegroup

withtotalliquidityof£477.4m.

Uncalled commitments

OurtotaluncalledcommitmentswereUS$476m

(£377m),split66%inNorthAmericaand34%Asia.

DuringtheyearwecommittedUS$59m.

Uncalled commitments US$m

Treasury management

Ourtreasurydepartmentprovidesacentralservice

to group companies and conducts its operations in

accordancewithclearlydefinedguidelinesandpolicies.

Treasury transactions are only undertaken as a

consequence of underlying commercial transactions

orexposuresandwedonotseektotakeactive

riskpositions.

It is the treasury function’s role to ensure that the group

hassufficientavailablefundsandfacilitiestomeetits

needsintheforeseeablefuture.Creditfacilitiesofthe

grouptotalled£250m,comprising£112.5mfromING

GroupexpiringinJuly2025and£137.5mfromRBSI

expiringinNovember2027.Oneoftheoutcomesfrom

thecapitalallocationmodellingdescribedabovehas

informedanongoingreviewandrenewalofour

creditfacilities.

61%ofournetassetvalueisnon-Sterlingdenominated.

Wedonothedgeourforeigncurrencyexposure.

However,thisriskisfullyrecognisedbythebusiness

and considered carefully within our risk

managementapproach.

Shareholder communication

SincejoiningCaledoniainSeptember2023,oneof

theareasIhavefocusedonhasbeentoenhance

thecompany’sinvestorrelationsandcommunications

programmetoensureourinvestmentpropositioniswell

understoodandrecognisedbythemarket.Aspartofthis

process,wehaverecentlyreviewedandmadesignificant

updatestoourmonthlyfactsheet,andhaveincreased

our disclosures and case studies in the annual report and

halfandfullyearresultspresentations.Wewillcontinue

toevolvethisinfutureperiods.

Ihavealsoreviewedthecompany’sshareholder

reportingcycle.Goingforward,wewillcontinueto

announceamonthlyNAVandfactsheet,whichcapture

movementsinthevalueofourPublicCompaniesand

Fundsinvestmentpools,foreignexchangemovements

andkeynewsflow.OurPrivateCapitalpoolisrevalued

twiceayearandthesevaluationswillbeincludedinour

MarchandSeptemberNAVandfactsheets.Detailed

analysisandcommentaryonallofourinvestmentpools

will be released in our half and full-year results

announcements.

Rob Memmott

ChiefFinancialOfficer

20May2024

300

200

100

-10 0

-200

£m

Opening

value

Investments

- portfolio

Realisations

- portfolio

Investment

income

received

Dividends

paid

Closing

value

Management

expenses

& other

221.6

227.4

371.3

43.8

(28.6)

(37. 0)

(343.7)

600

500

400

300

200

100

Opening

value

Drawdowns New

commitments

Other Closing

value

523.8

(116.1)

59.6 8.6 475.9

Strategic report Corporate governance Financial statements Other informationIntroduction

Sustainability

At Caledonia we are committed to

building our business for the long

term. This section explores how

we manage our business, acting

responsibly for our employees

and wider stakeholders, and, as

an investment company, how we

approach our investment decisions

responsibly, managing our

investment portfolio for today

and the future.

Our people and culture

Centred around a collection of values that

shape our approach to every aspect of

investing, our team is key to delivering

long-term performance. We seek to create

an environment that enables us to attract,

retain and develop exceptional people.

• Employee engagement

• Intern programme

• Equality, diversity and inclusion

• Working environment

• The Caledonia Investments

Charitable Foundation

Further information on our stakeholders

in the Section 172 statement

Turn to page 74

42 Caledonia Investments plc Annual Report 2024

“I really appreciate being

able to be more long-term and

accountable for the investment

decisions I make. I want to see

the consequences of my actions

and stand over them.”

Employee

Environment

We continue to recognise the importance of

communicating ESG performance clearly to

our stakeholders. We recognise a need to

support the journey to net zero, with a

commitment to supporting a sustainable

future as we deliver investment performance

for our shareholders over the long term.

Task Force on Climate-Related Financial

Disclosures (‘TCFD’)

Our second standalone TCFD

report sets out our progress

towards meeting all TCFD

recommendations and can be

found at www.caledonia.com

We recognise that the level of detail provided

in our TCFD report may not be required by all

stakeholders, so a summary is provided on

pages 55 - 56.

Responsible investment

Acting responsibly is a key part of our long-

term investment philosophy. We commit to

constructive, long-term engagement with the

companies and funds in which we invest,

believing that careful and thoughtful

stewardship is essential to addressing

Environmental, Social and Governance (‘ESG’)

risks and to driving positive change.

• Our investments

• Public Companies

• Private Capital

• Funds

Strategic report Corporate governance Financial statements Other informationIntroduction

Sustainability (continued)

Our people and culture

Employee engagement

Lastyear,wecompletedourfirstcolleagueengagement

surveytohelpusbetterunderstandtheviewsofour

employeesandhowwecancontinuetodevelopand

improve.Wereceiveda94%responseratetoan

anonymoussurveyconductedbyathird-partyprovider

andweredelightedthat98%ofthosewhoparticipated

wouldrecommendCaledoniaasa“greatplacetowork”.

Ahealthyandvibrantculture,builtaroundasetofaligned

values,isfundamentaltothesuccessofanybusiness.

Thisyear,asdetailedintheChiefExecutiveOfficer’s

statementonpage16,wesoughtinvaluablefeedback

from employees and other stakeholders to articulate

whatmakesCaledoniasounique.Writtenbyabroad

crosssectionofemployees,wecreatedournew

manifesto,builtaround‘timewellinvested,’tounderpin

andclearlyarticulateourculture,valuesandpurpose.

ForfurtherinformationonCaledonia’smanifesto,please

visitourwebsitewww.caledonia.com

Ourteamiskeytodeliveringlong-termperformance.

At Caledonia we seek to create a culture that enables us

toattract,retainanddevelopexceptionalpeople.Weare

committedtocreatinganinclusiveenvironmentwhereour

employeescandevelopandcontributefully,underpinned

bygoodremunerationpackages,favourableparentalleave

policiesandhealthandwellbeingsupport,alongside

traininganddevelopmenttosupportprogression.Further

information on our remuneration policy can be found in

theDirectors’remunerationreportonpages90to108.

AtCaledonia,weoperateaflattermanagementstructure

thanisoftenfoundinmanyothercompanies.Honestand

opencommunication,bothonaformalandinformalbasis,

isencouraged.Wetaketimetonurturethepersonal

andprofessionalgrowthofcolleagues,whoenjoy

regular communication through informal channels such

asbi-weeklystafflunches,withmoreformaldialogue

takingplaceinregularteammeetings,off-sitestrategy

andteambuildingdays,togetherwithannual

performanceappraisals.

Dedicating time to our people, giving it

generously to nurture their growth, both

personal and professional.

44 Caledonia Investments plc Annual Report 2024

Intern programme

Formanyyears,Caledoniaprovidedinternship

opportunitiesonaninformalbasis.In2021,we

created a formal intern programme to demonstrate

ourcommitmenttodevelopingfuturetalentwithinthe

investmentmanagementindustry.Successfulcandidates

arethosewhowebelievewillbenefitthemostfromthe

experience.Withsupportfromanindependentfacilitator

andinvolvementfromemployeesacrossallinvestment

teamsandbusinessfunctions,the‘Sealions’programme

providesinternswithauniqueinsightintoCaledonia

andfirst-handaccesstoinvestmentmanagement,helping

buildskillsfortheirfuturecareers.Weregularlywelcome

our growing Sealions programme alumni back to

Caledonia,creatinganimportantnetworkoftalent

forthefuture.

Wewelcomedaverysuccessfulcohortofinternslast

yearandweredelightedthat100%ofrespondentsto

ourpost-coursesurveyratedtheoverallprogrammeas

“excellent”andwouldrecommendittoothers.Following

asuccessfulapplicationprocess,welookforwardto

welcomingthisyear’sinternsinJune.

Equality, diversity and inclusion

AtCaledonia,webelievethatadiverseworkforcecreates

theoptimumenvironmentinwhichourbusinesswill

continuetothriveandgrow.

Ouremploymentandrecruitmentpoliciesarecompliant

withrelevantUKlegislation.Recruitment,development

andpromotionarebasedsolelyonsuitabilityfortherole.

Wewillnotdiscriminateonthebasisofgender,sexual

orientation,maritalstatus,pregnancy,gender

reassignment,age,race,nationality,ethnicity,

disability,politicalorreligiousbelief.

Caledoniaiscommittedtoincreasingdiversityand

inclusionovertime.Wearemindfuloftheneedfororderly

succession planning and ensuring an appropriate mix of

skills and experience is maintained both on the board and

throughoutourbusiness.

At31March2024thegendersplitatdifferentlevelswithin

ourbusinessisasfollows:

“Being part of the intern mentorship

scheme at Caledonia was transformative.

The support and encouragement I

received allowed me to see the potential

in myself that I wasn’t aware of before.

It widened my horizons, enriched my

understanding of the company and

created opportunities for development

that I didn’t know were possible.”

Intern alumni

Investment and support

employees 2023

Male 68%

Female 32%

Investment employees

Male 37%

Female 63%

Support employees

Investment and support

employees 2024

Male 70%

Female 30%

Investment employees

Male 35%

Female 65%

Support employees

1.Excludingnon-executivedirectors

Caledonia operates a flatter management structure than is often found in

manyothercompaniesand,forinformation,55%(2023:56%)ofdirect

reportstomembersofourInvestmentCommitteearefemale.

Malenumber(%) Femalenumber(%)

2024 2023 2024 2023

Board 7(64%) 8(67%) 4(36%) 4(33%)

Senior managers 15(60%) 12(57%) 10(40%) 9(43%)

All employees

(includingboard) 38(46%) 36(49%) 44(54%) 38(51%)

Strategic report Corporate governance Financial statements Other informationIntroduction

Number of

board members

Percentage of

the board

Number of

senior positions

on the board

(CEO,CFO,SID

andChair)

Number in

executive

management

Percentage of

executive

management

Men 7 63.6% 4 6 85.7%

Women 4 36.4% - 1 14.3%

Not specified/prefer not to say - - - - -

Number of

board members

Percentage of

the board

Number of

senior positions

on the board

(CEO,CFO,SID

andChair)

Number in

executive

management

Percentage of

executive

management

White British or other White (including

minority-whitegroups) 10 90.9% 4 7 100%

Mixed/MultipleEthnicGroups - - - - -

Asian/Asian British 1 9.1% - - -

Black/African/Caribbean/Black British - - - - -

Otherethnicgroup,includingArab - - - - -

Not specified/prefer not to say - - - - -

Working environment

AtCaledonia,welooktoestablishandmaintainhigh

standardsofbehaviourandconduct.Wehaveasetof

policies in place intended to protect employees from

unlawfuldiscriminationandprovidethemwithaworking

environmentwheretheyhavearighttobetreatedfairly,

withconsiderationandrespect,andwhichsupportshigh

standardsofconductandperformance.

Annualperformanceappraisals,throughwhich

employeesmaybesetobjectivesandagainstwhichtheir

achievementsareassessed,areintendedtoensurethat

employeeshaveaclearviewoftheirperformanceand

toidentifyadditionallearninganddevelopmentneeds

tohelpthemmeettheirfullpotential.

Grievance procedure and whistleblowing

Caledonia’s staff handbook outlines the company’s formal

grievanceproceduresandthestepscolleaguescantake

toraiseconcerns,eitherformallyorinformally.

Inaddition,thereareformalwhistleblowingarrangements

in place which enable staff to raise any issue of concern

regarding possible impropriety in the conduct of the

company’sbusiness,confidentiallyandindependently

oflinemanagement.Responsibilityforwhistleblowing

proceduresrestswiththeboard.

Health and safety

Welooktocontinuallyimprovehealthandsafety

withinourworkplace,operatinginaccordancewith

applicablelegislation.

Duetothenatureofourbusiness,ouremployeesare

engagedinlow-riskoccupationalactivities.However,

weseektoprovidesafeworkingconditionsand

equipment,deliveringadequatetrainingtosupportthis

andpreventaccidentsandcasesofwork-relatedillhealth.

Ourhealthandsafetypoliciesareprovidedwithinour

staffhandbook.Workstationassessmentsareundertaken

toidentifyemployeeneedsandactionedasrequired.

Thisyear,followingfeedbackfromstaffandinlinewith

therecognisedhealthbenefits,wetrialledstandingdesks

andplantoimplementthemlaterin2024.

DuringtheyearwehadnoRIDDORreported

incidents(‘ReportingofInjuries,Diseasesand

DangerousOccurrencesRegulations2013’)and

nowork-relatedaccidents.

InaccordancewithListingRule9.8.6(9)oftheFCA’sListingRules,thetablebelowsetsoutdetailsofthediversityofthe

individualsservingontheboardandexecutivemanagementasat31March2024.Ourexecutivemanagementconsists

ofmembersofourInvestmentCommittee,beingthemostseniorlevelofmanagement.Datawasobtainedona

voluntaryself-reportedbasis.TheboardmettheethnicitydiversitytargetsetoutinLR9.8.6(9)(a)butnotthetwo

genderdiversitytargets.Thetargetswereintroducedin2022and,giventhegradualchangeinboardmembership,

itwilltaketimetomeetthem.

Sustainability (continued)

46 Caledonia Investments plc Annual Report 2024

The Caledonia Investments

Charitable Foundation

Establishedin2020,theFoundationwasinitially

establishedtoprovidegrantstoeligibleapplicants

closelyconnectedtoourinvesteecompanies,who

facedfinancialhardshipduetotheCovid-19pandemic.

Today,throughtheFoundation,weareproudtosupport

causeswhichlinkcloselytoCaledonia’shistory,values,

cultureandteam.Thecompanymadeagrantof£300,000

totheFoundationduringtheyear.TheFoundation

providessupporttoanumberofcharitieseachyear

and seeks to create an enduring legacy by supporting

thedevelopmentofasmallnumberofthesethrough

amulti-yeardonationprogramme.Onesuchcharity

thathasbenefitedfromthissupportisHoratio’sGarden.

AlongsideHoratio’sGarden,theFoundationalsomade

materialdonationstotheCornwallCommunityFoundation,

MaritimeVolunteerService,TheWheelyboatTrustand

LMK(LetMeKnow).Smallergrantsbenefitedother

charitiesconnectedwithCaledoniaanditsemployees,

includingtheMountainAdventureTrust(partneredwith

theMountainTrainingTrust)andTheQuinnianTrust,

alongside donations to support charitable fundraising

activitiesbycolleaguessuchasmarathons,

funrunsandbikerides.

Wealsoprovidecolleagueswithuptotwoadditionaldays

ofleaveeachyeartoencouragethemtovolunteertheir

timetosupporttheFoundation’sactivities,togetherwith

othercharitiesandgoodcauses.

Horatio’s Garden nurtures the wellbeing of people after

spinalinjuryinbeautifulvibrantsanctuarieswithinthe

heartofNHSspinalinjurycentres.

Thecharity’svisionistosustainablygrowthriving

communitiesandbiodiversegardensinall11NHS

spinalinjurycentresintheUK.

Thegardensarevitalplacesforreflectionand

adjustmentforpeoplefacingtheselife-changinginjuries

andlongstaysinhospital.Theprofoundlypositive

impactofaHoratio’sgardenisclearforpatients,their

lovedonesandhospitalstaff.Researchshowsthat94%

ofbeneficiariesseeanimprovementintheirwellbeing

with91%reportingthatthegardenshavesupported

theirmentalhealth.

“Support from the Caledonia Investments

Charitable Foundation has been pivotal to

the growth of our corporate partnership

income enabling Horatio’s Garden to secure

crucial sustainable funding for the future

running costs of our regional projects in the

UK’s spinal injury centres. We are extremely

proud and grateful to be working with the

Caledonia Foundation team.”

Dr Olivia Chapple

ChairofTrustees,Horatio’sGarden

Strategic report Corporate governance Financial statements Other informationIntroduction

Our investments

Webelievethatresponsibleinvestmentandbusiness

successgohandinhand.Wearecommittedtobuilding

businesses for the long term and consider the ESG impact

oftheinvestmentsthatweown.

Wearecommittedtoconstructive,long-termfocused

engagementwiththecompaniesinwhichweinvestand

believethatcarefulstewardshipiskeytoaddressingESG

risksanddrivingpositivechange.

We expect to invest in businesses which will:

Grow,provideemploymentandgenerate

economicbenefitinanenvironmentallyand

sociallyresponsibleway,bothduringandafterour

ownership.

We aim to invest in companies and funds that:

Take a responsible approach towards the

environmentandsociety,builtongood

governancepractices.

Inthepast,ourstewardshipactivitiesfocusedprimarilyon

governancematters,mostnotablyinourmajorityowned

investeebusinesses,whichweseektooperateinlinewith

industrygoodpractice.Today,wecontinuetobuildon

these foundations by incorporating ESG matters into our

investmentdecision-makingtoensurethatabroader

spectrum of issues that are important to us are formally

evaluatedalongsideourkeyinvestmentcriteria.Our

investmentteamconsidertheseissuesinitsduediligence

processwhenproposingnewadditionstoourportfolio.

Responsible Investment/Responsible

Corporate Working Group

ChairedbytheChiefExecutiveOfficer(‘CEO’),our

ResponsibleInvestment/ResponsibleCorporateWorking

Group(‘RI/RCWorkingGroup’)advisesandassistsinthe

developmentandimplementationofourapproachtoESG

mattersacrossthebusiness.Thegrouphasmetregularly

throughouttheyear.Areviewofourprogressforeach

investmentpoolandourbusinessoperationsisprovided

onpages49-54.

Members

CEO(Chair)

ChiefFinancialOfficer

Company Secretary

Seniormembersof–

Public Companies

PrivateCapital

Funds

Otherkeycorporate

managers

Function

Advisesandassistsin

the continued

developmentand

implementation of

our approach to ESG

matters across the

business

Seeks to ensure

that ESG matters

are appropriately

factored into

decision-making

processes

Continues to

develop

understanding of

climate-related

matters

Supports the

developmentof

ourreporting,

particularly on

climate-related

matters

Sustainability (continued)

Responsible investment

48 Caledonia Investments plc Annual Report 2024

Public Companies

Weaimtoinvestinglobalbusinesseswithrecognised

brands,intellectualpropertyandstrongmarket

positionsthathaveagoodtrackrecordofdelivering

attractivereturns.

Ourapproachmeansthatwedonotgenerallyinvestin

capitalintensivebusinessesorcompaniesdirectlyinvolved

intheextractionandproductionofcoal,oilornaturalgas.

Asaconsequenceofourhighlyselectiveandquality

orientatedinvestmentstyle:

•wemakeconsidereduseofourvotingrightsandvote

all our stock ahead of shareholder meetings

•weexpecttovoteinlinewithmanagement

recommendationsbutarepreparedtoabstainorvote

against resolutions where we consider they are not in

the interests of our own shareholders

• we will use our influence through engagement and

votingtoencouragecompaniestoplananddemonstrate

theactionstheyhavetakentoaddressclimaterisksand

opportunities.

Progress during the year

•ESGfactorsincorporatedintoinvestmentprocess,

together with ongoing monitoring

•PrinciplesofResponsibleInvestment(‘PRI’)

AdvancedRIanalysistrainingcompletedwithin

the team

•majorclimatetransitionandphysicalrisks

monitoredaspartofTCFDreporting.

Further information on Public Companies –

climate change metrics and targets

Turn to page 54

Strategic report Corporate governance Financial statements Other informationIntroduction

Sustainability (continued)

Private Capital

Weinvestinestablishedbusinesses,acrossarangeof

sectors,whichhaverobustoperatingmargins,strong

managementteamsandgoodgrowthopportunities:

•weintroduceahighstandardofcorporategovernance

intothesebusinesses,generallywithanindependent,

experiencednon-executivechairandformalauditand

remuneration committees to support the board

•ourteamtakenon-executiverolesinthesebusinesses

and use their positions to maintain close relationships

with the management teams

• we hold frequent meetings with management which

coverawiderangeofsubjects,includingESGmatters,

andregularlyreviewperformance

• we seek to ensure that these companies understand

andmanagetheirownenvironmentalimpacts

•weseektoencouragethemtoinvestinsuitable

technologytoimproveenergyefficiencyandmake

a successful transition to renewable energy and a

lowcarbonfuture.

Progress during the year

• ESG factors incorporated into processes and

shareholder documentation

•responsibleinvestmenttrainingdeliveredby

the British Venture Capital Association completed

• online platform implemented to track agreed

Sustainability Accounting Standards Board

(‘SASB’),KeyPerformanceIndicators(‘KPIs’)

and ESG policies

•SASBKPIs/policiesinplaceforthemajorityofour

core holdings

• good progress has been made with most portfolio

companiesgatheringandreportingScope1and2

datawithdefinedparameters.Wewillcontinueto

reviewandassessthequalityofthedatareceived

toenhanceourexternalreportinginthefuture.

Funds

TheFundsteaminvestinprivateequityfundsmanagedby

leadingmanagersinNorthAmericaandAsia:

•weexpectmanagerstoconsiderallfactors,including

ESGmatters,whenseekingtomaximisereturnswhilst

taking account of the associated risks

• we will encourage our fund managers to consider the

risks and opportunities presented by climate change in

theirinvestmentselectionprocessandinthefutureto

exploreinitiativestoreduceemissionsfromthe

businesseswithintheirfunds.

Progress during the year

• integrating consideration of ESG matters into

allstagesoftheinvestmentprocess–diligence,

portfolio monitoring and General Partner

(‘GP’)engagement

•becameasignatorytotheESGDataConvergence

Initiative(‘EDCI’),establishedtoaddressthe

fragmented nature of ESG frameworks and

regulation that aim to standardise and promote

ESGreportingandbenchmarkinginprivate

equity portfolios

• third-party ESG team training completed alongside

the ESG Fundamentals and Best Practice

InstitutionalLimitedPartnersAssociationcourses

•inauguralESGsurveyissued,with100%response

rate,providingtheFundsteamwithinsightand

analysis into the maturity of our GP ESG policies

•wehavebeguntheprocessofobtaining

suitable proxy emissions data for our Funds

 poolinvestments.

50 Caledonia Investments plc Annual Report 2024

Working with our portfolio -

Cooke Optics

Cooke,aleadingmanufacturerofcinematography

lenses,hasmadesignificantprogressindeveloping

its approach to sustainability since Caledonia’s

investmentin2018.

Workingwiththemanagementteam,wehave

supportedinitiativestoinvestinthefutureofthe

business,includingthelargescaleimplementation

of solar panels at Cooke’sLeicestershirefactory,

toreduceitspurchasedenergyrequirements.

All electricity for the business is now sourced

fromrenewablesources.

Solar panel transition rationale

•keyprioritiesforCookeweretoreduceitsoverall

energyconsumption,movetorenewableenergy

tariffs and mitigate future energy pricing risks

•sinceinvestmentapproval,procurementand

implementationin2023,Cookehasreporteda

significant reduction in energy usage from the grid

• newly installed solar panels are expected to

generateapproximately220,000kWhofelectricity

eachyear,circa20%ofCooke’stotalenergy

requirement,whichovertimewillsignificantly

reduce its carbon footprint

•returnoninvestmentwillbeprincipally

dependentonvariabilityofunitrates,although

a payback period of between three and four years

isanticipated.

Strategic report Corporate governance Financial statements Other informationIntroduction

The climate challenge and transition to net zero

We are committed to supporting a sustainable future to

deliverinvestmentperformanceforourshareholders

overthelongterm.

Ourbiggestenvironmentalimpactisthroughthe

companiesandfundsweinvestin.

We recognise the challenges of climate change and the

likelymaterialriskthisposesfortheinvestmentswemake,

potentiallyfromregulation,adjustmentsinconsumer

preferences or pressure to reduce carbon emissions

andaddressbroaderenvironmentalconcerns.

Wehavesetanexpectationthatthebusinessesinwhich

weinvestshouldtargetnetzeroemissions(Scope1and

Scope2,market-based)by2050.Thepaceofplanningand

deliveryofthiscommitmentwillvaryacrossthebusinesses

inourinvestmentportfolio,althoughweanticipatethat

manywillachievethistargetmoreswiftly.

Wewillcontinuetokeepthiscommitmentunderreview.

Weareactivelyengagingwithunderlyingportfolio

companies and fund managers to assess the quality

andavailabilityoftheircarbonemissionsdataand,where

possible,wehaveimplementedsuitablemonitoring

andreportingtoenableustotrackprogress.

Sustainability (continued)

Environment

Our business

All our employees operate from a single office located in

centralLondon.Ourbusinessoperationsthereforehave

a modest carbon footprint compared to the impact of our

investmentportfolio.

We remain committed to minimising our direct impact

ontheenvironmentandmitigatingtherisksposedby

climatechange.

WehavesetatargettoachievenetzeroScope1and

Scope2emissions(market-based)by2030throughthe

followinginitiatives:

•thereductionandeventualeliminationofgasused

for heating

•furtherenergyefficiencyinareassuchaslighting,

cooling and IT equipment

• continuing to ensure that all electricity is procured

fromrenewablesources.

During2021,weswitchedtosourcingallourelectricity

fromarenewableenergysupplier,whichresultedin

a significant reduction in our market-based Scope 2

carbonemissions.Almostallourwasteisrecycledand

allwastewaterisreturnedtothesewer.Theresulting

carbon emissions from water consumption and waste

generation are captured within ‘other’ Scope 3 emissions

inthetableonpage53andaredeemedtobeimmaterial

emissionsources.

Electricityusagesince2020hasincreased,primarilydueto

employeesreturningtotheofficefollowingtheCovid-19

pandemicand,toalesserextent,ourdecisiontooperate

24 hour security at our business premises for the

continued safety of colleagues and to protect against

crime.In2023,anexternalproviderwasengagedto

conductanEnergySavingsOpportunityScheme(‘ESOS’)

assessmentauditoftheenergyusedinourofficebuilding,

whichmayhelpustoidentifyfurthercost-effective

energy-savingmeasures.

Lookingforward,weexpectourtransitionplanningto

primarily focus on finding technological solutions to

replace our gas boilers with low carbon-emitting

technologieswhenfeasible.

Travel

MostcolleaguescommutetotheofficeincentralLondon

onpublictransport.Acycletoworkschemeisavailable

toemployeesandweprovideasecurefacilityforbike

storage,alongsidechangingandshowerfacilities.

All of our meeting rooms are equipped with modern

audiovisualandteleconferencingfacilitiesforour

employeestoaccess,reducingtravelwhereappropriate.

OurScope3emissionsprincipallyarisefrombusiness-

relatedinternationaltravel.Whilstweareabletohold

manymeetingsvirtually,face-to-facemeetingsremain

animportantaspectofourongoinggovernanceand

stewardshipactivities.Webelievethatourbusiness

benefitsfromtherelationshipthiscontactbuilds.We

aimtomanagetravelinaninformedway.Wewillmonitor

theseemissionsandlookforopportunities,where

appropriate,toreduceourimpact;however,weare

reliantupontechnologicaladvancementstoachieve

netzeroemissionsfromaviation.Aswegainexperience

and knowledge around our

greenhouse gas (‘

GHG

’

)

emissions,wewillcontinuetolooktoenhanceourcarbon

emissions disclosures to include more of our Scope 3

indirectemissions.

52 Caledonia Investments plc Annual Report 2024

Climate change metrics and targets including greenhouse gas emissions

The data in the following tables has been prepared in accordance with the regulations with the Companies (Directors’

Report)andLimitedLiabilityPartnerships(EnergyandCarbonreport)andLimitedLiabilityPartnerships(Energyand

CarbonReport)Regulations2018,whichimplementedtheGovernment’spolicyonStreamlinedEnergyandCarbon

Reporting(‘SECR’).

Emissions data TonnesCO

Scope SourceofGHGemissions–yearto31March 2020 2021 2022 2023 2024

Scope 1

(directemissions)

Combustionoffuel&facilitiesoperation,

includingcompanycaruse(soldinApril2022)

24 19 21 16 14

Scope 2

(indirectemissions)

Electricity(location-based) 57 47 45 52 59

Electricity(market-based) 57 47 - - -

Scopes 1 and 2 - location-based 81 66 66 68 73

Scopes 1 and 2 - market-based 81 66 21 16 14

Scope 3

(indirectemissions)

Businesstravel 371 7 94 243 375

Other - - - 1 1

Total – location-based 452 73 160 312 449

Total – market-based 452 73 115 260 390

KPI – location-based

Totalemissionsperaveragenumberof

employees 8 1 3 5 6

KPI – market-based

Totalemissionsperaveragenumberof

employees 8 1 2 4 6

Per average number of employees 60 61 61 62 71

Notes:

1. TheseemissionshavebeencalculatedinaccordancewiththeGHGProtocolCorporateAccountingandReportingStandardguidelinesusingUKGovernment

GHGConversionFactorsforCompanyReporting.

2. Caledoniaconsumesallitswaterfromthemainswhichweunderstandissourcedfromoutsidehighstressareas,withallitswastewatercurrentlybeing

returnedtothesewer.TheresultantCO

emissionsfromitsuseofwaterare<1tonne.

3. Caledoniahasamixofrecycledandgeneralwaste;therelatedScope3GHGemissiondataisincludedunder‘Other’inthetableabove.

4. Location-basedmethodreflectstheaverageemissionsintensityofgridsonwhichenergyconsumptionoccurs(usingmostlygrid-averageemissionfactordata).

Themarket-basedmethodreflectsemissionsfrom100%renewablesourcedelectricitythatwehavechosentopurchase.

5. 100%ofourreportedemissionsareintheUK,involvingbusinesstravelprimarilydepartingfromorarrivingintheUK.Accordingly,thistabledoesnotinclude

acolumnindicatingtheyearlyUKproportionofglobalemissions.

6. ThesourcesofGHGemissionsshowninthetableabovearefromthecompaniesincludedintheconsolidatedfinancialstatements.UndertheSECRregime

wearenotrequiredtoreportanyemissionsfromcompaniesthatarenotincludedinourconsolidatedfinancialstatements.

7. Caledoniadoesnotreleaseanyhazardousairpollutants.Caledoniaonlyhasmaterialhazardouswasteintheformofbatteriesandprinttoner,bothofwhich

areresponsiblyrecycled.

Othermetrics Unit 2020 2021 2022 2023 2024

Electricity usage KWh(k) 224 199 214 270 286

Gas usage KWh(k) 100 93 91 76 67

Water consumption m

Datanotavailablebutwillbe

tracked going forward

798 1,166

General mixed waste tonnes - -

Mixedrecycling tonnes - -

WEEE waste tonnes - -

Confidential waste tonnes 2 2

Waste generation tonnes 2 2

Waste recycled % 99% 99%

Strategic report Corporate governance Financial statements Other informationIntroduction

Our investment portfolio

Sustainability (continued)

Public Companies – climate change metrics

and targets

Key to monitoring progress to minimise climate change

transition risk across the portfolio is ensuring all businesses

developandsuccessfullyimplementplanstoachievenet

zero(Scope1andScope2)emissionsby2050orearlier.

TheMSCIWorldIndexisusedasabenchmarkforTCFD

reporting purposes as this has a similar sector exposure

tothatofthecompaniesinthePublicCompaniespool.

Asillustratedinthetablebelow,wehaveoutlinedprimary

metricsusedtodeterminetheScope1andScope2GHG

emissionsgeneratedbyourPublicCompaniespool,

whichformpartoftheoverallemissionslinkedtoour

investmentportfolio.

The Public Companies pool has a significantly lower total

carbonfootprintandweightedaveragecarbonintensity

(‘WACI’)comparedwiththebenchmark.Thisisprimarily

duetoourcarefulselectionprocessofproven,well-

managedandsustainablebusinesses.Thecompanies

inthepooltendtohavealowercarbonintensitythan

thebenchmark(eveninmostofthehighcarbon-emitting

sectorssuchasmaterials,utilitiesandindustrials).

ThedataheldwithintheMSCIOneplatformlagsbehind

ourreportingdate.2024primarilyreflectsdatareported

byinvesteecompaniesfrom1June2022to31May2023.

The2023comparativeprimarilyreflectsdatafrom1June

2021to31May2022.

OurPublicCompanyinvestmentshaveseena19%

increaseintotalcarbonemissionsoverthelastyear.This

isduetothe2023comparativeprimarilyrelatingto2021,

whichwasheavilyimpactedbytheCovid-19pandemic.

The2024dataprimarilyreflectsthatof2022,where

theimpactoftheCovid-19pandemiconemissions

waslesssignificant.

The following table shows other key climate metrics

usedtomonitorhowthecompaniesinwhichweinvest

haveadecarbonisationplanandaremanagingclimate

riskexposure.

Othermetrics

Portfolio

(2024)

Portfolio

(2023)

Companies targeting net zero for

Scopes1and2by2050 93% 93%

Companies with top quartile carbon

management score 68% 71%

Greenrevenueexposure 6% 6%

ThemajorityofthecompaniesinourPublicCompanies

poolhaveplanstoachievenetzeroemissionsby2050

orsooner,givinguscomfortthattheyarealignedtoour

goal.Thecompaniesthathaveyettoestablishnetzero

targetscontributecirca8%ofthepool’stotalcarbon

emissionsand,basedonourknowledgeandengagement

of the companies and their commitment to good

corporategovernance,webelievetheywillestablish

appropriatetargets.

Itisalsoworthnotingthat68%ofthecompaniesin

ourPublicCompaniespoolhaveatopquartilecarbon

managementscore,indicatingthattheyhavethe

capability and resources to manage their climate risks

andopportunities.Thisgivesusfurthercomfortthatthe

companiesweinvestinwillachievetheirnetzerotarget

by2050.Wewillcontinuetomonitorprogresson

thesemetrics.

Latestannualreporteddata

Scope

Portfolio

(2024)

Benchmark

(2024)

Variancevs

benchmark

Portfolio

(2023) Units

Total carbon emissions 1and2 19,345 48,894 -60% 16,315

TonnesCO

Carbon footprint 1and2 16 39 -58% 15

TonnesCO

e/$minvested

WACI 1and2 60 95 -37% -50% TonnesCO

e/$msales

1.CarbonemissiondataforourpublicequityinvestmentswasobtainedfromtheMSCIOneplatform.MSCIcollectsthedatafrompubliclyavailablesources,

includingannualreports,theCarbonDisclosureProject(‘CDP’)andgovernmentdatabases.AllcarbonemissiondatacollectedisclassifiedpertheGHG

Protocolmethodologytoenableaggregationandcomparabilityacrossinvesteecompaniesandsectors.Wehavenotsoughttoverifythisdataandassume

noresponsibilityforitsaccuracyorcompleteness.

2.DuetoadevelopmenttotheMSCIOneplatformwehaveupdatedourmetricsfromusingMarketCapitalisationtoEnterprisevalueincluding 

cash(‘EVIC’)asthedenominator.Wehaverestatedthe2023comparativetoanEVICcalculation.

54 Caledonia Investments plc Annual Report 2024

We continue to recognise the importance of clearly

communicating both financial and non-financial ESG

performancetoourstakeholders.

Thisisthesecondyearwehaveproducedadetailed

TCFDreport,acopyofwhichcanbefoundat

www.caledonia.com.Thisprovidesareviewofhowwe

areprogressingtomeettherecommendationsoftheTCFD.

Wehavepreparedthisreportaswerecognisethatthe

levelofdetailneededtocomplywithTCFDmaynotbe

requiredbyallstakeholders.Thefollowingtable,which

shouldbereadinconjunctionwithourTCFDreport,

summarises our response to each of the TCFD

recommendations,andexplainshowweincorporate

climate-related risks and opportunities into each of the

fourTCFDpillarsofgovernance,strategy,riskmanagement,

andmetricsandtargets.

AsrequiredbyListingRule9.8.6R(8),weconsiderthese

climate-related disclosures to be consistent with the TCFD

recommendationsandrecommendeddisclosures,other

than the completion of scenario analysis (strategy pillar

disclosure(c))andthedevelopmentofmetricsandtargets

forallofourinvestmentassets(metricsandtargetspillar

disclosures(a),(b)and(c)).Wehavefullyaddressed the

assetswithinourPublicCompaniespool.Wehavealso

addressedthestrategypillardisclosure(c)forourPrivate

Capitalpool.Duetolimitationsinobtainingqualitydata,

weanticipatethatinformationwillbeavailabletoenableus

tofullyaddresstheconstituentsofthePrivateCapitalpool

inthecomingyearsandtheFundspoolseveralyearslater.

Task Force on Climate-Related Financial Disclosures

Governance

Disclose the

organisation’s

governancearound

climate-related risks

andopportunities.

Read more in our TCFD

report.

TheboardiscollectivelyresponsibleforCaledonia’ssuccess.Itsetsthecompany’sstrategy,ensuresthatthenecessary

financialandhumanresourcesareinplacetoenablethecompanytomeetitsobjectives,andreviewsmanagement

performance.Wearecontinuingtoembedanassessmentofclimate-relatedrisksandopportunitiesintoourstrategic

approach.Theboardisultimatelyaccountablefortheoversightofclimate-relatedrisksandopportunitiesthatcouldimpact

ourbusiness.

Caledoniahasawell-definedgovernanceframework,appropriateforarelativelysmallbusiness,basedondelegated

authority.Theboardhasadoptedaformalschedulethatsetsoutthosematterswhichitspecificallyreservesforitsown

decisionandthosewhicharedelegatedtoboardcommitteesandexecutivemanagement.TheChiefExecutiveOfficer

(‘CEO’)isresponsibleforthedevelopmentandimplementationofthestrategyforthebusiness.Theboardreceivesbriefings

onsustainabilitymatters,includingclimate-relatedissues,throughawell-definedreportingframework.

OurResponsibleInvestment/ResponsibleCorporate(‘RI/RC’)WorkingGroup,chairedbytheCEO,advisesandassistsinthe

developmentandimplementationofCaledonia’sapproachtosustainabilitymatters,includingthosewhichareclimate-

relatedissues.TheboardisupdatedperiodicallyonprogressoftheRI/RCWorkingGroupandin2024receivedspecific

sustainabilityupdatesfromeachofCaledonia’sthreeinvestmentpools,whichincludedclimate-relatedmattersand,where

relevant,progressagainstclimatetargets.

Theannualbonusawardforourexecutivedirectorsisdeterminedbyacombinationofcorporatefinancialperformanceand

personalobjectives.Theboard’sRemunerationCommitteereviewsthesemeasuresandobjectives,whichincludesRI/RC

elements,annually.

Task Force on Climate-Related Financial

Disclosures (‘TCFD’)

Our second standalone TCFD

report sets out our progress

towards meeting all TCFD

recommendations and can be

found at www.caledonia.com

Strategic report Corporate governance Financial statements Other informationIntroduction

Sustainability (continued)

Strategy

Disclose the actual and potential

impacts of climate-related

risks and opportunities on

theorganisation’sbusinesses,

strategy and financial planning

where such information

ismaterial.

ReadmoreinourTCFDreport.

Asalong-termassetowner,werecogniseourresponsibilitytosupportthetransitiontoalowercarboneconomy.

Thisiswhywehavesetanexpectationthatthebusinessesinwhichweinvestshouldtargetnetzeroemissions

by2050(Scope1andScope2,market-based).Wearedevelopingourcapabilitytoidentifyandassessactualand

potentialimpactsofclimate-relatedrisksandopportunitiesonourinvestmentportfolio.Thiswillallowustoadapt

ourbusinessmodel,strategyandfinancialplanningwhereimpactsareconsideredtobematerial.

Ourbusinessisimpactedbyabroadrangeofrisksandopportunities.Thisreflectsthediversenatureofour

investmentportfolio,althoughitshouldbenotedthatouranalysisshowsthathighcarbon-emittingindustries

(oilandgas,forexample)andcertaingeographicregions,whereCaledoniahasverylowexposure,aremore

likelytoexperienceanelevatedleveloftransitionrisk.Wehaveconsideredbothphysicalandtransitionrisksover

threetimehorizons.Weanticipatethatthebusinessesandfundsinwhichweinvestwilldevelopplanstoaddress

climate-relatedrisksandopportunitieswhichimpactthem.Weexpecttousethisinformation,asitbecomes

available,toenhanceourunderstandingandriskassessmentactivity.

Theavailabilityofrobustdataandqualityinformationisaprerequisitetoeffectiveanalysis.Wehaveusedthe

mostrecentdataandinformationfortheconstituentbusinessesinthePublicCompaniespoolusingMSCI’sOne

platform.Thisdatahasbeenusedtosupportascenarioanalysisexercise,whichhasprovidedvaluableinsights

toconfirmtheresilienceofthepooltobothphysicalandtransitionrisks,undervariousclimatescenarios.

Thisyear,wehaveexpandedouranalysistoincludethePrivateCapitalpool.Withthehelpofanexternal

consultant,wehaveidentifiedkeyclimatechangerisksandopportunitiesfacingportfoliocompaniesand

performedqualitativescenarioanalysistoassesspotentialrisksandopportunities.

WeanticipatethatsimilarinformationwillbedevelopedfortheconstituentsoftheFundspoolinthecomingyears,

tobroadenourscenarioanalysistocoveragreaterproportionofourinvestmentportfolio.

Ourbusinessoperationshaveamodestcarbonfootprintwhencomparedwiththeimpactofourinvestment

portfolio,withallouremployeesoperatingfromasinglelocationincentralLondon.However,wearecommitted

tominimisingourdirectimpactontheenvironmentandmitigatingtherisksposedbyclimatechange.Wehave

thereforesetatargettoachievenetzeroScope1andScope2emissions(market-based)by2030.Wehave

alreadytakenactionstoreduceourenergyusageandsince2021ourelectricitysupplyissourcedfrom100%

renewablesources.

Risk

management

Disclose how the organisation

identifies,assesses,andmanages

climate-relatedrisks.

ReadmoreinourTCFDreport.

Thecorporateapproachtoriskmanagementiscoveredonpages57to59ofthisreport.

Tomeetthechallengespresentedbyclimatechange,theglobaleconomywillneedtotransitiontoanetzero

alternative,therepercussionsofwhichwillraiseopportunitiesandrisksforinvestmentswithinourportfolioand

forourbusinessoperations.Climatechangeriskmanagementisbeingembeddedintoourexistingprocesses.

Theboardsetsstrategyandhascollectiveresponsibilityforthemanagement,directionandperformanceofthe

business.Climate-relatedrisksarebeingincorporatedintoourstrategyand,indischargingitsresponsibilities,

theboardisultimatelyaccountablefortheoversightofclimate-relatedrisksthatcouldimpactthebusiness.

Inrecognitionoftheimportanceofclimate-relatedriskstoourbusiness,‘ESGandclimatechange’hasbeen

identifiedasoneofourprincipalrisks.Thismeansthatactionstomanageandmitigatethisrisk,togetherwithkey

developments,arereviewedbytheAuditandRiskCommitteeatleastbiannuallywithmaterialchangeselevated

totheboardforconsideration.Thislevelofreviewseekstoensurefullvisibilityatboardlevelofanyemerging

climate-relatedriskissues.

Climate-relatedrisksareassessedandmanagedinaccordancewithourcorporateriskframeworkandprocess.

Eachareaofthebusinessisresponsibleforidentifying,monitoringandreportingonrelevantrisksandcontrols,

withappropriateoversightfromtherelevantcorporatedepartments.Werecognisethatclimatechangeisa

pervasiveriskacrossmanyofourprincipalriskcategories.Acrossthebusiness,seniormanagersareresponsible

foridentifyingtheseclimate-relatedrisksandassessingtheimpactseithertotheirareaofinvestmentportfolio

ortotheirfunctionalspecialism,dependingontheirrole.

Weanalysepotentialclimate-relatedrisksthroughthelensofbothphysicalandtransitionrisksovertheshort,

mediumandlongterm,andusingbothinternalandexternalanalysis.Manyofourkeyprocessesarebeing,orhave

been,adaptedtoincorporateclimate-relatedriskassessments,includingourapproachtoinvestmentresearch

anddecision-making,activeownershipandengagementwithourinvesteecompaniesandfunds,andongoing

assessmentandmonitoringofourownbusinessoperations.

Metrics and targets

Disclose the metrics and targets

used to assess and manage

relevantclimate-relatedrisks

and opportunities where such

informationismaterial.

ReadmoreinourTCFDreport.

Toholdourselvesaccountableagainstourstrategy,wearecontinuingtoimproveouranalysisanddisclosemore

metricsandtargetswhereweconsiderthesetobematerial.Aspartofthisprocess,wewillinvestigateoptionsfor

newdatasourcestoaidusinshowinganincreasinglyholisticviewofthecarbonemissionsofourinvestmentsand

ourownoperations.

Informationonspecificmetricsandtargetsareprovidedonpages52to54.InlinewithSECRrequirements,

wehavealsolistedourGHGdataonthesamepages.

56 Caledonia Investments plc Annual Report 2024

Risk management

Effective risk management is an

integral part of the company’s

business model and assists in

ensuring that the different parts of

the group operate within strategic

risk parameters.

The board has overall responsibility

for setting and monitoring the

company’s risk appetite.

Board of directors

Overseesriskidentificationandmanagement,carryingoutrobust

assessmentsofthecompany’sprincipalandemergingrisks.Reviews

andsetsoverallriskappetite.

Audit and Risk Committee

Assessesandmonitorstheriskmanagementapproach.Specifically

reviewsourcontrolsandassuranceprogramme,whichidentifieskey

mitigatingcontrols,teststheiroperationandreportsoncompliance

andeffectiveness.

Investment Committee

Considersrisksassociatedwithinvestments.

Valuation Committee

ConsidersrisksassociatedwiththevaluationofCaledonia’sunquoted

investments.

Responsible Investment / Responsible

Corporate Working Group

Considersrisksassociatedsustainabilitymatters,includingclimate-

relatedissues.

Operational Risk Committee

Identifiesandmanagesoperationalrisksandotherinternalcontrols

andriskmanagementsystems.

Investment executives

Risksareconsideredbyallexecutivesaspartoftheirwork,including

theoriginationofinvestmentsandongoingmonitoring,portfolio

managementandtransactionalactivity.

Investee management

Investeemanagementisresponsibleforidentifyingandmanagingkey

risks.Thesearemonitoredbytheinvestmentteams.

Risk

identification

& management

Governance

– oversight &

challenge

Finance

Risksareidentified,managedandmitigatedthatcouldimpact

reporting,treasuryoperations,taxmanagement,planningandthe

integrityoffinancesystems.

Information technology

Risks,togetherwithinternalandexternalthreatsthatcouldimpact

the integrity and security of our systems and IT infrastructure are

assessedandmanagedtoindustrystandards.Defencesareinplace

againstexternalthreats.

Risks that could impact employee wellbeing or our ability to recruit

andretainarecloselymonitored.

Risk

management

process

Control Assurance

Programme

Risk analysis &

reporting

Strategic report Corporate governance Financial statements Other informationIntroduction

Risk governance and structure

Riskmanagementanditsgovernanceistheresponsibility

oftheboard,withtheexecutivegiventhetaskofmanaging

aneffectiveandtransparentprocesstoensureemerging

andprincipalrisksareidentified,documented,assessed,

managedand,whereappropriate,mitigated.Theboard

sets the risk appetite in line with the business model and

strategy.Thisiscommunicatedthroughtheexecutivetoall

thosewithmanagerialresponsibilities.Risksarepresentinall

partsofthebusinessandareconsideredbyallexecutivesas

partoftheirwork,includingtheoriginationofinvestments

andongoingmonitoring,portfoliomanagement,

transactionalactivityandbusinessoperations.

The Audit and Risk Committee assesses and monitors the

riskmanagementapproachandspecificallyreviewsour

controlsassuranceprogramme.Thisprogrammeidentifies

keymitigatingcontrols,teststheiroperationandreports

oncomplianceandeffectiveness.This,togetherwiththe

auditfindingsreportreceivedfromtheexternalauditor

andgoodpracticeguidancefromotheradvisers,provides

input to the board as a whole on the status of the risk

managementprogramme.Governancewasstrengthened

thisyearwiththeformationoftheOperationalRisk

Committee.Inadditiontoreviewingprincipalrisks,italso

assesses and challenges more granular assessments from

thecorporatedepartments,ensuringthatallmaterial

exposureshavebeencaptured.

Principal risks

The board has undertaken a robust assessment of the

principalrisksfacingCaledonia,includingthosethatwould

threatenitsbusinessmodel,futureperformance,solvency

orliquidity.Principalrisksaredefinedasthosethathave

thepotentialtomateriallyimpactthedeliveryofour

strategicobjectivesanddamageourreputation.We

periodicallyreviewadditionsordeletionsfromourlistof

principalrisks,reflectingnewandemergingrisksarising

fromchangesintheexternalenvironmentorfromwithin

ourownbusinessactivity.

Duringthefinancialyear,theAuditandRiskCommittee

considered our list of principal risks and associated risk

appetite.Itwasconcludedthatthisremainedappropriate,

andnosignificantnewemergingriskswereidentified.

Overall,therefore,theriskprofileremainedstaticforthe

year,withnomaterialissuesraised.

The risk associated with successful integration of ESG and

climatechangemattersintoourinvestmentactivitydrove

furthermanagementactivity.Thisinvolvedincreasingthe

scope of analysis and engaging an expert third party to

considerparticularriskandopportunities.Widereconomic

pressures from increased inflation and higher interest rates

continued to be monitored and managed through the

year,butnotingamorepositiveoutlooktowardstheend

oftheyear.Fromanoperationalriskperspective,planned

remediationactivitywasprogressed,strengtheningthe

effectivenessofourcontrolframework.

Wehaveidentifiedsevenprincipalrisks,describedinmore

detailonpages60and61,whichcanbeconsideredinthe

followingthreegroups.

Strategic risks

Theprincipalriskscoveringourstrategicapproachand

investmentdecision-makingarefundamentaltothe

executionofourbusinessmodel.Therisksand

opportunities associated with ESG matters and climate

change continue to be important to the successful

implementationofourstrategy.

Risk management (continued)

58 Caledonia Investments plc Annual Report 2024

External risks

Theprincipalrisksassociatedwiththemarket,liquidity,

and regulatory and legal matters capture the key

externalriskswhichimpactourbusiness.

Operational risks

Ouroperationalrisks,whichincludebusinesscontinuity,

attractingandretainingtalent,cybersecurityandfraud

risk,formthefinalgroup.

Wehaveassessedthechangeinriskstatusforeach

ofourprincipalrisksoverthelastyearandconcluded

thatthelevelofriskislargelyunchanged.Asnoted

above,wehaveobservedadecreaseinmarketrisk

andacorrespondingreducedlevelofvolatilityinpublic

equitymarketsduring2023andinto2024.However,

whilstthelevelofmarketriskwasreducedlastyear,

there are still notable ongoing challenges from

geopoliticalissues,inflationandinterestrates,

keepingtheassessmentstatic.

Caledonia risk management activities

Weoperateanumberofinterrelatedactivities,

illustratedhere,todeliveranintegratedapproachtorisk

management,whichisoverseenbytheboard,theAudit

andRiskCommittee,theexecutiveandtheInvestment

Committee.Wemanagebusinessriskthroughasetof

integratedprocessestoprovideriskvisibility.

Risk management reporting

Wemanageandreportriskviainvestmentand

operationalriskdashboards.Bothdashboardsare

considered by the Audit and Risk Committee at least

biannually,withanymajorissuesorchangesarising

fromthesereviewsescalatedtotheboardfor

furtherdiscussion.

Theinvestmentriskdashboardfocusesoninvestment

portfoliorisksarisingfromourinvestmentstrategy.Itis

supportedbyadetailedportfolioanalysisreport,which

considersriskssuchasassetallocationandperformance,

investmentvolatility,valueatrisk,diversification,

liquidityandconcentration.

The operational risk dashboard considers risks

associated with our business operations and includes

businesscontinuity,ITandcybersecurity,regulatory,

legalandfinancialcontrols.

Strategic review

• Boardreviewofinvestment

poolstrategiesandapproval

ofoverallassetallocation

• approvalofstrategic

objectives.

Investment decisions

• InvestmentCommittee

implementsinvestment

strategyandapproves

individualinvestments

• Boardapprovalrequiredfor

investmentsabovecertain

parameters.

Sustainability

• ESG approach implemented

through the Responsible

Investment/Responsible

Corporate Working Group

• long-term assessment of

sustainability will be one key

criteriaininvestment

decision-makingprocess.

External influences

• regularmonitoringofmarket,

economic and geopolitical

developments

• analysis of key external trends

that underpin performance of

investeebusinessesandfunds.

Ongoing risk monitoring

• biannualinvestmentpool

reviews

• regular updates to the board

and Audit and Risk Committee

• rigorousvaluationprocess

forprivateassets.

Risk mitigation framework

and analysis

• biannual risk dashboards

reviewbytheAuditand

Risk Committee

• assessmentofprincipal,

new and emerging risks

• assessment of risk appetite

• testingofviabilityandgoing

concernscenarios.

Our strategic objectives

Turn to page 21

Strategic report Corporate governance Financial statements Other informationIntroduction

Risk management (continued)

Principal risks Mitigation and management Key developments

Current risk status

and movement

in year to

March 2024

Strategic

Risks in relation to the

appropriateness of the business

modeltodeliverlong-termgrowth

incapitalandincome.

Strategic risks include the

allocation of capital between

publicandprivateequity,and

inrelationtogeography,sector,

currency,yieldandliquidity.

The company’s business model and strategy

arereviewedperiodically,againstmarket

conditionsandtargetreturns.

The performance of the company and its key

risks are monitored regularly by management

andtheboard.

All pools operated within the defined

banding.Aspartofthefinancialplanning

cycle,enhancedstresstestingwascompleted

to ensure resilience to financial market

volatility.Thestresstestingwassupported

by a third-party analytics company and the

outputsupportedbacktestingpoolassetsover

historicalperiodsofvolatility,forexample,the

globalfinancialcrisis.

MEDIUM

Investment

Risks in respect of specific

investmentandrealisation

decisions.Investmentrisksinclude

appropriate research and due

diligencefornewinvestments

and the timely execution of both

investmentsandrealisationsfor

optimisingvalue.

Investmentopportunitiesaresubjectto

rigorousappraisalandamulti-stageapproval

process.Investmentmanagershavewell-

developednetworksthroughwhichthey

attractproprietarydealflow.

Opportunitiestoenterorexitinvestments

arereviewedregularly,beinginformed

bymarketconditions,pricingand

strategicaims.

Theinvestmentteamscontinuetoreview

capacity and capability to ensure appropriate

skillsandresourcesareinplace.Newpositions

havebeenapproved,includingexpertisein

dataandanalytics.

TheInvestmentCommitteemetthroughout

theyeartoconsiderallmaterialinvestment

decisions.

MEDIUM

Market

Riskoflossesinvalueof

investmentsarisingfromsudden

andsignificantmovementsin

publicmarketprices,particularly

inhighlyvolatilemarkets.Private

assetvaluationshaveanelement

ofjudgementandcouldalsobe

impactedbymarketfluctuations.

Caledonia’s principal market

risks are therefore equity price

volatility,foreignexchangerate

movementsandinterestrate

volatility.Anexplanationofthese

risksisincludedinnote23.

Marketrisksandsensitivitiesarereviewed

weeklywithactionstaken,whereappropriate,

tobalanceriskandreturn.

Aregularreviewofmarketandportfolio

volatilityisconductedbytheboard.Reviews

alsoconsiderinvestmentconcentration,

currencyexposureandportfolioliquidity.

Portfolioconstruction,includinguseofprivate

assets,providessomemitigation.

Marketvolatilityhasremainedafactorduring

theyear,althoughthroughthesecondhalf

of2023andearly2024thishasreduced.

Geopoliticalconflictsremain,withthewars

intheUkraineandMiddleEast.Inflation

pressureshavereducedbutremainhigherthan

centralbanktargets,withinterestrateslikelyto

behigherforlonger.

ThePublicCompaniesteam,whilstfocused

onlong-termreturns,remainalerttopricing

opportunitiesaroundtheircoreholdings.

Foreignexchangemovementscontinueto

beaninherentriskinthebusiness.Ongoing

monitoringremainsthekeycontrol,withno

appetitetohedgeatthecurrenttime.

MEDIUM

Liquidity

Riskthatliabilities,including

privateequityfunddrawdowns,

cannotbemetornewinvestments

cannot be made due to a lack of

liquidity.Suchriskcanarisefrom

beingunabletosellaninvestment

duetolackofamarket,orfrom

not holding cash or being able to

raisedebt.

Detailed cash forecasting for the year

aheadisupdatedandreviewedquarterly,

including the expected drawdown of capital

commitments.Aweeklycashupdateis

produced,focusedontheshort-term

cashforecast.

Loanfacilitiesaremaintainedtoprovide

appropriateliquidityheadroom.

The liquidity of the portfolio is

reviewedregularly.

£227mofcashonbalancesheetat31March

2024,inadditionto£250mofundrawn

revolvingcreditfacilities,providingsignificant

capacitytofundattractiveinvestment

opportunities.Enhancedstress-testingand

capital allocation modelling completed during

theyear,withactivityinplacetoreviewand

renewcreditfacilities.

All excess cash placed in AAA-rated money

marketfundsonanovernightbasis.Regular

counterpartyreviewsareundertaken.Nobank

termdepositsutilised.

LOW

60 Caledonia Investments plc Annual Report 2024

Principal risks Mitigation and management Key developments

Current risk status

and movement

in year to

March 2024

ESG & climate change

Risks in relation to the successful

incorporation of ESG matters and

climate change impacts into our

investmentapproach.

Identifyingopportunitiestodrive

ourapproachtoESGmatters,

deliverstrongreturnsand

managetheriskstomeetevolving

stakeholderexpectations.

Caledonia continues to build ESG

knowledge,particularlyonclimate

change,anddeveloppolicyandprocesses

to integrate ESG matters into our

investmentapproach.Theassessment

ofnewandexistinginvestmentswillfully

incorporate ESG and climate change risks

andopportunities.

Biannual pool reports to the board include ESG

informationanddevelopmentsrelatingtothat

pool.Thirdpartyconsultantswereengagedto

support the assessment of climate risks and

opportunitiesassociatedwiththePrivateCapital

pool,enablingincreaseddisclosureinthisyear’s

TCFDReport.

MEDIUM

Regulatory & legal

Risks arising from exposure to

litigationorfraud,orfailureto

adhere to the tax and regulatory

environment.

Caledonia operates across a

numberofjurisdictionsandin

anindustrythatissubjectto

significantregulatoryoversight.

Caledonia has internal resources to

consider regulatory and tax matters

astheyarise.Professionaladvisersare

engaged,wherenecessary,tosupplement

internal knowledge in specialised areas

orwhennewregulationsareintroduced.

Activitiessupportedbyregularstaff

training.

Caledonia is a member of the Association

ofInvestmentCompaniesandoperatesin

linewithindustrystandards.

KeychangestotheUKCorporateGovernance

Codeoccurred,includingenhancementstothe

reportingofthemonitoringandreviewofthe

effectivenessofthecompany’sriskmanagement

andinternalcontrolframework,andafuture

declarationoftheeffectivenessofthematerial

controls.Additionalresourcehasbeenengaged

todrivethecompany’sresponse,coupledwith

thefurtherenhancementofexistinggovernance

arrangements with the formation of an

OperationalRiskCommittee.Therequirementsare

non-prescriptive,withcoredevelopmentsplanned

for 2024 in preparation for pilot reporting to the

boardinMarch2025.

LOW

Operational

Risks arising from inadequate

orfailedprocesses,peopleand

systems,orfromexternalfactors.

Operationalrisksarisefrom

therecruitment,development

andretentionofstaff,systems

andprocedures,andbusiness

disruption.

Systems and control procedures are

developedandreviewedregularly.They

aretestedtoensureeffectiveoperation.

Appropriate remuneration and other

policies are in place to facilitate the

retentionofkeystaff.

Business continuity plans are maintained

andupdatedasthebusinessevolvesand

inresponsetoemergingthreats.This

includesaspecificfocusoncybersecurity.

Cybersecurityremainsamaterialriskexposure,

withfocusedactivityduringtheyeartofurther

strengthenthecontrolenvironment.Technology

controlimprovementsincludedfirewall

enhancements,penetrationtestinganddisaster

recoveryimprovements.Humanerrorremains

akeypotentialweaknessforallbusinessesand,

tofurtherstrengthencontrols,compulsory

annual cyber security training has been enhanced

alongsidetargetedphishingcampaigns.

Simulatedscenarioexerciseshavehelpedfocus

remediationonweakercontrols.Thesewereakey

driverinmigratingserversfromCayzerHousetoa

secureoff-sitedatacentre,mitigatinganumberof

potentialthreatstobusinesscontinuity.

A real-time cyber security simulation was

facilitatedbyathird-partyforexecutives,which

strengthened planned incident management and

cyberdefenceimprovements.

OracleNetSuitereplacedlegacyfinancesystems,

bringing greater resilience and facilitating a refresh

ofkeyprocesses.Anewexpensessystemisbeing

rolled out to further enhance controls and assist

withtheautomationoftaxcomplianceprocesses.

MEDIUM

Strategic report Corporate governance Financial statements Other informationIntroduction

Going concern and viability

Thereviewofgoingconcernandviabilitywasconsidered

andapprovedbytheboard,followingfullscrutinybythe

AuditandRiskCommittee.Thisreviewconsideredthekey

riskstothegroup,theirpotentialfinancialimpactand

mitigatingactions.Anumberofscenarioswereconsidered

to stress-test the robustness of the group’s position to

adverseevents.Thesescenarioswereappliedtoadetailed

three-yearfinancialplanthatwasapprovedbytheboard

inMarch2024.

Going concern

The board has undertaken an assessment of the

appropriateness of preparing its financial statements on a

goingconcernbasis,takingintoconsiderationfuturecash

flows,currentcashholdingsof£227m,undrawnbanking

facilitiesof£250mandreadilyrealisableassetsof£950m

aspartofawiderprocessinconnectionwithitsviability

assessment.Ithasconcludedthatthegrouphassufficient

cash,otherliquidresourcesandcommittedbankfacilities

tomeetexistingandnewinvestmentcommitments.

Thedirectorshaveconcludedthatthegrouphasadequate

resources to continue in operational existence for a

periodofatleast12monthsfromthedateofapproval

ofthefinancialstatements.Accordingly,theycontinueto

consider it appropriate to adopt the going concern basis

inpreparingthefinancialstatements.

Viability statement

Thedirectorshaveassessedtheviabilityofthegroupover

theperiodtoMay2027(threeyearsfromthedateof

signingthefinancialstatements),havingdetermined

thatthisisanappropriateperiodforwhichtoprovide

thisstatementgiventhegroup’slong-terminvestment

objective,theresiliencedemonstratedbythestress

testingandtherelativelylowworkingcapitalrequirements

ofthegroup.

Theviabilityassessmenttakesintoaccountthegroup’s

position,itsinvestmentstrategyandthepotentialimpact

oftherelevantriskssetoutinthisstrategicreport.In

makingthisstatement,theboardissatisfiedthatthe

groupoperatesaneffectiveriskmanagementprocess

and confirms that it has conducted a robust assessment

oftheprincipalandemergingrisksfacingthegroup.

This includes those that would threaten its strategic

objectives,itsbusinessmodel,itsabilitytooperateand

itsfutureperformance,solvencyorliquidity.Basedonthis

assessment,thedirectorshaveconcludedthatthegroup

will be able to continue in operation and meet its liabilities

astheyfalldueovertheperiodtoMay2027.

Inmakingthisassessment,thedirectorstookcomfort

fromtheresultsoftwostresstestsoverthefive-year

periodto31March2029thatconsideredtheimpact

ofsignificantmarketdownturnconditions.

Thefirststresstestaddressedthreediscretescenarios:

a5%reductioninthevalueofSterlingversustheUSdollar

comparedtotherateon31March2024,a12-monthdelay

toPrivateCapitalrealisationsandallFundspool

commitmentsfallingdue.

The second stress test modelled a market downturn

eventoveratwo-yearperiodreflecting:afallinPublic

Companiesinvestmentincomeof20%andPrivate

Capitalinvestmentincomeof100%,areductioninPublic

Companiesmarketpricesof20%,aninabilitytorealise

thePrivateCapitalportfolioanda50%reductionin

distributionsfromthegroup’sfundsportfolio.Tosimulate

an extreme downside scenario the impact of a market

downturneventandallfundcommitmentsfallingdue

wasalsoassessed.Thedirectorsdonotbelievethe

extremedownsidescenario,islikelybutfactorsthisinto

theviabilityassessment.

Weconcludedthatevenunderamarketdownturn

eventandallfundcommitmentsfallingdue,thegroup

has sufficient liquidity on the balance sheet to meet its

obligationsastheyfalldue.

Overall,throughourstresstesting,wewereableto

demonstrate the strength of the group’s financial

positionand,inparticular,itsabilitytosettleprojected

liabilitiesastheyfalldue,evenunderextremely

adversecircumstances.

TheStrategicreportwasapprovedbytheboardon

20May2024andsignedonitsbehalfby:

MatMasters

ChiefExecutiveOfficer

20May2024

62 Caledonia Investments plc Annual Report 2024

Strategic report Corporate governance Financial statements Other informationIntroduction

Flexible

& responsible

We invest from our own balance sheet,

which allows us to be flexible. It also

means that our own and our shareholders’

interests are absolutely aligned.

Mountain Adventure Fund (in partnership with

the Mountain Training Trust)

During the year, The Caledonia Investments Charitable Foundation approved

a grant to the Mountain Adventure Fund (in partnership with the Mountain

Training Trust) which aims to give every inner-city child the opportunity to be

inspired and motivated by the rugged outdoors and the challenges mountain

environments have to offer.

64 Caledonia Investments plc Annual Report 2024

Corporate

governance

Board of directors

Governance framework

Corporate governance report

Section 172 statement

Nomination Committee report

Audit and Risk Committee report

Directors’ remuneration report

Governance Committee report

Directors’ report

109

Responsibility statements

113

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Board of directors

David Stewart

Chair

Jamie Cayzer-Colvin

Executive Director

Date of appointment:17March2015

Tenure:9years2months.Appointedtothe

boardofdirectorson17March2015andas

Chairon20July2017

External appointments:

•Chairmanandco-founderofIMMAssociates

•ChairmanofHermesInvestmentManagement

•Non-executivedirectorofLongviewPartners

Skills and experiences:

•Extensiveexperienceofinternationalbusiness

andassetmanagementintheUK,Asiaand

emerging markets

•EffectiveleadershipofCaledonia’sboardand

valuableinsightandadviceinrelationtothe

company’s global portfolio

Date of appointment:4April2005

Tenure:19years1month

External appointments:

•Memberoftheadvisorycommitteesofa

numberofCaledonia’sfundinvestments

•ChairofTheCaledoniaInvestmentsCharitable

Foundation

Skills and experiences:

•PreviouslyservedasChairmanofThe

HendersonSmallerCompaniesInvestment

Trustandasanon-executivedirectorofPolar

Capital Holdings and Polar Capital Funds

• Senior management experience and

investmentexpertise

• Specifically contributes to the long-term

sustainable success of the company through

hisleadershipofCaledonia’sfundsinvestment

strategy

Date of appointment:1April2022

Tenure:2years1month.Appointedtothe

boardofdirectorsandasChiefExecutiveOfficer

Designateon1April2022,becomingChief

ExecutiveOfficeron27July2022

Skills and experiences:

• Qualified chartered accountant

•Specialisedincorporatefinancebeforejoining

Caledonia,helpingsmallandmid-sized

companiesaccessprivateequityfinance

•Investmentexpertise,seniormanagement,

international business experience and

leadership skills to enable him to execute the

board’s strategy

Date of appointment:28March2023

Tenure:1year1month

External appointments:

•Non-executivedirectorandChairoftheAudit

CommitteeatAuroraInvestmentTrust

•Non-ExecutivedirectorofApolloSyndicate

ManagementLimited

•Non-executivedirectorofLeedsBuilding

Society

•Advisertotechnologystart-upGrafterr

Skills and experiences:

• Qualified chartered accountant

•Over20yearsworkinginfinancialservices

acrossaudit,mergersandacquisitionsand

privateequity

• Worked on numerous transactions within the

retail,consumerandleisuresectorsat

boutiquecorporatefinancehouseMcQueen

•Bringsextensiveinnovationandstrategy

experiencetotheboard,withaparticularfocus

ontechnologyandenvironmental,socialand

governancematters

Date of appointment:1September2023

Tenure:8months

External appointments:

•TreasurerandProChancelloroftheUniversity

of Sheffield

Skills and experiences:

• Qualified chartered accountant

•Significantlistedcompanyexperience,having

previouslyservedasCFOofArrowGlobal

Group,whichincludeditssuccessfulIPO,

andJohnLaingGroup,beforeitstakeprivate

transaction with KKR

•Extensivecommercialandfinancialexperience,

withover20years’experienceinsenior

financial leadership roles

Date of appointment:18July1985

Tenure:38years10months

External appointments:

• Chairman of The Cayzer Trust Company and

Bedford Estates

Skills and experiences:

•Experienceofmerchantbanking,commercial

bankingandcorporateandprojectfinance

withBaringBrothers,CayzerIrvineand

CayzerLtd

•Responsibleforalargenumberofinvestment

acquisitionsanddisposalsasanexecutive

director of Caledonia

•Extensiveknowledgeofthecommercial

property sector and broad commercial

managementexperience,whichenablehim

toprovideinsightandconstructivechallenge

acrossthebreadthofCaledonia’sinvestment

activities

N R

Mat Masters

Chief Executive Officer

Farah Buckley

Independent Non-Executive Director

Rob Memmott

Chief Financial Officer

The Hon Charles Cayzer

Non-independent Non-Executive Director

RG N N

66 Caledonia Investments plc Annual Report 2024

Guy Davison

Senior Independent Non-Executive Director

Lynn Fordham

Independent Non-Executive Director

Date of appointment:1January2018

Tenure:6years4months

External appointments:

• Trustee of the Sussex Community Foundation

•Non-executivedirectorofCinvenFunds

Skills and experiences:

• Qualified chartered accountant

•FoundingpartnerofCinven,centraltothe

developmentandexpansionofthebusiness.

Duringhis29years,herepresentedthefirm

asChairmanornon-executivedirectoratsome

25ofitsportfoliocompanies

•30years’knowledgeandexperienceofprivate

equityinvesting,bothintheUKandEurope,

which is of particular benefit to the board and

Caledonia’sPrivateCapitalteaminevaluating

newunquotedinvestmentopportunitiesand

managing its existing unquoted portfolio

Date of appointment:1January2022

Tenure: 2 years 4 months

External appointments:

•ChairofRMA-TheRoyalMarinesCharity

•Non-executivedirectorofDominosPizza

Group,NCCGroup,EnfiniumandNewRiver

REIT

Skills and experiences:

• Qualified chartered accountant

•FormerlytheManagingPartnerofLarchpoint

Capital,CEOofSVGCapital,non-executive

directorofFuller,Smith&Turner

•Previouslyheldseniorfinance,riskandstrategy

positionsatBarrattDevelopments,BAA,Boots,

ED&FMan,BATandMobilOil

•Wideranginglistedcompany,privateequity

and finance experience across a range of

sectors,thelatterbeingofparticular

importance to her role as Chair of the Audit

and Risk Committee

Date of appointment:28March2022

Tenure:2years1month

External appointments:

•Non-executivedirectorofBlueRiver

Acquisition Corp

Skills and experiences:

• Former director of Electra Partners and

ProvidenceEquityPartnersandformer

non-executivechairofPershingSquare

Holdings

• Worked with both established and early-stage

companiesduringherprivateequityand

investmentcareeracrossarangeofdifferent

sectorsandjurisdictions

•Extensiveprivateequityandinvestment

experienceinEurope,NorthAmericaandAsia,

enablinghertoprovideconstructivechallenge

across a broad range of the company’s

investments

Date of appointment:4April2005

Tenure:19years1month

External appointments:

•Non-executivedirectorofCobehold

• Trustee of the Rank Foundation

•ChairmanofRealEstateInvestors

Skills and experiences:

•JoinedtheCaledoniagroupin1997fromClose

BrothersCorporateFinance,workingat

Sterling Industries before transferring to

Caledonia’sheadofficein1999asan

investmentexecutive

• Held board positions at numerous Caledonia

investeecompanies

•Corporatefinanceandinvestmentexpertise,

broad senior management experience and

teamleadershipskills,whichbenefitthe

successfuldeliveryoftheboard’sstrategy

Date of appointment:22July2019

Tenure:4years9months

External appointments:

•Non-executivedirectorofSchroders

•Involvedinanumberofcharitabletrustsand

foundations,includingasadirectorofthe

Schroder Charity Trust and as a trustee of

the Schroder Foundation

Skills and experiences:

•FormerexecutivedirectorofGauntlet

InsuranceServicesbeforebecoming

non-executivein2004until2019

•Broadexperienceinboththefinancialservices

andcharitablesectors,aswellasadeep

experienceofpublicandprivatebusinesses

with significant family shareholdings

Anne Farlow

Independent Non-Executive Director

Will Wyatt

Non-independent Non-Executive Director

Claire Fitzalan Howard

Independent Non-Executive Director

RG N

A G N A G N R

A G N

Audit and Risk

Governance

Nomination

Remuneration

Committee chair

Committee membership key

Board diversity

Male 7

Female 4

White 10

Asian/AsianBritish 1

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Governance framework

RI/RC Working

Group

Advisesandassistsin

thedevelopmentand

implementationof

Caledonia’s approach

tosustainabilitymatters,

including climate-related

issues.

Operational Risk

Committee

Considers the company’s

overallriskstrategy,

reviewstheinternal

financialcontrolsystems,

anddevelopsand

implements the procedures

fordetectingfraudand

preventingbribery.

Investment

Committee

Considers and formally

approvesnewinvestments

andproposedrealisations.

Othermattersconsidered

include the day to day

management of the

company’s business where

notdelegatedelsewhere.

Valuation

Committee

Formallyreviews

valuationsofallofthe

company’sinvestmentsat

each half-year and full-year

end.Meetingsare

observedby

representativesfrom

theexternalauditor.

Investment

Management

Committee

Considersmattersrelating

to the company’s

investmentportfolio.

Private Capital

Investment

Committee

Reviewsthemanagement

ofinvestmentsheldwithin

thePrivateCapitalpool

andconsiderspotential

PrivateCapital

transactions.

The board as a whole is collectively responsible for the success of the company and for supervising its affairs.

It sets the company’s strategy, ensures that the necessary financial and human resources are in place to enable

the company to meet its objectives and reviews management performance. It also defines the company’s purpose

and culture, and sets the company’s values and standards to ensure that its obligations to its shareholders and

other stakeholders are understood and met. It aims to provide leadership of the company within a framework

of prudent and effective controls, which enables risk to be assessed and appropriately managed.

Chair

The Chair is primarily responsible for the

leadership of the board to ensure that it

carriesoutitsroleeffectivelyandfor

successionplanning.

Senior Independent Director

The Senior Independent Director is

responsibleforprovidingasoundingboard

fortheChairand,ifnecessary,toserve

as an intermediary for the other directors

andshareholders.

Chief Executive Officer

TheChiefExecutiveOfficerisresponsible

fortheimplementationoftheboard’s

strategy,policiesandthemanagementof

thecompany’sactivities,otherthanthose

mattersspecificallyreservedfortheboard.

Audit and Risk

Committee

Governance

Committee

Nomination

Committee

Remuneration

Committee

Disclosure and

Delegation

Committee

Dealswithroutine

administrativematters

ormattersforwhich

boardapprovalhas

alreadybeengivenin

principle.Italsoconsiders

potentialdisclosure

mattersasrequired.

Further detail

See page 82

Further detail

See page 88

Further detail

See page 80

Further detail

See page 90

MANAGEMENT COMMITTEES

INVESTMENT TEAM

BOARD COMMITTEES

THE BOARD

68 Caledonia Investments plc Annual Report 2024

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Corporate governance report

Membership and attendance

Theboardheldsixscheduledmeetingsduringtheyear,together

withtwoadditionalmeetingsconvenedatshortnotice.Attendance

ofthedirectorswasasfollows:

Director

Meetings

attended

Meetings

eligible

to attend

D C Stewart 8 8

MSDMasters

7 8

TJLivett

3 3

RWMemmott

5 5

JMBCayzer-Colvin

7 8

SJBridges

2 2

F A Buckley 8 8

Hon C W Cayzer

7 8

GBDavison 8 8

MAFarlow 8 8

LRFordham 8 8

CLFitzalanHoward 8 8

W P Wyatt 8 8

1. MatMasterswasunabletoattendonemeetingduetoafamilyfuneral.

2. TimLivettretiredasadirectoron1September2023.

3. RobMemmottwasappointedasadirectoron1September2023.

4. JamieCayzer-Colvinwasunabletoattendonemeeting,whichwascalled

atshortnotice,duetoapre-existingcommitment.

5. StuartBridgesretiredasadirectoron19July2023.

6. TheHonCWCayzerwasunabletoattendonemeetingduetoillhealth.

Further information on the matters

reserved for the board

Statement of compliance

The board considers that the company has complied with the UK

CorporateGovernanceCode(‘Code’)publishedinJuly2018for

thedurationofthereportingperiod.

AcopyoftheCodeisavailableonthewebsiteoftheFinancial

ReportingCouncilatwww.frc.org.uk.

Pages70to112comprisethecompany’scorporate

governancestatement.

The board

Overall responsibility and operation

Aspartofthecompany’sgovernanceframework,whichis

summarisedonpage68,theboardhasadoptedaformalschedule

thatsetsoutthosematterswhichitspecificallyreservesforitsown

decision and those which are delegated to board committees and

toexecutivemanagement.Mattersreservedfortheboard’sown

decisionincludethefollowing:

• responsibilityforthecompany’sstrategy,valuesandculture

• approvalofthecompany’shalf-yearresults,full-yearresults

and annual report

• approvalofthecompany’sdividendpolicyanddividend

distributions

• theappointment,re-appointmentandremovalofthe

external auditor

• theappointmentandremovalofdirectorsofthecompany,

asprescribedbythecompany’sarticlesofassociation,and

ofcertainotherexecutives,includingtheCompanySecretary

• the terms of reference of board committees and the

membership thereof

• directors’ remuneration and terms of appointment

• setting annual budgets

• thecompany’ssystemsofriskmanagementandinternalcontrol,

includingproceduresfordetectionoffraudandprevention

of bribery

• responsibility for the company’s arrangements to enable

its employees to raise any matters of concern

• treasurypolicies,bankingcounterpartiesandcounterparty

exposure limits

• significant capital transactions

• politicaldonations.

TherolesoftheChair,theChiefExecutiveOfficerandtheSenior

Independent Director are separated and clearly defined in separate

statementsofresponsibilities.Theseresponsibilitiesare

summarisedinthegovernanceframeworkonpage68.

Themattersreservedfortheboardandthestatementsof

responsibilitiesoftheChair,theChiefExecutiveOfficerandthe

SeniorIndependentDirectorarereviewedbytheboardannually

andpublishedonthecompany’swebsite.

Caledonia recognises the value of

good corporate governance to deliver

long-term sustainable success.

70 Caledonia Investments plc Annual Report 2024

Appointment, induction and training

The company complies with the recommendation of the Code

thatalldirectorsofFTSE350companiesshouldbesubjectto

annualre-electionbyshareholders.

Onappointment,newdirectorsareofferedinductionandtraining

consideredappropriatebytheboard,andsubsequentlyas

necessary.RecentlyappointeddirectorsFarahBuckleyandRob

Memmottbothbenefitedfromcomprehensivetailoredinduction

programmes.Theannualperformanceevaluationoftheboard

encompassestheidentificationofanyindividualtrainingneeds

ofboardmemberssothat,ifnecessary,thesecanbereviewed

bytheChairwiththedirectorsconcerned.Thedirectorsreceive

briefingsatboardmeetingsonregulatoryandotherissuesrelevant

tothecompanyanditsbusinesssectorand,inaddition,mayattend

externalcoursestoassistintheirprofessionaldevelopment.

Board composition

Theboardcurrentlycomprises11directors.ExcludingtheChair,

threeofthedirectorsareexecutiveandsevenarenon-executive.

Theboardconsidersallofthenon-executivedirectorstobe

independent other than Will Wyatt and The Hon C W Cayzer

whowereexecutivedirectorspriortobecomingnon-executive

directors and are members of the Cayzer family concert party

(‘CayzerConcertParty’).

DavidStewartwasappointedtotheboardasanindependent

non-executivedirectorinMarch2015,beforetakingontherole

ofcompanyChairinJuly2017.Theboard,ontherecommendation

oftheNominationCommittee,whichwaschairedbyGuyDavison,

Caledonia’sSeniorIndependentDirector,extendedDavid’stenure

asChairinMay2023untilthecompany’sannualgeneralmeeting

in2025,subjecttohisannualre-electionbyshareholders.This

lengthenedDavid’santicipatedserviceontheboardbyalittle

overoneyear,beyondthenineyearsrecommendedintheCode.

Asreportedin2023,theextensionwasconsideredappropriate

followingaperiodofnotableboarddevelopmentwhichincluded

theappointmentofthreenewnon-executivedirectorsandtwo

executivedirectorssinceJanuary2022.

Forthereasonssetoutinlastyear’sannualreport,theboardasked

StuartBridges,aformerindependentnon-executivedirector,

to extend his tenure until no later than the 2023 annual general

meeting,whichextendedhistenurebeyondnineyears.Theboard

recognisedthatserviceovernineyearsisoneofthecircumstances

setoutintheCodethatisconsideredlikelyto,orcouldappearto,

impairindependence.However,followingacarefulassessment,

includingfeedbackobtainedaspartofthe2023boardevaluation

process,theboardconcludedthatStuartremainedstrongly

independentincharacterandjudgement.

AsexpectedintheCode,atleasthalfoftheboard’s

membersthroughouttheyear,excludingtheChair,

wereconsideredindependent.

Board committees

Asidentifiedinthegovernanceframework,whichissummarised

onpage68,theboardhasdelegatedcertainspecificareasof

responsibilitytothefollowingstandingcommittees:the

NominationCommittee,theAuditandRiskCommittee,the

GovernanceCommitteeandtheRemunerationCommittee.

Further details of the work of each of these committees and their

membershipduringtheyeararesetoutintheirrespectivereports

onpages80to108.

Thetermsofreferenceofeachcommitteearereviewedannually

andareavailableonthecompany’swebsite.

Board performance evaluation

Theboardconductsanannualevaluationofitsperformanceand

thatofitscommitteesand,inaccordancewithgoodpractice,

engages an independent third party facilitator to assist in this

processeverythreeyears.Fortheyearended31March2024,

BoardLevelPartners(‘BLP’)wasengagedtoconductanexternally

facilitatedevaluationoftheboard,itscommitteesandindividual

directors.Itsselectionfollowedaformaltenderprocessledby

companyChairDavidStewartsupportedbyGuyDavison,Senior

IndependentDirector,andtheCompanySecretary.BLP,which

hadnotundertakenanypreviousassessmentsforCaledonia,has

nootherconnectionwiththecompany.Followingappointment,

theCompanySecretarywasresponsibleforprovidingBLPwith

theaccessandsupportrequiredtoundertakeitsreview,with

thecompanyChairavailablethroughout.

BLPconductedacomprehensiveprocesswhichincluded

structuredinterviewswitheachdirectorandtheCompany

Secretary.Afterobservingaboardmeetingandreviewingpast

boardandcommitteepapers,BLPpresenteditsfindingsina

detailedreporttotheboard.Aspartofitsreview,BLPcompleted

anappraisalofthecompanyChairanddelivereditsfindingsto

theSeniorIndependentDirector.Thiswasusedtoinformthe

non-executivedirectors’annualappraisalofDavidStewart’s

performance.BLPalsopresentedindividualconfidentialreports

oneachdirectortotheChair.

Progressinachievingtheprioritiesidentifiedandconsideredin

previousannualboardevaluationswasreviewedaspartofBLP’s

externalreview.BLP’soverallconclusionwasthattheboard

overseesthemanagementofthecompanyeffectivelyandhasthe

necessaryskillsandexpertisetosafeguardstakeholders’interests.

Theexternalboardreviewdidnothighlightanymaterial

weaknessesorconcerns,butitdididentifysomeareasforfurther

focusin2024andbeyond.Theseincluded:

• long-term succession planning

• structuringinvestorrelationstofurtherenhanceshareholder

communications

• reviewingthemanagementcommitteestructure

• ongoinglearninganddevelopment.

BLPwasprovidedwiththeopportunitytoreviewthissummary

aheadofitspublication.

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Corporate governance report (continued)

Key stakeholders, engagement and board decision making

Detailsinrespectofthecompany’skeystakeholders,together

with commentary on how the directors addressed the matters

setoutinsection172(1)(a)to(f)oftheCompaniesAct2006(‘the

CompaniesAct’)astheymadedecisionsduringtheyear,areset

outintheSection172statementonpages74to78.

Shareholders

Annual general meeting

AsnotedintheSection172statement,thecompany’sannual

general meeting remains an important part of Caledonia’s

shareholdercommunicationsprogramme.

Allresolutionsproposedatthe2023annualgeneralwerepassed.

However,morethan20%ofparticipatingindependent

shareholdersvotedagainsttheusualresolutiontoapprovea

waiverofthemandatoryofferprovisionssetoutinRule9ofThe

CityCodeonTakeoversandMergers(‘Rule9WaiverResolution’)

inrelationtotheCayzerConcertParty.ARule9WaiverResolution

issoughtbytheboardeachyeargiventheobligationthatcould

arise on the Cayzer Concert Party to make a general offer for the

entire issued share capital of the company as a result of purchases

by the company of ordinary shares pursuant to the authority

receivedfromshareholderstomakemarketpurchases.

The company is grateful to those shareholders that took the time

toengageontheRule9WaiverResolutionfollowingtheconclusion

oftheannualgeneralmeeting.Onelargeshareholderwho,having

previouslysupportedtheresolution,hasadoptedapolicyofvoting

inlinewiththevotingrecommendationsofaproxyvotingadviser

whichisgenerallynotsupportiveofsuchresolutionsgiventheir

potentialtoleadtocreepingcontrol.Inresponsetothefeedback

receivedfromthisshareholder,whocontinuestobesupportive

ofmanagement,thecompanyhassoughttoengagewiththe

proxyvotingadvisertoexplaintheboard’sposition.Whilstthe

boardrecognisesitsposition,thedirectorscontinuetobelieve

that the company’s ability to exercise the authority to make

marketpurchasesofitsownshareswarranted,andcontinues

towarrant,approvalofaRule9WaiverResolution.Asimilar

resolution will therefore be proposed once again at this year’s

annualgeneralmeeting.

The ninety-fifth annual general meeting of the company will be

heldat6ParkPlace,St.James’s,LondonSW1A1LRonWednesday,

17July2024at11.30am.Thenoticeoftheannualgeneralmeeting

and details of all of the resolutions to be put to shareholders are

set out in a separate circular published at the same time as this

annualreport.

Relations with controlling shareholders

Asat20May2024,beingthelatestpracticabledatepriortothe

publicationofthisannualreport,theCayzerConcertPartyheld

48.8%ofCaledonia’svotingrights.

UndertheFinancialConductAuthority’sListingRules,where

a premium listed company has a controlling shareholder or

shareholders (being a person or persons acting in concert who

exerciseorcontrol30%ormoreofthecompany’svotingrights),

the company is required to enter into a written and legally binding

agreement which is intended to ensure that the controlling

shareholder undertakes to comply with certain independence

provisions,namelythat:

• transactions and arrangements with the controlling shareholder

(and/oranyofitsassociates)willbeconductedatarm’slength

and on normal commercial terms

• neither the controlling shareholder nor any of its associates

willtakeanyactionthatwouldhavetheeffectofpreventing

the listed company from complying with its obligations under

theListingRules

• neither the controlling shareholder nor any of its associates will

propose or procure the proposal of a shareholder resolution

whichisintendedorappearstobeintendedtocircumventthe

properapplicationoftheListingRules.

TheboardconfirmsthatagreementsspecifiedundertheListing

Rulesasdescribedabove(whichwererequiredtobeinplaceby

17November2014)wereenteredintobythecompanyon

30October2014withTheCayzerTrustCompanyLimited(‘Cayzer

Trust’)andseparatelywiththeTrusteeofTheCaledonia

InvestmentsplcEmployeeShareTrust(‘EmployeeShareTrust’),

whichisdeemedbyThePanelonTakeoversandMergerstoform

partoftheCayzerConcertParty,andremaininplace.Underthe

termsofitsagreement,CayzerTrusthasundertakentoprocure

thecompliancewiththeindependenceprovisionsofallofthe

othermembersoftheCayzerConcertParty,otherthanthe

EmployeeShareTrust.

Theboardconfirmsthat,duringtheperiodunderreviewandupto

20May2024,beingthelatestpracticabledatepriortothe

publicationofthisannualreport:

• thecompanyhascompliedwiththeindependenceprovisions

included in the agreements with Cayzer Trust and the Employee

Share Trust

• sofarasthecompanyisaware,theindependenceprovisions

includedintheagreementshavebeencompliedwithbyCayzer

Trust and the Employee Share Trust

• sofarasthecompanyisaware,theprocurementobligation

included in the agreement with Cayzer Trust has been complied

withbythatcompany.

72 Caledonia Investments plc Annual Report 2024

Directors’ conflicts of interest

EachdirectorhasadutyundertheCompaniesActtoavoida

situationwheretheyhave,orcouldhave,adirectorindirect

interestwhichconflicts,ormaypossiblyconflict,withthe

company’sinterests.TheCompaniesAct,however,allowsdirectors

of public companies to authorise conflicts and potential conflicts

wherethearticlesofassociationcontainaprovisiontothiseffect.

The Companies Act also allows the articles to contain other

provisionsfordealingwithdirectors’conflictsofinteresttoavoid

abreachofduty.

There are safeguards in the company’s articles which apply when

the directors decide whether to authorise a conflict or potential

conflictofinterest.First,onlyindependentdirectors,beingthose

whohavenointerestinthematterbeingconsidered,areableto

taketherelevantdecisionand,second,intakingthedecision,

thedirectorsmustactinawaywhichtheyconsider,ingoodfaith,

willbemostlikelytopromotethesuccessofthecompany.The

directorsareabletoimposelimitsorconditionswhengiving

authorisationsiftheythinkthisisappropriate.

The board has adopted procedures to address the requirements

oftheCompaniesActinrelationtodirectors’conflictsofinterest.

Each new director on appointment is required to declare any

potentialconflictsituations,whichmayrelatetothemortheir

connectedpersons.Thesearereviewedbytheboardand,if

necessary,alsobytheGovernanceCommittee,whichthen

considerswhetherthesesituationsshouldbeauthorisedand,

ifso,whetheranyconditionstosuchauthorityshouldbeattached.

Each board meeting includes a standing agenda item on conflicts

of interest to ensure that all directors disclose any new potential

conflictsituations.Thesearethenreviewed,againifnecessary

bytheGovernanceCommittee,andauthorisedbytheboard

asappropriate.Aregisterofdirectors’conflictsofinterestis

maintainedbytheCompanySecretaryandisreviewedannually

bytheGovernanceCommittee.

TheCorporategovernancereportwasapprovedbytheboardon

20May2024andsignedonitsbehalfby:

David Stewart

Chair of the board

20May2024

The table below highlights where key content can be located

elsewhere in this annual report to enable shareholders to

evaluatehowthecompanyhasappliedtheprinciplessetout

intheUKCorporateGovernanceCode.

Page

Board leadership and company purpose

Chair’s statement 12

ChiefExecutiveOfficer’sreport 14

Section172statement 74

Performance measures 20

Sustainability 42

Key stakeholders 75

Division of responsibilities

The board 70

Board committees 71

Membershipandattendance 70

Composition, succession and evaluation

Board of directors 66

Board composition 71

Boardperformanceevaluation 71

Nomination Committee report 80

Boardandcommitteediversitypolicy 80

Audit, risk and internal control

Audit and Risk Committee report 82

Responsibility statements 113

Risk management 57

Goingconcernandviability 62

Internal control systems 86

Remuneration

Annual statement by the Chair of the

Remuneration Committee 90

Remuneration policy 93

Annual report on directors’ remuneration 99

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Section172oftheCompaniesAct2006(the‘Act’)requires

eachofourboarddirectors,individuallyandcollectively,

toactinthewaytheyconsider,ingoodfaith,wouldmost

likely promote the long-term success of the company for

thebenefitofitsmembersasawhole.Indoingthisthey

arerequiredtohaveregard,amongstotherrelevant

matters,tothe:

a. likelyconsequencesofanydecisionsinthelongterm

b. interestsofthecompany’semployees

c. needtofosterthecompany’sbusinessrelationships

withsuppliers,customersandothers

d. impactofthecompany’soperationsonthecommunity

 andenvironment

e. desirabilityofthecompanymaintainingareputationfor

high standards of business conduct

f. needtoactfairlyasbetweenmembersofthecompany.

Indischargingtheirduties,eachdirectorwillseekto

balancetheinterests,viewsandexpectationsof

Caledonia’sstakeholders,whilstrecognisingthatevery

decision the board makes will not necessarily result in a

positiveoutcomeforall.However,theboard’saimisto

makesurethatdecisionsareconsistentandpredictable.

Insodoing,itseekstogeneratelong-termcompounding

realreturnsthatoutperforminflationby3%-6%overthe

mediumtolongterm,andtheFTSEAll-Shareindexover

10years.Thecompanydoesnothavecustomers.Rather,

its shareholders are the stakeholders who most closely

resemblecustomers.

Inthissection,wedescribeeachofourkeystakeholder

groups,theirimportanceandhowweengagedwiththem

duringtheyear.Alsoprovidedareexamplesoftheways

in which the board considered the interests of these

stakeholders and had regard to the matters set out in

section172(a)to(f)oftheActwhenmakingitsdecisions.

Further details on how the board operates can also be

foundintheCorporategovernancereportonpage70

andatwww.caledonia.com.

Section 172 statement

How we engage with stakeholders and make decisions

74 Caledonia Investments plc Annual Report 2024

Our stakeholders and their importance

Centred around a collection of values

that shape our approach to every

aspect of investing, our team is key

to delivering long-term performance.

We seek to create an environment that

enables us to attract, retain and

develop exceptional people

Our people

The Caledonia Investments Charitable

Foundation - we look to support

communities which resonate with

our history, values, culture and team

Caledonia intern programme - we

remain committed to advancing new

talent in our industry

Community

Our portfolio companies, both public

and private, and private equity funds

provide the source of returns to our

shareholders. We build rewarding

relationships with, and a deep

understanding of, our investments

Our portfolio

companies and

funds

We build and value long-term

supplier relationships built on

transparency, reliability and

quality to support our

investment activities

Suppliers

Our shareholders provide Caledonia’s

permanent capital and it is for their

benefit that the directors are required

to promote the company’s success

Our shareholders

Stakeholders

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Section 172 statement (continued)

Why we engage How we engage How the board engages Outcomes

Shareholdersprovide

Caledonia’s permanent capital

and it is for their benefit that

the directors are required

to promote the company’s

success.

We remain committed to a

proactiveandconstructive

dialogue with shareholders

toensure:

• there is a good understanding

ofthecompany’spurpose,

performance and approach

toenvironmental,socialand

governancematters

• the board is aware of issues

thatareimportanttothem.

Wecommunicatewithinvestors

throughnumerouschannels:

•ourChiefExecutiveOfficer

andChiefFinancialOfficer

hold regular meetings with

institutionalinvestors,private

client stockbrokers and fund

managers,particularlyfollowing

the publication of our half-year

and annual results

•regularmarketannouncements,

including monthly NAV

announcements,half-year

and annual results webcasts

keep shareholders apprised of

performance.

Further details on relations with

controlling shareholders can be

foundonpage72.

• The Chair and other non-

executivedirectorsareavailable

to attend shareholder meetings

ifrequested.

• Caledonia’s annual general

meeting is an important

part of our communications

programme,providingdirectors

with the opportunity to meet

shareholders in person and to

heartheiropinions.

• Views put forward by

shareholders and analysts

are reported back to the

board,withperiodicreports

and presentations from

the company’s brokers and

management on shareholder

feedback and general market

perceptionofthecompany.

•Shareholderperspectivesandongoing

engagement are considered as part of

strategyandotherdiscussions.

•Duringtheyear,weinstigateda

reviewofourinvestorrelationsand

communications programme and

activities,toensureourinvestment

proposition is well understood and

recognisedbythemarket.

•Sentimenttowardsinvestment

companies,andinparticularthose

investinginprivateassets,continues

to weigh on discounts across the

sector.Webelievethattheshareprice

fundamentallyundervaluesthequality

oftheinvestmentportfolioanditslong

termperformance.InMarchandApril

2024,werepurchased290,219sharesat

anaveragediscountof36%,resultingina

10.1paccretiontoNAVpershare.

• In making its decision regarding the

2023interimandfinaldividends,

the board considered shareholders’

expectations,thenetrevenuegenerated

by the company and the capacity of the

companytopaydividendsoutoffree

cashflow,takingintoaccountfuture

dividendliquidityrequirementsand

availability.

Our shareholders

Why we engage How we engage How the board engages Outcomes

Ourteamiskeytodelivering

long-termperformance.

Recruiting and retaining

engaged and experienced

employees who share our

valuesandcultureiscentralto

deliveringCaledonia’spurpose.

We encourage honest and open

communication,bothformallyand

informally,toensureemployees

remaincloselyinvolvedwiththe

successofthebusiness.

Further details on our workplace can

befoundonpage46.

• Caledonia has a small number

of employees which enables

regular formal and informal

accesstoboarddirectors,

irrespectiveofseniority,

together with frequent

colleagueinvolvementinboard

andcommitteemeetings.

• Formal periodic reports

onstaff-relatedmatters,

including any instances of

concernsorgrievancesraised

andsuggestionsreceivedfor

improvementstotheworkplace

culture,assisttheboardin

understandingtheviewsof

employees.

•Lastyearwecompletedourfirst

colleagueengagementsurveytohelp

usbetterunderstandtheviewsofour

employees and how we can continue to

developandimprove.Thisyearinvaluable

insight from our employees in 2023 has

helpedcreateournewmanifesto,rooted

intheconceptof‘timewellinvested’to

articulateourcultureandvalues.

Our people

76 Caledonia Investments plc Annual Report 2024

Why we engage How we engage How the board engages Outcomes

Ourportfoliocompanies,both

publicandprivate,andprivate

equityfundsprovidethesource

ofreturnstoourshareholders.

Ourfocusremainsonlongterm

carefulstewardshiptocreatevalue

forourshareholders.

We seek to build rewarding

relationshipswith,andadeep

understandingof,ourinvestments.

Public Companies

• We use in-house and third party

research to closely monitor the

performance of companies in the

IncomeandCapitalportfolios.

•Meetingswithmanagement

teams are an important part of our

ongoingstewardshipactivities.

• We make considered use of our

votingrightsatallshareholder

meetings.

Private Capital

•Ouremployeesserveasnon-

executivedirectorsontheboards

of portfolio companies in which

weholdasignificantinvestment,

providingoversightandhelping

to ensure that our board is kept

apprisedofkeydevelopmentsand

theviewsofabroadergroupof

stakeholders.

Funds

•Alongsideproactivemonitoring

offundperformance,weare

represented by employees on

numerousadvisorycommittees

established by the managers of the

fundsinwhichweinvest.

• A regular programme of meetings

withfundgeneralpartners,other

limitedpartnersandinvestee

businesses enables us to gain

real insight into the ongoing

managementofourportfolio.

Further details on our stewardship

activitiescanbefoundonpage48.

• Decision making is supported

bycomprehensiveregular

reporting to the board by the

HeadsofQuotedCompanies,

PrivateCapitalandFunds,

supported by members of their

respectiveteams.

Private Capital

•Ourprogrammeofregular

presentations from the

leadership of portfolio

companiesprovidesdirectors

additional insight to assist with

investmentdecision-making.

•InJanuary2024,thedirectors

attended a conference and

dinner with portfolio company

management,whichincluded

business presentations and

providedtheopportunityto

meet a broader group of senior

management.

• Following the acquisition of

CirrusInns,theboardengaged

with the leadership and

employees of portfolio company

LiberationGroupovertwodays,

gaining first hand experience of

itsinnsanddrinksbusiness.

Public Companies

•Overthecourseoftheyear,theteam

attended numerous meetings with

portfolio company management and

usedtheirvotingrightsatallshareholder

meetings.

Private Capital

• As part of our long-term approach to

investment,closeengagementwithour

PrivateCapitalcompaniescontributes

toastronggovernanceframeworkto

supportgrowthandcreatevalue.

•7IM,theverticallyintegratedretailwealth

managementbusiness,wassoldto

OntarioTeachers’PensionPlan(‘OTPP’)

boardduringtheyear.

The board carefully considered the offers

receiveddecidingthatitwasinthebest

interests of Caledonia’s shareholders

toconcludeasaletoOTPP,providing

asignificantpremiumovercarrying

valueandcreatingfutureopportunities

for7IM’semployeesandtheongoing

developmentofthebusinessasa

‘platformled’wealthmanager.

•CaledoniaacquiredAIR-servEurope,a

leadingdesignerandmanufacturerofair,

vacuumandjetwashmachines.

The acquisition was consistent with

Caledonia’sstrategyofinvestingin

quality,robust,wellestablishedprivate

companies,withprovenmanagement

teams,andseekinglong-termgrowth.

Funds

•Overthecourseoftheyear,theteam

hasattendedinexcessof120meetings

withourportfoliofundmanagers,

includingannualmeetings,advisory

boardmeetings,in-personmeetingsin

theUK,AsiaorNorthAmericaandvirtual

meetingsheldonline.

Our portfolio companies

and funds

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Section 172 statement (continued)

Why we engage How we engage How the board engages Outcomes

We look to support the

communities in which the

companyandourinvestee

companies operate and

charities which resonate

withourhistory,values,

cultureandteam.

Wesupportadvancingnew

talent and social mobility

withintheinvestment

managementindustry.

Charitable giving

TheCaledoniaInvestments

Charitable Foundation

(‘Foundation’)isthefocusfor

Caledonia’scharitableactivity,

providingsupporttomanygood

causeseachyear.Thecompany

madeagrantof£300,000tothe

Foundationduringtheyear.

Volunteering

As part of our ongoing charitable

commitment and to further

encourage employees to support

theFoundation,togetherwith

othercharitiesandgoodcauses,we

provideuptotwoadditionaldays

ofleaveeachyeartoemployeesso

theycanvolunteertheirtime.

Intern and alumni programme

With support from an independent

facilitatorandinvolvementfrom

employeesacrossthebusiness,the

programmeprovidesinternswith

aninvaluableinsightintoCaledonia,

theinvestmentmanagement

industry and helps build skills for

theirfuturecareers.

Further details on our community

activitiescanbefoundonpages45

and47.

Charitable giving

The Foundation reports

formallyonitsactivitiesto

theboardeachyear.Thisis

accompanied by an annual

showcaseeventtowhichall

directorsareinvited.

Intern and alumni programme

Eachyear,oneofournon-

executivedirectorsisinvited

toparticipateinaneventin

which our interns pitch their

investmentideas.

Charitable giving

Numerouscharitiesreceivedvaryinglevelsof

supportovertheyear.

Notablemulti-yeardonationswereprovidedto:

• the Cornwall Community Foundation which seeks

toimprovethelivesofindividualswithinCornwall

•theMaritimeVolunteerServicetopurchase

equipmentandtotrainitsmembersinmaritime,

engineering,operationsandcommunications

skills

•Horatio’sGardenforthecontinueddevelopment

ofgardensinNHSSpinalInjurywards.

Othernotabledonationsincludedthosetothe

WheelyboatTrust,providingdisabledpeoplewith

freedomandindependenceonthewater,andLet

MeKnow(‘LMK’),aneducationcharityworking

withyoungpeopletopreventrelationshipabuse,

domesticviolenceandsexualassault.

Volunteering

EmployeessupporttheFoundation,charitiesand

othergoodcausesbyvolunteeringtheirtime,

alongside fundraising and participating in charitable

events.

Intern and alumni programme

•12successfulcandidateswhoaspiretohavea

careerininvestmentmanagementwereoffered

placesonourannualinternshipprogramme.

• We recently established an intern alumni

programme to help foster enduring relationships

with our ‘Sealions’ as they begin their careers

andtoprovideuswithaccesstopotentialfuture

talentandnetworks.

Community

Why we engage How we engage How the board engages Outcomes

Wevaluelong-term

supplier relationships built

ontransparency,reliability

and quality to support our

investmentactivities.

Webenefitfromgoodrelationships,

oftenbuiltovermanyyears,with

suppliersandadviserswhoshare

ourvalues.

The board is informed on

key supplier matters where

relevant.

We operate clear payment practices to ensure fair

andpromptpaymentforthegoodsandservices

wereceive.Weagreepaymenttermswhen

contracting with suppliers and abide by them when

wearesatisfiedthatwehavereceivedthegoodsor

servicesinaccordancewiththeagreedtermsand

conditions.WhilstwearenotasignatoryoftheUK

PromptPaymentCode,wepaidmorethan89%

(2023:98%)ofoursupplierinvoiceswithin30days

duringtheyear,with98.5%paidwithin60days.

Suppliers

78 Caledonia Investments plc Annual Report 2024

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Nomination Committee report

Membership and attendance

The membership and attendance record of the Nomination

Committeeduringtheyearwasasfollows:

Meetings

attended

Meetings

eligible

to attend

DCStewart(Chair) 1 1

SJBridges

1 1

F A Buckley 1 1

Hon C W Cayzer 1 1

GBDavison 1 1

MAFarlow 1 1

CLFitzalanHoward 1 1

LRFordham 1 1

W P Wyatt 1 1

1. StuartBridgesretiredfromtheboardon19July2023.

Responsibilities

TheCommitteeisresponsiblefor:

• regularlyreviewingthestructure,sizeandcompositionofthe

board,includingitsskills,knowledge,experienceanddiversity

• consideringsuccessionplanningfordirectorsand,ifrequested

bytheboard,otherseniorexecutives

• identifying and recommending to the board candidates to

fillboardvacancies,usingexternalsearchconsultants

where necessary

• keepingunderreviewtheleadershipneedsofthecompany,

bothexecutiveandnon-executive

• reviewingthetimecommitmentrequiredfromnon-executive

directors,ensuringtheyreceiveformallettersofappointment

thatsetoutclearlythecompany’sexpectations.

Diversity and inclusion

Caledonia’s policy is to appoint candidates to roles based on merit

andagainstobjectivecriteria.TheCommitteeseekstoensurethat

theboardanditscommitteeshaveadiversemixofskills,

experience,perspectives,opinionandknowledge,whichfacilitates

discussionanddebatetoenablethesuccessfuldeliveryofthe

company’sstrategy.Itremainscommittedtoincreasingdiversity

andinclusionovertime.

WhilstCaledoniahasnotadoptedanymeasurablediversityand

inclusionobjectivestodate,externalsearchconsultantsare

requiredtoputforwarddiversecandidatesfornewpositions.

TheCommitteecontinuestofocusonachievingtheboard

compositiontargetssetbytheFTSEWomenLeadersReview,

theParkerReviewandtheListingRulesduringtheyear.

Detailedgenderandethnicitydiversityanalysisinrespectofthe

board,includingprogressagainstthetargetssetoutintheListing

Rules,andCaledoniamorebroadly,isprovidedonpages45and46.

Work of the Nomination Committee

TheCommitteemetonasingleoccasionduringtheyear.Areasof

focusincluded:

• theappointmentofRobMemmottasChiefFinancialOfficer

• theextensionofDavidStewart’stenureascompanyChairuntil

thecompany’sannualgeneralmeetingin2025,subjecttoannual

re-electionbyshareholders,andtheassociatedrenewalofhis

letter of appointment

• considerationofadetailedskills,experienceanddiversitymatrix,

which sought to identify future recruitment priorities based

onidentifiedgaps,industryandstakeholderexpectationsand

good practice

• considerationofthecontributionsandeffectivenessofthe

non-executivedirectorsseekingelectionand/orre-election

atthe2023annualgeneralmeeting,priortogiving

recommendations to the board and shareholders for their

electionand/orre-election.

The Nomination Committee

focuses on evaluating the directors,

considering the skills and attributes

needed for the long term. It identifies

suitable board candidates and assists

with succession planning.

Further information on the Nomination

Committee’s terms of reference

80 Caledonia Investments plc Annual Report 2024

Company Chair

DavidStewartwasappointedtotheboardasanindependent

non-executivedirectorinMarch2015,beforetakingontherole

ofChairinJuly2017.Theboard,ontherecommendationofthe

Committee,whichwaschairedbyGuyDavison,Caledonia’sSenior

IndependentDirector,extendedDavid’stenureasChairinMay

2023untilthecompany’sannualgeneralmeetingin2025,subject

tohisannualre-electionbyshareholders.ThisextendedDavid’s

serviceontheboardbyalittleoveroneyear,beyondthenine

yearsrecommendedintheUKCorporateGovernanceCode.As

previouslyreported,theextensionwasconsideredappropriate

followingaperiodofnotableboarddevelopmentwhichincluded

theappointmentofthreenewnon-executivedirectorsandtwo

executivedirectorssinceJanuary2022.

Chief Financial Officer

ThesearchforanewChiefFinancialOfficerwassuccessfully

concludedduringtheyear.RobMemmottsucceededTimLivett

on1September2023followingacomprehensivesearchexercise

supportedbyRussellReynolds.RussellReynolds,whichis

accredited by the Enhanced Voluntary Code of Conduct for

ExecutiveSearchFirms,wasselectedfollowingaformaltender

process.Particularcarewastakentoensurethatequitywaspart

ofthesearchprocessfromtheoutset.

Committee evaluation

TheactivitiesoftheCommitteewereconsideredaspartofthe

externaleffectivenessreviewconductedbyBLPsummarisedon

page71.BLPfoundthattheCommitteefunctionedwell,withthe

appropriatebalanceofmembership,skillsandexperience.

David Stewart

Chair of the Nomination Committee

20May2024

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Audit and Risk Committee report

Membership and attendance

The membership and attendance record of the Audit and Risk

Committeeduringtheyearwasasfollows:

Member

since

Meetings

attended

Meetings

eligible

to attend

LRFordham(Chair) January2022 3 3

GBDavison January2018 3 3

MAFarlow March2022 3 3

Dear Shareholder

I am pleased to present the Audit and Risk Committee’s report

onceagain.

TheCommittee’sresponsibilitiesinclude:

• monitoring the integrity of the company’s financial statements

andreviewinganysignificantfinancialreportingjudgementsthey

contain,togetherwithassociatedcompanyannouncements

• reviewingthecompany’ssystemsofinternalcontrol

• consideringCaledonia’sapproachtorisk,includingstrategy,

risk appetite and the identification of principal and emerging

risks,togetherwiththemonitoring,managementand

mitigation of such risks

• overseeingtherelationshipwiththeexternalauditor

• considering annually whether an internal audit function

isrequired.

TheCommitteecomprisedexclusivelyofindependentnon-

executivedirectorswithsignificantfinancialandsectorexperience,

meetingthreetimesintheyearended31March2024,inMay

andNovember2023andinMarch2024.Sincetheyearend,

theCommitteemetagaininMay2024toconsidermatters

relatingtothe2024annualreportandfinancialstatements.

TheChiefExecutiveOfficer,theChiefFinancialOfficer,the

Company Secretary and members of the finance team attended

allmeetings,togetherwithcompany’sexternalauditor,BDOLLP

(‘BDO’).Fromtimetotime,otherboardmembersand/orsenior

executivesmayalsobeinvitedtojoinallorpartofameeting.The

CommitteealsoheldseparatediscussionswithBDO’sauditpartner

withoutmanagementparticipation.

TheareasoffocusfortheCommitteeduringtheyearincluded:

• thevaluationofunlistedassets

• thecompany’sfinancialreporting,togetherwithBDO’saudit

findingsandviabilityandgoingconcernreviews

• the company’s Task Force on Climate-related Financial

Disclosures(‘TCFD’)reporting

• thedevelopmentofindicatorstoassessthequalityofthe

independentauditbyBDOinlightoftheFinancialReporting

Council’s(‘FRC’)AuditCommitteeandtheExternalAudit:

MinimumStandards

• thecompany’sriskdashboardandcontrolsassurancereports.

Intheyearahead,amongsttheCommittee’susualareasoffocus,

we plan to consider management’s proposed approach to the

changes set out in the 2024 edition of the UK Corporate

GovernanceCode(the‘Code’),withaparticularfocusonthe

changestoaudit,riskandinternalcontrol.

Iwillonceagainbeavailableatthisyear’sannualgeneralmeeting

toansweranyquestionsontheworkoftheCommittee.

Lynn Fordham

Chair of the Audit and Risk Committee

20May2024

The Audit and Risk Committee plays

a significant role in ensuring that the

company’s financial statements are

properly prepared and the system

of controls that is in place is effective

and appropriate to manage and

mitigate risk.

Further information on the Audit and Risk

Committee’s terms of reference

82 Caledonia Investments plc Annual Report 2024

Area of

responsibility

Activity

Meetings considered at

May Nov Mar

Reporting

•Revieweddraftresultsandannualreportforthefinancialyearended31March2023,includingkey

accountingjudgements,goingconcernandviability,andconsideredwhetherthereportwasfair

balanced and understandable

•Revieweddrafthalf-yearresultsandreportingforthesixmonthsended30September2023,

includingkeyaccountingjudgementsandgoingconcernandviability

•Reviewedaccountingstandardamendments,togetherwithlikelyimpact(ifany)

•ReviewedTCFDreportingfortheyearended31March2023

•ReviewedapproachtoTFCDreportingfortheyearended31March2024

Valuations

•Consideredvaluationsofprivateassetsasat31March2023and30September2023,including

assessments undertaken by the Valuation Committee

•Approvednon-materialadjustmentstothecompany’svaluationpoliciestoreflectupdated

IPEV guidelines

Internal control

•ConsideredcontrolassurancereportsinrespectofPrivateCapitalpoolprocessesandfinancial

statement reporting

•ConsideredcontrolenvironmentreportingforcompanieswithinthePrivateCapitalpool

•Consideredcontrolsassurancereportsfortheinvestmentaccountingsystem,newERP

and physical and IT access controls

Risk

•Reviewedthecompany’sinvestmentandoperationalriskdashboards

•Consideredthecompany’sinvestmentriskreport

•Receivedacomprehensiveupdateoncybersecurity,disasterrecoveryandinformation

technology matters

•Consideredprincipalrisks,riskappetiteandplanneddevelopmentstoriskmanagementframework

External audit

•ReviewedBDO’sexternalauditreportonthedraftresultsandannualreportforthefinancialyear

ended31March2023,togetherwiththemanagementrepresentationletter

•ConsideredBDO’sreviewoftheresultsforthesixmonthsended30September2023

•ApprovedBDO’sfeeproposalsfortheyearended31March2024andengagementletters

•ReviewedBDO’sexternalauditplanandstrategy

•ConsideredtheFRC’sAuditQualityInspectionandSupervisionReportinrespectofBDO,together

withtheFRC’soverviewoftheauditqualityofthelargestauditfirms,andBDO’sresponsetothe

FRC’s findings

•ApprovedindicatorstoassessthequalityoftheindependentauditbyBDO

Internal audit

• Considered the need for an internal audit function

Governance

•ReviewedtheCommittee’stermsofreference

•Reviewedandapprovedthepolicyfortheprovisionofnon-auditservicesbythe

independent auditor

•ConsideredFRCchangestotheUKCorporateGovernanceCodeandmanagement’s

planned approach

Other matters

•Consideredongoinginvestmenttruststatuscompliance

•ReviewedstatusoftheERPsystemimplementation

1. SinceMarch,theCommitteeconsideredmattersregardingtheyearended31March2024,whichincluded:

•reviewingtheresultsandannualreport,accountingjudgements,goingconcernandviabilityandconsiderationofwhethertheannualreportwasfair

balanced and understandable

•reviewingBDO’sexternalauditreportontheresultsandannualreportforthefinancialyearended31March2024

•approvalofthisreport.

Work of the Committee

TheCommitteeundertookthefollowingactivitiesduringtheyear

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Audit and Risk Committee report (continued)

Topic Description of the matter Committee considerations

Financial

statements

TheCommitteereviewedtheformandcontentofthe2024annual

reportandfinancialstatements,includingTCFDreporting.Inconducting

itsreview,theCommitteeconsideredreportspreparedbymanagement

andtheexternalauditor.Management’sreportsprovidedananalytical

reviewofthefinancialstatements,comparingthecurrenttoprioryear

financialpositionandresults,anddetailedthejudgementsandsources

ofestimationuncertaintyinvolvedinapplyingtheaccountingpolicies

tothefinancialstatements.TheCommitteealsonotedthattherewere

no new accounting standards applicable for the current year other

thanaminoradjustmentsuchthatthecompanyisnowrequiredto

disclose its material accounting policy information instead of significant

accountingpolicies.Inaddition,theCommitteeconsideredreports

preparedbymanagementtosupportthegoingconcernandviability

statementsand,asrequestedbytheboard,compliancewiththeannual

report’s‘fair,balancedandunderstandable’provisionsoftheCode.

TheCommitteerecommendedapprovalofthe2024annualreport

andfinancialstatementstotheboard.

The significant issue the Committee considered in relation

tothe2024financialstatementswasthevaluationofunlisted

investments.ThekeyinputsintothevaluationofPrivate

Capitalbusinesseswereconsidered,includingthebroad

range of factors impacting market multiples utilised in the

valuationprocess.

TheCommitteeremainscognisantthatprivateequityfunds

are an increasingly material element of the company’s

investmentportfolio.Privateequityfundstherefore

continuedtoreceiveanenhancedlevelofscrutinyand

debate.Giventhatthemajorityofvaluationsusedinthe

company’s financial statements are based on reports by third

partyprivateequityfundmanagersdatedon,orbefore,

31December2023,particularfocuswasgiventotherisk

ofoutdatedpricing.ThisresultedintheCommitteereceiving

supporting data from management on the composition of

assetswithintheFundspool,withinformationprovided

on the processes used to assess the reasonableness of fund

managervaluationsandanalysisonthelevelofmovement

in related public equity markets in the final two quarters of

thefinancialyear.

Unlisted

valuations

TheCommitteerecognisesthatunlistedinvestmentsinthePrivate

Capital and Funds pools are a significant component of the company’s

assetsandthattheirvaluationissubjecttoconsiderablejudgement

anduncertainty.

The Chair of Committee also chairs meetings of the Valuation

Committee,whichscrutinisesthevaluationofprivateassetinvestments,

adherencetothecompany’svaluationpolicyandconsistencyof

valuationmethodologiesovertime.Reportingisprovidedtothe

Committeeontheassessmentsundertaken,includingthequality

ofreviewandchallenge.

TheCommittee,supportedbytheworkoftheValuations

Committee,wasconsciousoftheslowdowninprivateequity

fundactivityandreducedrealisationsduringthefinancial

year.Considerationwasgiventomarketmovementsand

capitalflows,togetherwithmanagement’sassessmentof

the underlying trading performance of companies within the

NorthAmericanfundsportfolio.Management’sreviewof

toptwentypositionsheldbyAsiafocusedfunds,including

operationalmetricsandcashlevels,informedchallengeand

debate.TheincreaseindisposalactivitybyNorthAmerican

fundsinthefinalquarteratnetassetvalue(‘NAV’)orata

premiumtoNAVprovidedcomfort.

BDO’sauditpartnerattendsValuationCommitteemeetings,

withothermembersoftheAuditandRiskCommitteeinvited

toparticipate.

Significant matters considered

84 Caledonia Investments plc Annual Report 2024

Topic Description of the matter Committee considerations

Going concern

and viability

The directors are required to make a statement in the annual report as to going

concernandCaledonia’slonger-termviability.TheCommitteeprovidesadvice

totheboardontheformandcontentofthisstatement,includingtheunderlying

assumptions.TheCommitteeevaluatedareportfrommanagementsettingout

itsviewofCaledonia’slonger-termviabilityandthecontentoftheproposedgoing

concernandviabilitystatements.Thisreportwasbasedonthegroup’sbasecase

offorecastliquidityoverthreeyearstoMay2027,developedfromthecorporate

financialplan.Inmakingthisassessment,thedirectorstookcomfortfromtheresults

of three stress tests that considered the potential impact of significant market

downturnconditions.

Thefirststresstestaddressedthreediscreetscenarios:a5%reductioninthevalue

ofSterlingversustheUSdollarcomparedtotherateon31March2024,a12month

delaytoanticipatedrealisationsbythePrivateCapitalpoolandareductioninfund

distributionsandallcommitmentsfortheFundspoolfallingdue.

Thesecondstresstestmodelledamarketdownturneventoveratwo-yearperiod

reflecting:afallinPublicCompaniesinvestmentincomeandPrivateCapital

investmentincomeof20%and100%respectively,a20%reductioninmarketprices

ofstocksheldinthePublicCompaniespool,aninabilitytorealisethePrivateCapital

poolanda50%reductionindistributionsfromtheFundspool.Tosimulatean

extremedownsidescenario,theimpactofamarketdownturneventcoupledwith

allfundcommitmentsfallingduewasalsoassessed.

Thethree-yearperiodwaschosenasitprovidedareasonabledegreeofcertainty,

basedonthecompany’sexpectedactivities.

Taking into account the assessment of the group’s

stresstestingresults,theCommitteeagreed

torecommendthegoingconcernandviability

statementsandthree-yearviabilityperiodtothe

boardforapproval.

TheoutcomeofthisactivityledtheCommitteeto

recommend to the board to make the statement

onpage62.

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Audit and Risk Committee report (continued)

Financial reporting

Fair, balanced and understandable statement

TheCommitteereviewedthedraftannualreportand,takenas

awhole,consideredittobefair,balancedandunderstandable.

Toassistinreachingthisview,theCommitteeconsideredareport

preparedbymanagementhighlightingthepositiveandnegative

statements it included to ensure that they fairly reflected the

resultsfortheyear.TheCommitteerecommendedtotheboard

that the statement of directors’ responsibilities in respect of the

annualreportandthefinancialstatements,setoutonpage113,

shouldbesignedaccordingly.

Assurance

TheCommitteeobtainsarangeofassurancetoprovidecomfort

thatthecompany’scontrolsareprovidingadequateprotection

fromrisk.Theseprincipallycompriseexternalauditandcontrols

assurancereportsfrommanagement.Useisalsomadeofexternal

benchmarkingandframeworkstoprovideadditionalassurance

incertainareasofthecompany’soperations.Forexample,

theNationalInstituteofStandardsandTechnology(‘NIST’)

Cybersecurity Framework has been used to assess Caledonia’s

abilitytoprevent,detectandrespondtocyberattacksandalso

toidentifyareasforimprovement.

Internal control and risk management

The board of directors is responsible for the company’s system of

internalcontrolandforreviewingitseffectiveness.Thesystemis

designedtomanage,ratherthaneliminate,theriskoffailureto

achievebusinessobjectivesandcanonlyprovidereasonableand

notabsoluteassuranceagainstmaterialmisstatementorloss.

TheCommitteecompletedareviewoftheinvestmentand

operationalriskdashboardspreparedbymanagement,identifying

theprincipalbusinessrisksimpactingthecompany,togetherwith

the mitigating controls in operation and actions identified for

continuousimprovement.

TheCommitteeconsideredtheeffectivenessofthecompany’s

internalcontrolenvironmentandthestructureinplacetoresolve

identifiedweaknesses.Itreviewedcontrolsassurancereports,

includinganappraisalofprocesseswithinthePrivateCapitalpool

andtosupportfinancialreporting.Theapproachtogovernance

andthecontrolenvironmentofinvesteecompanieswithinthe

PrivateCapitalpoolwasalsosubjecttoreview.Ongoing

compliancewithrequirementsforinvestmenttruststatuswasalso

considered,togetherwiththeimplementationofthereplacement

ofCaledonia’senterpriseresourceplanning(‘ERP’)system.

Acomprehensiveupdateoncybersecurity,disasterrecoveryand

informationtechnologymatterswasonceagainprovidedtothe

Committee,towhichallmembersoftheboardwereinvited.This

included an explanation of Caledonia’s maturity against the NIST

CybersecurityFramework,technologyimprovementsmadeduring

theyearandtheplannedroadmapforfurtherdevelopments

duringthenext12monthsandbeyond,andtheongoingevolution

ofcyberresilienceanddisasterrecoverypreparedness.

Internal audit

Asthecompanydoesnothaveaninternalauditfunction,the

Committeeconsidersannuallywhetherthereisaneedforone.

Thecompanyisaninvestmenttrustandmanagesitsnon-

consolidatedsubsidiariesasotherprivatecompanyinvestments,

witheachbusinessoperatingitsownriskmanagementprocesses.

Thecompanycloselymonitorsitscontrolenvironmentandthose

ofitsprivatecompanyinvestments.TheCommitteerecommended

to the board that an internal audit function was not required at the

presenttime.

External auditor

External auditor BDOLLP

Appointed July2021

Re-appointment

To be proposed at the 2024 annual general

meeting

Leadpartner Peter Smith

Leadpartnerappointed July2021

Audit effectiveness

Auditqualityisreviewedcontinuouslythroughouttheyearbyboth

theChiefFinancialOfficerandtheCommittee.Thefocusiscentred

onthefollowing:

• the quality and seniority of the external auditor’s staff

• theuseofspecialiststaffinareasincludingthevaluationof

unlisted assets and pensions

• the appropriateness of the planned audit methodology as

appliedtoCaledonia’sbusinessactivity

• thelevelofchallengeonkeyareasofjudgementandprofessional

scepticismdisplayed,togetherwiththequalityofreportingto

the Committee

• thequalityofdelivery,includingachievingkeyauditproject

milestonesandreportingtotheCommittee.

InresponsetotheFRC’sMinimumStandardforAuditCommittees,

theCommitteehasdevelopmentofaseriesofindicatorsbywhich

toassessBDO’sauditquality.Thesefocuson:

• FRCqualityinspectionresults,whenavailable

• the percentage of hours of continuity across the

engagement team

• partnerandmanagerhours,includingindependentpartner

reviews,asapercentageofthetotalhours

• hours of specialist time

• percentage of hours spent before year end company to budget

• percentageofkeymilestonesmet.

Duringtheyear,theCommitteeconsideredtheFRC’sAuditQuality

InspectionandSupervisionReportofBDO,publishedinJuly2023,

andsoughtassurancefromtheauditpartnerregardingBDO’s

responsetotheFRC’sfindings.Regularupdatesontheprogress

ofBDO’sresponsehavebeensoughtbytheCommittee.

86 Caledonia Investments plc Annual Report 2024

The Committee considered the following situations where the

auditorshadchallengedmanagement’sassumptions,including:

• theidentificationofobservableinputstoassessthevaluationof

 PrivateCapitalbusinesses

• thevaluationofprivateequityfunds,particularlytheriskposed

by stale pricing

• thevaluationofdefinedbenefitpensionschemeassetsand

 liabilities,includinganexpertreview

• managementoverrideofcontrols.

Independence, objectivity and non-audit work

Tosafeguardtheauditor’sindependenceandobjectivity,the

Committeemaintainsascheduleofspecificnon-auditactivities

whichmaynotbeundertakenbytheexternalauditor,withinthe

broad principles that the external auditor should not audit its own

work,shouldnotmakemanagementdecisionsonbehalfofthe

company,shouldnotbeputintotheroleofadvocateforthe

company and that no mutuality of interest should be created

betweenthecompanyandtheexternalauditor.Asaresultofthe

rigorousreviewbytheCommitteeonnon-auditservicescarried

outbyBDO,relianceontheauditor’sinternalindependence

controlsislimited.

TheCommitteehasinplaceapolicyfortheprovisionofnon-audit

services,meetingtherequirementsofthe2018editionoftheFRC’s

RevisedEthicalStandard2019whichwaslastreviewedinMarch

2024.Certainnon-auditservicesareprohibited.Permittedservices

aresubjecttoapprovalbytheChiefFinancialOfficerandthe

Committee.Totalfeespayablefornon-auditworkcarriedoutby

thecompany’sauditoraresubjecttolimits.

Theleadauditpartnerisrequiredtorotateeveryfiveyears

andotherkeyauditengagementpartnerseverysevenyears.

No contractual obligations restrict the Committee’s choice of

externalauditor.

Forthefinancialyearended31March2024,thetotalfeesfor

non-auditserviceswere£188,500,15.5%ofthetotalauditfees

(2023:£183,500,18.1%).

BDO/Auditor fees

Auditfees £1,028,924 84%

Non-audit fees

 £188,500 16%

2024

Auditfees £831,833 82%

Non-audit fees

 £183,500 18%

2023

1. ThemajorityofwhichrelatedtoBDO’sindependentreviewofthe

company’shalf-yearreport.

2. ThebalancewasincurredbySevenInvestmentManagementin 

 connectionwithCASSassuranceactivities.Theseserviceswereclosely

 relatedtotheworkperformedbyBDOduringtheauditorrequiredbylaw

 orregulation.

3. Analysisisprovidedinnote2tothefinancialstatementsonpage133.

Duringtheyear,BDOprovidednon-auditservicestoassociated

companyStonehageFleming.Asthecompanydoesnotcontrol

StonehageFleming,theCommitteehaslimitedoversightover

thefeesincurred.However,BDOconfirmedthatappropriate

safeguards are in place and an assessment to possible threats

toindependencefromnon-controlledaffiliateswasperformed.

TheCommitteeconcludedthatBDOremainsindependent

andobjective,andthatthelevelofnon-audittoauditfees

remainsacceptable.

Key audit matters raised by the external auditor

The following key audit matters were raised by the external

auditor:

• valuationofunquotedPrivateCapitalinvestments

• valuationoffundinvestments.

Areas reviewed by the external auditor at the

Committee’s request

TheCommitteedidnotrequestanyspecificareasforreviewby

BDObeyondthenormalcycleofauditactivity.

Private meetings

Duringtheyear,theChairoftheCommitteemetseparatelyand

privatelywiththeChiefFinancialOfficerandBDO.TheCommittee

alsometBDOwithoutmanagementpresent.

Statement of compliance

This report has been prepared in compliance with the Competition

andMarketsAuthority2014Orderonstatutoryauditservicesfor

largecompanies.

Lynn Fordham

Chair of the Audit and Risk Committee

20May2024

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Governance Committee report

Membership and attendance

ThemembershipandattendancerecordoftheGovernance

Committeeduringtheyearwasasfollows:

Meetings

attended

Meetings

eligible

to attend

GBDavison(Chair) 2 2

SJBridges

1 1

F A Buckley 2 2

MAFarlow 2 2

CLFitzalanHoward 2 2

LRFordham 2 2

1.StuartBridgesretiredfromtheboardon19July2023.

Responsibilities

TheCommitteeisresponsiblefor:

• keepingunderreviewcorporategovernancemattersrelatingto

the company

• monitoringandreviewingthecompany’scompliancewiththe

ListingRulesrelatingtocompanieswithcontrollingshareholders

• considering the ability of each director to act in the interests of

shareholders as a whole and to exercise independence of

judgementfreefromrelationshipsorcircumstancesthatare

likelyto,orcouldappearto,affecttheirjudgement

• reviewingactualorpotentialconflictsituationsrelatingto

directors,whichmayrequirethepriorauthorisationoftheboard

undertheCompaniesAct2006,andmakingrecommendations

to the board as to whether such situations should be authorised

and,ifso,whetheranyconditions,suchasdurationorscope,

should be attached

• anannualreviewofallactualorpotentialconflictsituations

previouslyauthorisedbytheboardtoensuretheyremain

appropriate

• making recommendations to the board in circumstances where

itbelievesthatadirectormaybesubjecttoaconflictofinterest

thatmayprejudicetheirabilitytoexerciseindependenceof

judgement,includingthatthedirectorabstainsfrom

participating in any decision of the board or any of its

committeesonthematterconcerned.

The Governance Committee monitors

and reviews the ability of each

director to act in the interests of

shareholders as a whole and to

exercise independence of judgement.

Further information on the Governance

Committee’s terms of reference

88 Caledonia Investments plc Annual Report 2024

Work of the Committee

The Committee met twice during the year and the principal

mattersitconsideredincluded:

• thereviewandapprovaloftheCorporategovernanceand

GovernanceCommitteereportsfortheyearended

31March2023

• the influence of the Cayzer family concert party (‘Cayzer Concert

Party’)onCaledonia’sboardandwhetheritwasinthegeneral

interestofthenon-CayzerConcertPartyshareholders,withthe

conclusion that it was

• thereviewandapproval,onbehalfoftheboard,ofstatements

ofcompliancewiththeindependenceprovisionsofthe

ListingRulesrelatingtopremiumlistedcompanieswith

controlling shareholders

• areviewoftheagreements,describedonpage72,entered

intobythecompanyon30October2014withTheCayzer

TrustCompanyLimitedandseparatelywiththeTrusteeof

TheCaledoniaInvestmentsplcEmployeeShareTrust,whichis

deemedbyThePanelonTakeoversandMergerstoformpart

of the Cayzer Concert Party

• thereviewofpotentialconflictsituationsnotifiedbydirectorsin

accordancewiththeCompaniesAct2006andthemakingof

recommendations to the board in relation thereto

• proposedchangestotheUKCorporateGovernanceCodeand

ListingRules.

Committee evaluation

TheactivitiesoftheCommitteewereconsideredaspartofthe

externaleffectivenessreviewcompletedbyBLPsummarisedon

page71.BLPfoundthattheCommitteefunctionedwell,withthe

appropriatebalanceofmembership,skillsandexperience.

Guy Davison

ChairoftheGovernanceCommittee

20May2024

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Directors’ remuneration report

Annual statement by the Chair of the Remuneration Committee

Membership and attendance

The membership and attendance record of the Remuneration

Committeeduringtheyearwasasfollows:

Member

since

Meetings

attended

Meetings

eligible

to attend

MAFarlow(Chair) March2022 3 3

F A Buckley March2023 3 3

CLFitzalanHoward July2019 3 3

D C Stewart July2015 3 3

Dear Shareholder

Onbehalfoftheboard,IampleasedtointroduceCaledonia’s

Directors’remunerationreportfortheyearended31March2024.

Remuneration policy

TheCommittee’soverridingobjectiveremainstomotivate

Caledonia’s leadership team to generate sustainable long-term

returns with remuneration packages that are linked to the company’s

long-termstrategyandperformance.Welooktoensurethatthe

overallquantumandstructureofpayarecompetitive,but

notexcessive,andarecloselyalignedtotheexperienceofour

shareholders through the measurement of NAVTR growth and the

exposuretosharepriceperformanceanddividends.Thisisachieved

in the policy using equity-based remuneration (deferral of bonus into

sharesandlong-termperformanceshareschemeawards)and

shareholdingrequirements.

Ourremunerationpolicywasapprovedbyshareholdersatlastyear’s

annualgeneralmeetingbyamajorityofalmost99%,following

consultationwiththecompany’slargestshareholders.Theprincipal

elementsofthispolicyarereproducedonpages93to98forease

ofreference.Nochangestothepolicyareproposedthisyear.

TheCommitteecontinuestokeepabreastofdevelopments

impactingexecutivepayincluding,forexample,thenewUK

CorporateGovernanceCode(‘Code’)publishedbytheFinancial

ReportingCouncilinJanuary.Thesmallnumberofremuneration

relatedchanges,withwhichtheCommitteeexpectstocomplyinfull,

willfirstapplytoCaledonia’sfinancialyearcommencing1April2025.

Caledoniahasasmallnumberofemployeesbasedinasingleoffice.

This enables the Committee to set the remuneration of both

executivedirectorsandseniormanagementincontext.Regular

reportingprovidesuswithwide-rangingdata,includingemployee

attritionrates,promotiondecisionsandtraininganddevelopment,

together with gender pay gap analysis to ensure Caledonia maintains

equalpayforworkofequalvalue.

NotwithstandingthatCaledoniaisnotlegallyrequiredtodoso,we

haveonceagainreportedpayratioinformationinrelationtotheChief

ExecutiveOfficer,inaccordancewithTheCompanies(Miscellaneous

Reporting)Regulations2018.Thisinformationissetoutonpages

106and107.

New Chief Financial Officer

InMay2023,weannouncedtherecruitmentofRobMemmottas

Caledonia’sChiefFinancialOfficer.RobsucceededTimLivetton

1September2023.TheCommitteeagreedthatRobshouldreceive

abasicsalaryof£420,000,amaximumbonusopportunityof100%

ofsalary(forwhichanyamountinexcessof50%ofsalarywould

be compulsorily deferred for three years under the company’s

deferredbonusplan),anannualawardof150%ofbasicsalary

underthecompany’sperformanceshareschemeand,consistent

withallemployees,apensionentitlementof15%ofsalary.Robdid

notreceiveanysign-oncommitmentsorcompensationforloss

ofbenefitsfromapreviousemployer.ThetermsofRob’s

recruitment,togetherwiththepreviouslyreportedarrangements

forTim’sretirement,wereinaccordancewiththecompany’s

remunerationpolicy.

The Remuneration Committee ensures

that remuneration arrangements

remain closely aligned to Caledonia’s

business model and strategy, the

ultimate aim of which is to generate

long-term compounding real returns

that outperform inflation over the

medium to long term, and the FTSE

All-Share index over 10 years.

TheCompaniesAct2006requiresthecompany’sauditortoreportto

the shareholders on certain parts of the Directors’ remuneration

reportandtostatewhether,initsopinion,thosepartsofthereport

havebeenproperlypreparedinaccordancewiththeLargeand

Medium-sizedCompaniesandGroups(AccountsandReports)

(Amendment)Regulations2013.ThepartsoftheAnnualreporton

directors’remunerationthathavebeenauditedareindicatedinthe

report.TheAnnualstatementbytheChairoftheRemuneration

CommitteeandtheRemunerationpolicyarenotsubjecttoaudit.

Further information on the Remuneration

Committee’s terms of reference

90 Caledonia Investments plc Annual Report 2024

Remuneration for the year ended 31 March 2024

TheAnnualreportondirectors’remunerationsetoutonpages99

to108describesindetailhowourremunerationpolicyhasbeen

appliedfortheyearended31March2024.Itisalsosummarisedin

Remunerationataglanceonpage92.However,Iwouldliketo

highlightthefollowingpoints.

Fund performance

Duringtheyear,theCommitteereviewedthebasisonwhich

performance of the Funds pool is calculated for both the annual bonus

andperformanceshareplan.Itdeterminedthatopeningandclosing

NAVswouldbebasedonthird-partyfundvaluationsreceivedforthe

MarchNAVannouncementpublishedinAprileachyeartoallowfor

aconsistentyear-on-yearcomparisonforremunerationpurposes.

Insomeyearsthismaygiverisetoaminorvariationbetweenthe

performance result used to calculate Funds pool remuneration and

thatreportedinthemainbodyoftheAnnualReport.Therewasno

impactarisingfromthischangeontherewardoutcomesin2024.

Annual bonus

HalfofthebonusforMatMasters,RobMemmottandTimLivettwas

determinedbyreferencetocompanyperformanceandhalfsubject

tothedeliveryofindividualperformanceobjectives.ForJamie

Cayzer-Colvin,whohasspecificresponsibilityfortheFundspool,25%

ofhisbonuswasdeterminedbyreferencetocompanyperformance,

25%tohispool’sperformance,35%tohispool’sobjectivesand15%

toindividualperformanceobjectives.

Forthe2024financialyear,thecompanyperformanceelementofthe

annualbonuswasassessedbyreferencetotherelativeperformance

ofthecompany’sNAVTRagainstinflation,whichforbonuspurposes

wastakenas3%,oractualinflationifgreater,witha10%pay-outifthe

company’sNAVTRmatchedinflation,increasingincrementallytothe

maximumentitlementpayableifoutperformanceof7%ormorewas

achieved.Asdescribedintheremunerationpolicy,aphasedtransition

fromtheRetailPricesIndex(‘RPI’)totheConsumerPricesIndexincluding

owneroccupiers’housingcosts(‘CPIH’)asthemeasureofinflationfor

bonuspurposesoverthethreeyearpolicyperiodhascommenced,

weighted67:33onRPI:CPIHfortheyearended31March2024.

CaledoniadeliveredNAVTRfortheyearof7.4%,outperformingthe

increaseininflation(forbonuspurposes)of4.1%,resultingina43%

paymentforthiselement.TheFundspoolachievedatotalreturnover

theyearonaconstantcurrencybasiswhich,forJamie,wasbelowthe

returnneededtoachievetheminimumpay-outforthatelementofhis

bonus.Afterassessingtheirindividualperformanceand,forJamie,the

attainmentofpoolobjectives,theCommitteeawardedoverall

bonusestoMatandRobof71.5%ofbasicsalary,64%ofbasicsalaryto

Tim(subjecttoprorataadjustmentfortheperioduptohisretirement)

and60.75%ofbasicsalarytoJamie.

Performance share scheme awards

The remaining two-thirds of the performance share scheme awards

grantedin2019(measuredoverfiveyears)andthefirstone-thirdof

theawardsgrantedin2021(measuredoverthreeyears)reachedthe

endoftheirperformanceperiodsinMarchthisyear.Ineachcase,the

awards were measured by reference to Caledonia’s annualised NAVTR

overtherelevantperiods,whichwas10.9%forthe2019awardsand

13.1%forthe2021awards.ThisledtofullvestingofTimLivett’s2019

and2021awards(subjecttoprorataadjustmentfortheperiodupto

hisretirement)andthisportionofMatMasters’andJamieCayzer-

Colvin’s2019and2021awards.

MatwaspreviouslyHeadoftheCapitalportfoliobeforetaking

onbroaderresponsibilityfortheIncomestrategyin2019andhis

appointmentasChiefExecutiveOfficerin2022.TheCapitalportfolio’s

annualisedtotalreturn(relevantfor80%ofhis2019awardand53.3%

ofhis2021award)was12.9%and10.4%respectively(excludingPolar

Capital)andtheIncomeportfolio’sannualisedreturn(relevantfor

26.7%ofhis2021award)was5.8%.Thismeantthatthisportionof

his2019awardsalsovestedinfull,whereastheperformance

conditionsattachedtohis2021awardweremetinpart.TheFunds

pool’sannualisedtotalreturn,relevantfor60%ofJamie’s2019and

2021awards,was16.0%(measuredinSterling)and14.8%(ona

constantcurrencybasis)respectively,whichresultedinthiselement

ofhisawardsvestinginfull.

The Committee once again conducted analysis before concluding that

no windfall gain had arisen in connection with share price growth for

performanceshareschemeawardswhichvestedduringtheyear.

Furtheranalysisissetoutonpage100.

Thedetailsofthevestingscalesfortheseawardscanbefoundon

page100.TheCommitteeconsidersthattheseperformance

outcomesareappropriate.

Theremainingtwo-thirdsofthe2021performancesharescheme

awardswillbetestedinMarch2026attheendofthefive-year

performanceperiod.

The Committee has sought to address each of the following

sixfactorssetoutintheUKCorporateGovernanceCode

whendeterminingremunerationpolicyandpractice:

Clarity–ourpolicyisunderstoodbydirectorsandsenior

management and has been clearly articulated to shareholders

andinvestorbodies.

Simplicity–webelievethecurrentremunerationstructureis

simpleandhavesoughttoavoidcomplexstructureswhich

mayhavethepotentialtodeliverunintendedoutcomes.

Risk–ourpolicyandapproachtotargetsettingseeksto

discourageinappropriaterisk-taking.Wehavealsoembedded

malusandclawbackprovisionswhereappropriate.

Predictability–incentivearrangementsareclearlysetout

andaresubjecttoindividualparticipationcaps.

Proportionality–thereisaclearlinkbetweentheoutcome

ofindividualawards,deliveryofCaledonia’sstrategyand

long-termperformance.

Alignment to culture–payandpoliciesarecascadedto

Caledonia employees and are consistent with Caledonia’s

purpose,valuesandstrategy.

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Remuneration at a glance

Element Year 1 Year 2 Year 3 Year 4 Year 5 Year 5+ Application in 2024 Application in 2025

Salary

MatMasters:

£472,500

RobMemmott:

£420,000

JamieCayzer-Colvin:

£385,000

Salary

MatMasters:

£491,500

RobMemmott:

£437,000

JamieCayzer-Colvin:

£400,500

Pension

Pension entitlement

15%ofsalary

Other

benefits

Other benefits

Familyprivatemedicalinsurance,death-in-service

insurance,permanenthealthinsurance

Directors’ and officers’ liability insurance

MatMastersandJamieCayzer-Colvin:alegacycash

allowance in lieu of a company car

Bonus

Malusand

clawback

provisionsapply

Upto50%

of salary in

cash

Mandatorydeferralin

shares of any bonus

exceeding50%

Annual bonus

MatMasters:

£337,838

RobMemmott:

£175,175

JamieCayzer-Colvin:

£233,888

Annual bonus

Maximumbonuspotential:

100%ofsalary

Performance

share scheme

Malusand

clawback

provisionsapply

1/3ofaward:

performancemeasuredover

three years

Post-vestingholding

period

2024 PSS award

150%ofsalary

MatMasters:

20,573shares

RobMemmott:

17,573shares

JamieCayzer-Colvin:

16,763shares

2025 PSS award

150%ofsalary

2/3ofaward:

performancemeasuredoverfiveyears

Shareholding

requirement

Shareholding requirement

MatMasters:200%ofsalary

RobMemmottandJamieCayzer-Colvin:150%ofsalary

Remuneration for the year ending 31 March 2025

Lookingaheadtothe2025financialyear,thebasicsalariesofthe

executivedirectorshavebeenincreasedwitheffectfrom1April

2024by4%,broadlyinlinewithinflation,whichwasthesame

standardincreaseappliedtotherestofthecompany’semployees.

Thenon-executivedirectorbasicfeewasincreasedby3.7%.No

changeshavebeenmadetothefeespaidtothechairsandmembers

of the Audit and Risk and Remuneration Committees or to the fee

paidtothecompany’sChair.

We plan to make performance share scheme awards to the

executivedirectorsfollowingthereleaseofour2024full-yearresults

inlinewithournormalgrantcycle.Theseawardswillbesubjectto

thesameperformancemeasuresusedforthe2023awardgrants,

which are summarised in the notes to the remuneration policy table

onpage100.

Attheforthcomingannualgeneralmeeting,wewillalsobeseeking

shareholderapprovaltoenabletheintroductionofanHMRC

approved,all-employeeShareIncentivePlaninthefuturetofurther

encourageashareownershipcultureamongstemployees.

Finally,Iwouldliketotakethisopportunitytothankmycolleagues

ontheCommitteefortheircontinueddiligenceandsupportover

thepastyear.

Anne Farlow

Chair of the Remuneration Committee

20May2024

Directors’ remuneration report (continued)

Annual statement by the Chair of the Remuneration Committee

92 Caledonia Investments plc Annual Report 2024

Introduction

Set out below are the material elements of the directors’

remunerationpolicyapprovedbyshareholdersattheannualgeneral

meetingheldon19July2023.Thispolicycameintoeffectfromthat

dateandwillapplyuntilarevisedremunerationpolicyisapprovedby

shareholders,whichitisexpectedwillbeproposedattheannual

generalmeetingin2026.

Implementation of the policy

Therehavebeennochangestothecurrentpolicysinceits

implementation and the extracts included below are for information

onlyandtoprovidecontextforthe2024Annualreportondirectors’

remunerationwhichfollows.Executivedirectors’servicecontract

informationhasbeenupdated.

Thefulldirectors’remunerationpolicyiscontainedonpages75to82

ofthecompany’sAnnualreport2023,whichisavailableinthe

‘Results & reports’ section of Caledonia’s website at

www.caledonia.com.

Underthecurrentstatutoryregime,acompanymaymakea

remuneration payment to a director or a payment for loss of office

onlyifitisconsistentwiththemostrecentlyapprovedremuneration

policyor,ifnot,anamendmenttothepolicytoallowthepayment

mustbeseparatelyapprovedbyshareholders.TheRemuneration

Committeeconsidersthataneffectiveremunerationpolicyneeds

to be sufficiently flexible to take account of future changes in the

company’sbusinessenvironment,andinremunerationpractice

generally.Inframingitspolicy,theRemunerationCommitteehas

thereforesoughttocombinealevelofbreadthandflexibilityto

enable it to react to changed circumstances without the need for

aspecificshareholderapproval,whilstatthesametime

incorporating sufficient detail and transparency to enable

shareholders to understand how it will operate in different scenarios

andfeelcomfortablethatpaymentsmadeunderitarejustified.

Components of remuneration where the Remuneration Committee

wishestoretainalevelofdiscretionareidentifiedintherelevant

sectionsofthepolicy.TheRemunerationCommitteemayalsomake

minor amendments to the remuneration policy to aid its operation

orimplementationwithoutseekingshareholderapproval,for

exampletotakeaccountofachangeinlegislationorforregulatory,

exchangecontrol,taxoradministrativepurposes,providedthatany

suchchangeisnottothematerialadvantageofthedirectors.

Legacy arrangements

Thepolicyisessentiallyforwardlookinginnature.Inviewofthe

long-term nature of the company’s remuneration structures —

includingobligationsunderservicecontracts,pensionarrangements

andincentiveschemes—asubstantialnumberofpre-existing

obligations will remain outstanding at the time that the new policy is

approved,includingobligationsthatare‘grandfathered’byvirtueof

being in force prior to the introduction of the binding remuneration

policyregimeintheUKon27June2012orwhichwereincurred

underthepreviousremunerationpoliciesapprovedbyshareholders.

It is the company’s policy to honour in full any pre-existing obligations

thathavebeenenteredintopriortotheeffectivedateofthispolicy.

Objectives

ThekeyobjectivesoftheRemunerationCommitteeinsetting

thecompany’sremunerationpolicyareasfollows:

• remunerationofexecutivedirectorsshouldbelinkedtothe

company’s long-term performance and its business strategy

• performance related remuneration should seek to align the

interestsofexecutivedirectorswiththoseoftheshareholders

• asignificantproportionofexecutivedirectors’remuneration

should be linked to the performance of the company and

receivableonlyifdemandingperformancetargetsareachieved

• remunerationpackagesforexecutivedirectorsshouldbe

competitive,butnotexcessive,intermsofmarketpractice,in

ordertoattract,retainandmotivateexecutivedirectorsofthe

qualityneededtomanageandgrowthecompanysuccessfully.

Remuneration structure

Executive directors

ThetablebelowsetsoutCaledonia’spolicyinrelationtoeachcomponentofexecutivedirectorremuneration,withfurtherexplanations

inthenotesthatfollow.

Salary (fixed pay)

Purpose and link to strategic

objectives

Tosupporttherecruitmentandretentionofexecutivedirectorsofthecalibrerequiredtomanageandgrow

thecompanysuccessfully.

Operation Reviewedannually.

Opportunityandrecoveryor

withholdingprovisions

Salary increases are normally awarded by reference to any increase in the salaries of other Caledonia staff/the cost of

living,butmaytakeintoaccountotherfactorssuchasexternalmarketpositioning,changeinthescopeoftheindividual’s

responsibilitiesorlevelofexperience,developmentintheroleandlevelsofpayelsewhereinthecompany.

Normallyyearonyearincreasesinbasicsalarieswillnotexceedinflationbymorethan5%,otherthanwherethereisa

significantchangeinroleorresponsibilitiesorinsuchothercircumstancesastheRemunerationCommitteemaydetermine.

Norecoveryorwithholdingprovisions.

Performance measurement

framework

Notapplicable.

Directors’ remuneration report

Remuneration policy

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Directors’ remuneration report (continued)

Remuneration policy

Benefits (fixed pay)

Purpose and link to

strategicobjectives

Toprovidearangeofbenefitsalongsidebasicsalarytorecruitandretainhighcalibreexecutivedirectors.

Operation Executivedirectorsareprovidedwithfamilyprivatemedicalinsurancecover,death-in-serviceinsurance,andpermanenthealth

insuranceand,inthecaseofMrMastersandMrCayzer-Colvin,alegacycashallowanceinlieuofacompanycar.Theyarealso

entitledtoreceiveminorbenefitsthatareavailabletootherCaledoniastaff.

Theexecutivedirectorsarealsocoveredbythecompany’sdirectors’andofficers’liabilityinsurancepolicyandhavethebenefit

ofanindemnityunderthecompany’sarticlesofassociation.

Wherethereisavalidbusinessreasonfordoingso,thecompanymaypayforthecostofspousesorpartnersaccompanyingdirectors

onbusinesstripsandreimbursedirectorsforhotelaccommodationandtravelexpenses(includingpaymentofanytaxthereon).

Executivedirectorsarealsoeligibletoreceiveotherminorbenefitsandexpensespayments(againincludingpaymentofanytaxthereon).

Executivedirectorswillbeeligibletoparticipateinanyall-employeeshareschemesofthecompanyonthesamebasis

asotheremployees.

Opportunityand

recoveryorwithholding

provisions

Ataxablebenefitspackagethatiscompetitivewiththemarketplace.

Thevalueoftaxablebenefitsprovided,otherthanadhocitemsincurredinconnectionwithCaledonia’sbusinessthat

maybedeemedtaxablebenefitssuchastravelandotherexpenses,willnotinaggregateexceed10%ofbasicsalary.

Norecoveryorwithholdingprovisions.

Performance

measurement

framework

Notapplicable.

Short-term incentives (variable pay)

Purpose and link to

strategicobjectives

Torewardperformanceonanannualbasisagainstkeyfinancial,operationalandindividualobjectives.

Operation Discretionary annual bonus scheme and deferred bonus plan under which a proportion of bonus may be compulsorily deferred

intoshares.

Bonusisnotpensionable.

Opportunityand

recoveryorwithholding

provisions

Themaximumpotentialbonusis100%ofbasicsalary.Anybonusover50%ofbasicsalaryiscompulsorilydeferredintoshares

foraperiodofthreeyears.

Participantswillalsoreceiveanamountoradditionalnumberofsharesequaltothevalueofthedividendsthatwouldhaveaccrued

onthedeferredshares.

AllbonuspaymentsaresubjecttotheoverridingdiscretionoftheRemunerationCommittee,whichalsoretainsdiscretion

toamendtheproportionsofbonussubjecttocompulsorydeferralornottorequireanydeferralinexceptionalcircumstances.

Inordertobeentitledtoanannualbonus,anexecutivedirectormustnormallybeinthegroup’semploymentandnotundernotice

oftermination(eithergivenorreceived)atthetimethebonusispaid.

TheRemunerationCommitteehastherighttocancelorreduceanycashbonusordeferredbonussharesgrantedaftertheeffective

dateofthispolicywhichhavenotyetbeenpaidorvested.

TheRemunerationCommitteealsohastherighttorecoverallorpartofcashbonuspaidordeferredbonussharesanddividend

sharesorequivalentamountsawardedafter29July2020withinthetwoyearsfollowingdateofpaymentorvestingasapplicable.

Performance

measurement

framework

Byreferencetoacombinationofcompanyperformanceagainstexternalbenchmarksandindividualperformanceagainstpersonal

objectives.Executivedirectorswithresponsibilityforpoolsofcapitalwillhaveaproportionofbonusdeterminedbyreferencetopool

performanceandobjectives.

Long-term incentives (variable pay)

Purpose and link to

strategicobjectives

Tomotivateexecutivedirectorstodeliverlong-termshareholdervalue,therebyaligningtheinterestsofmanagementwiththose

ofshareholders.

Toencouragelong-termretentionofkeyexecutives.

Operation Aperformanceshareschemeunderwhichparticipantsaregrantedawards(normallyintheformofnil-costoptions)overthe

company’sshares.

Opportunityand

recoveryorwithholding

provisions

Themaximumvalueofawardsthatmaybegrantedinanyyearis200%ofbasicsalary,althoughthecompany’scurrentintention

istograntannualawardsofnomorethan150%ofbasicsalary.

Participantswillalsoreceiveanamountoradditionalnumberofsharesequaltothevalueofthedividendsthatwouldhave

accruedonthesharesawarded.

Performanceismeasuredoverthreeyearsforone-thirdofawardswhichissubjecttoapost-vestingholdingperiod,onan

after-taxbasis,oftwoyears.Theremainingtwo-thirdsofawardsissubjecttoperformanceoverfiveyears,withnopost-vesting

holdingrequirement.

TheRemunerationCommitteehastherighttocancelorreducelong-termincentiveawardswhichhavenotyetvested.

TheRemunerationCommitteealsohastherighttorecoverallorpartofthevalueoflong-termincentiveawardsanddividend

equivalentsreceivedwithintwoyearsofthedatethatsuchawardsvestedandbecameexercisable.

Performance

measurement

framework

Forexecutivedirectorswhoarenotdirectlyresponsibleforapoolofcapital,awardsundertheperformanceshareschemeare

subjecttotheperformanceofthecompany’sannualiseddilutednetassetvaluepersharetotalreturn(‘NAVTR’)measuredover

threeorfiveyears.Forexecutivedirectorsdirectlyresponsibleforapoolofcapital,theawardsaresubjecttoacombinationofthe

performanceofthecompany’sannualisedNAVTRasaboveandtheannualisedtotalreturnsachievedbytherelevantpoolforwhich

heorsheisresponsible,againmeasuredoverthreeorfiveyears.

TherulesoftheschemeprovidediscretiontotheRemunerationCommitteetoamendtheperformancetargetsorimposedifferent

performancetargetsandtodeterminetheappropriateproportionofanyawardsubjecttoeachperformancemeasure.

94 Caledonia Investments plc Annual Report 2024

Pension related benefits (fixed pay)

Purpose and link to

strategicobjectives

Toprovideameansofretirementsavingaspartofarangeofbenefitsalongsidebasicsalarytorecruitandretainhigh

calibreexecutivedirectors.

Operation Executivedirectorsareoffereddefinedcontributionfunding,basedonapercentageofsalary,toapersonalpension

schemeoracashsalarysupplement(oracombinationofboth)attheirchoice.

Opportunityand

recoveryorwithholding

provisions

ExecutivedirectorsreceivethesamepercentageofbasicsalaryasapensioncontributionasallCaledonia’sstaff,currently

15%.Ifadirectorchoosestotakeacashsupplementinlieuofsomeoralloftheirpensionentitlement,thepaymentis

reduced by such amount as is necessary to make the cash supplement cost neutral for the company after taking into

accountNationalInsurancecontributions.

Norecoveryorwithholdingprovisions.

Performance

measurement

framework

Notapplicable.

Notes to the policy table

1. Performance measures and targets

Annual bonus

FortheChiefExecutiveOfficerandtheChiefFinancialOfficer,amaximum

of50%ofbonusisdeterminedbyreferencetocompanyperformanceand

50%byreferencetoindividualperformanceobjectives.Forexecutive

directorsresponsibleforaspecificpoolofcapital,25%ofbonusis

determinedbyreferencetothecompany’sperformance,25%topool

performance,35%topoolobjectivesand15%toindividualperformance

objectives.Inallcases,thecompanyperformanceelementisdetermined

byreferencetotherelativeperformanceofthecompany’sNAVTRagainst

inflation.TheinflationbenchmarkwilltransitionfromRPItoCPIHoverthe

threeyearpolicyperiod,weighted67:33onRPI:CPIHforthe2024financial

year,movingto50:50for2025,33:67for2026and100%onCPIHfor2027.

InflationistakenasthehigheroftheweightedRPI/CPIHbenchmarkoverthe

bonusyearor3%,beingbroadlyinlinewithitshistoriclong-termaverage.

Bonuspaymentsforthiselementcurrentlycommencewitha10%pay-out

ifNAVTRmatchestheinflationbenchmark,increasingincrementallytothe

maximumentitlementpayableifoutperformanceof7%ormoreisachieved.

PoolperformanceisjudgedbytheRemunerationCommitteebyreference

tothereturnachievedbythepoolagainstasettargetreturnandby

objectivessuchasdealflowanddeliveryofportfoliostrategy.Individual

performanceisassessedbyreferencetopersonalobjectivessetatthestart

oftheyear,includingnon-financialmeasuressuchasriskmanagement,

environmental,socialandgovernancematters,marketingofthecompany,

teamleadershipandengagement,managementskillsandpromotionof

Caledonia’scorporatecultureandprofilebothinternallyandexternally.

The Remuneration Committee retains discretion to amend or adopt

alternativeannualbonustargetsand/orlevelsinfutureyearsinorder

toachievebetteralignmentwiththecompany’sstrategicobjectives.

Compulsory deferral of bonus

Deferred bonus plan

Sharessubjecttocompulsorydeferralwillnormallyonlyvestifthe

director remains an employee of the Caledonia group for a three-year

period commencing on the first day of the financial year in which the

awardismade.

Long-term incentive plans

Performance share scheme

One-thirdofawardsgrantedwillbemeasuredoverthreeyearsandtwo-

thirdsoverfiveyears.Inallcases,sharesthatvestwillbecomeimmediately

exercisable/transferableand,iftheawardisstructuredtograntnil-cost

options,willlapseifnotexercisedwithintenyearsofgrant.

AwardsgrantedtotheChiefExecutiveOfficerandChiefFinancialOfficerwill

vestonagraduatedbasis,withvestingcurrentlycommencingat10%onthe

achievementofanannualisedNAVTRof3%,risingincrementallyto100%

vestingonachievementofanannualisedNAVTRof10%,measuredoverthree

andfiveyears.ForMrCayzer-Colvin,whoisheadoftheFundspool,60%ofhis

performance share scheme awards will be measured against the annualised

totalreturnsachievedbytheFundspool,measuredoverthreeandfiveyears.

Awardswillsimilarlyvestonagraduatedbasis,withvestingcommencingat

10%onachievementofanannualisedFundspooltotalreturnof6%,rising

incrementallyto100%vestingonachievementofanannualisedtotalreturnof

13.5%.Theremaining40%ofMrCayzer-Colvin’sperformancesharescheme

awardswillbemeasuredagainstCaledonia’sannualisedNAVTRasabove.

Malus and clawback provisions

The Remuneration Committee has the right to cancel or reduce any cash

bonusordeferredbonussharesgrantedwhichhavenotyetbeenpaidor

vestedandlong-termincentiveawardswhichhavenotyetvested,intheevent

ofamaterialmisstatementofthecompany’sfinancialresults,miscalculation

ofaparticipant’sentitlement,individualmisconductoraneventresultingin

material loss or reputational damage to the company or any member of the

group.TheRemunerationCommitteemay,actingfairlyandreasonably,

reducethelevelofvestingtotakeaccountofanymatterwhichitconsiders

appropriateincludingthebroaderperformanceofthecompany,

theshareholderexperienceandtheconductoftheparticipant.

TheRemunerationCommitteealsohastherighttorecoverallorpartof

cashbonuspaidordeferredbonussharesanddividendsharesorequivalent

amountsawardedafter29July2020withinthetwoyearsfollowingdateof

paymentorvestingasapplicableandthevalueoflong-termincentiveawards

anddividendequivalentsreceivedwithintwoyearsofthedatethatsuch

awardsvestedandbecameexercisable,intheeventofamaterial

miscalculationofaparticipant’sentitlement,amaterialmisstatementor

restatement of the company’s financial results for the years to which the

performanceperiodsrelate,ormaterialpersonalmisconductthatwould

justifysummarydismissal,resultinsignificantreputationaldamagetothe

company,haveamaterialadverseeffectonthecompany’sfinancialposition,

orreflectasignificantfailureofthecompany’sriskmanagementorcontrol.

Rationale for choice of performance measures for the short and long-term

incentive plans

The Remuneration Committee has chosen NAVTR as the basis of performance

measurementforthecompanyforbothitsshort-termandlong-termincentive

arrangements as it regards this as the best indicator of the success or failure of

managementdecisionsintermsofcreatingvalueforthecompany.

Forthecompanyperformanceelementoftheannualbonusscheme,the

boardhastakentheviewthatbenchmarkingagainstastockmarketindex

orindicesoverashortperiodisnotrelevantgivenCaledonia’slong-term

investmenthorizonandthenatureofitsportfolio.TheRemuneration

CommitteehasthereforeinsteadchosenUKinflation,subjecttoaminimum

of3%,asthecomparator,asonthisbasisexecutiveswillonlyberewardedto

theextentthattheyareabletodeliverpositiverealreturnsforshareholders.

TheRemunerationCommitteewillreviewtherateofincreaseinUKinflation

atthestartofeachfinancialyearandmayadjustthelevelofoutperformance

required for the incremental and maximum bonus payments in order to

ensurethattheyremainafairmeasureofperformance.

Forawardsundertheperformancesharescheme,theRemuneration

Committee has chosen Caledonia’s annualised NAVTR as the performance

measurement,asitbelievesthatthisisthemosteffectivemethodofaligning

directors’rewardswiththelong-termstrategicobjectiveofthecompanyof

deliveringannualisedreturnsoverrollingten-yearperiodsofbetweeninflation

+3%andinflation+6%overthemediumandlongerterm.ForMrCayzer-

Colvin,theRemunerationCommitteebelievesthatasignificantproportion

ofhisvariablepayshouldbeweightedtowardstheannualisedtotalreturn

performance of the Funds pool of capital for which he is responsible and

hasthereforedeterminedthat60%ofhisperformancesharescheme

awardsshouldbetestedbyreferencetothis.

Thetargetsforeachcomponentofthelong-termincentiveplanshave

beensetbytheRemunerationCommitteewiththeaimofdelivering

increasingrewardforgreateroutperformance.TheRemunerationCommittee

keepstheseunderreviewandmayadjustthemeasuresandlevelsatwhich

incremental and maximum entitlements are earned in order to ensure that

they remain sufficiently challenging and aligned with the company’s strategy

andkeyperformanceindicators.

2. New components introduced into the new remuneration policy

Therearenonewcomponentsincludedintheabovepolicytablewhich

werenotapartoftheremunerationpolicypreviouslyoperatedfor

executivedirectorsbythecompany.

3. Changes to components included in the previous remuneration policy

 Theonlysubstantivechangetothecompany’spreviousremunerationpolicy

isthemovetouseCPIHinplaceofRPIastheinflationbenchmarkforannual

bonuspurposes,whichwillbephasedinoverthecourseofthethreeyear

remunerationpolicyperiod.Flexibilitytodeterminethemethodbywhich

dividendequivalentsarecalculatedhasalsobeenincluded.Minorchanges

havebeenmadetothewordingofthepolicytoreflectevolvingmarket

trendsandimprovetheclarityofoperation.

4. How the remuneration policy for executive directors relates to

remuneration of Caledonia group employees generally

 Caledoniaappliesasimilarrewardphilosophyforgroupemployees.

Executivedirectors’remunerationpackagestendtobehigherthanthose

ofotheremployees,butalsoincludeahigherproportionofvariablepay.

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Directors’ remuneration report (continued)

Remuneration policy

Chair and non-executive directors

ThetablebelowsetsouteachcomponentoftheChair’sandthenon-executivedirectors’remunerationandtheapproachtaken

bythecompanyinrelationthereto.

Component Approach

Chair’sandnon-executive

directors’ fees

TheChair’sfeeisdeterminedbytheRemunerationCommitteeandthenon-executivedirectors’fees

aresetbytheboard(excludingthenon-executivedirectors).Thesearereviewedperiodicallytaking

intoaccounttheresponsibilitiesandtimecommitmentsrequiredandnon-executivedirectorfee

levelsgenerally.

TheChairreceivesanannualfee,whichincludestheirbasicnon-executivedirector’sfee,butdoes

notreceiveanyotherremuneration.

Non-executivedirectorsreceivebasicfees,whicharesubjecttoanaggregateannuallimitfornon-

executivedirectors’ordinaryremunerationcontainedinthearticlesofassociation,currently£600,000.

Inaddition,specialfeesarepaidtothechairandmembersoftheAuditandRiskandRemuneration

CommitteesandalsofortheroleofSeniorIndependentNon-ExecutiveDirectorandChairofthe

GovernanceCommittee.Additionalfeesmaybepayableforotheradditionalboardresponsibilities

and/ortimecommitment.

Additional fees payable

forservicestoother

group companies

Exceptionally,non-executivedirectorsmayreceivefeesinconnectionwithsubsidiaryandinvestee

companiesforservicesprovidedtothem.Feesforservicesprovidedtosuchcompaniesaresetand

reviewedbytheboardsofthosecompanies,butwillnotexceed£100,000perannuminaggregate

foranynon-executivedirector.

Otherbenefits TheChairandthenon-executivedirectorsareallcoveredunderthecompany’sdirectors’andofficers’

liabilityinsurancepolicyandhavethebenefitofanindemnityunderthecompany’sarticlesofassociation.

TheChairisalsoprovidedwithanofficeandsecretarialsupport.

Thecompanymay,whereappropriate,payforthecostofspousesorpartnersaccompanyingnon-

executivedirectorsontripswherethereisabusinessreasonfordoingsoandreimbursenon-executive

directorsforhotelaccommodationandtravelexpenses(ineachcaseincludingpaymentofany

taxthereon).

Remuneration policy for new appointments

Executive directors

Inthecaseoftheappointmentofanewexecutivedirector,

the Remuneration Committee would typically seek to align the

remunerationpackagewiththeaboveremunerationpolicy.

TheRemunerationCommitteehoweverretainsthediscretionto

make special remuneration commitments on the appointment of

anewexecutivedirector,includingtheuseofawardsmadeunder

Rule9.4.2oftheListingRules,ifsuchwerenecessarytoensure

therecruitmentofacandidate.Indoingso,theRemuneration

Committeewouldtakeintoconsiderationallrelevantfactors,

including,butnotlimitedto,overallquantum,typeofremuneration

offered and comparability with the packages of other Caledonia

seniorexecutivesandthetotalvariablepaywouldnotexceed

themaximastatedinthepolicytableforexecutivedirector

remunerationabove.

The Remuneration Committee may in addition make bonus

commitments or share awards on the appointment of an external

candidate to compensate for remuneration arrangements forfeited

orforegoneonleavingapreviousemployer,takingintoaccount

factors such as any performance conditions attached to these

awards,theforminwhichtheyweregranted,forexamplecashor

shares,andthetimeoverwhichtheywouldhavevested.Theaim

would be to ensure that replacement awards would be made on

nogreaterthanacomparablebasis.

Inordertoattractandretainsuitableexecutives,theRemuneration

Committeeretainsdiscretion,inexceptionalcircumstances,

toofferservicecontractswithuptoaninitial24monthnotice

period,whichthenreducesto12monthsattheendofthisinitial

period.Ifitconsidersitappropriate,theRemunerationCommittee

mayalsoofferalowersalaryinitially,butwithaseriesofincreases

toachievethedesiredsalarypositioningoveraperiodoftime,as

theindividualdevelopsintotherole.

Ifanewappointmentistheresultofaninternalpromotion,the

Remuneration Committee would expect to honour any pre-existing

contractual arrangements or benefits package agreed with the

relevantindividual.Intheeventthatanewdirectorneedsto

relocatetotakeuptherole,theRemunerationCommittee

may agree a reasonable relocation package and tax

equalisationarrangements.

Inrecruitinganynewexecutivedirector,theRemuneration

Committeewouldapplytheoverallpolicyobjectivethatexecutive

directors’remunerationshouldbecompetitive,butnotexcessive.

IntheeventthattheRemunerationCommitteedeterminesthatitis

necessary for special commitments or sign-on arrangements to be

offeredtosecuretherecruitmentofanewexecutivedirector,an

explanation of why these are required and details thereof would

beannouncedatthetimeofappointment.

96 Caledonia Investments plc Annual Report 2024

Chair and non-executive directors

TermsfortheappointmentofanynewChairornon-executive

director would also be determined by the Remuneration

Committeeortheboardwithintheaboveremunerationpolicy.

Executive directors’ service contracts and the Chair’s and

non-executive directors’ letters of appointment

Executive directors

ExecutivedirectorshaveservicecontractswithCaledoniaGroup

ServicesLtd,awholly-ownedsubsidiaryofthecompany,details

ofwhicharesummarisedbelow:

Date of

contract

Notice period

for company

and director Unexpired term

MSDMasters 15May2008 12months 12months

RWMemmott 22May2023 12months 12months

JMBCayzer-Colvin 19Apr2005 12months 12months

Ifnoticeisservedbyeitherparty,thedirectorcancontinue

toreceivebasicsalary,benefitsandpensionpaymentsforthe

durationofthenoticeperiod,duringwhichtimethecompany

mayrequiretheindividualtocontinuetofulfiltheircurrentduties

ormayassignaperiodofgardeningleave.Alternatively,the

companymay,initsdiscretion,terminatethecontractwithout

noticeandmakealumpsumpaymentinlieuofnotice.Thislump

sumwouldincludeanamountequivalenttothebasicsalaryand

benefits (based on a fixed percentage of salary specified in the

servicecontract)fortheunexpiredperiodofnoticetowhichthe

paymentrelates.MrMasters’andMrCayzer-Colvin’sservice

contractsprovidethatanamountequivalentto80%oftheaverage

oftheannualbonusespaidforthepreviousthreefinancialyears

wouldalsobeincludedinthepaymentinlieuofnotice.MrMasters’

andMrCayzer-Colvin’sservicecontractsalsoincludeprovisions

wherebyaliquidatedsumispayableintheeventoftermination

withinoneyearfollowingachangeofcontrol.Thepaymentwould

becalculatedonthesamebasisasapaymentinlieuofnotice,

exceptthatanamountequivalentto100%oftheaverageofthe

annualbonusespaidforthepreviousthreefinancialyearswould

beincluded.

MrMemmott’sservicecontractcontainsprovisionswhereby,

asanalternativetothepaymentofalumpsuminlieuofnotice,

thecompanymayelecttopaytheequivalentamountinequal

monthlyinstalments,suchinstalmentstobereducedby50%of

one-twelfthofthebasicsalaryinexcessof£20,000perannumthat

MrMemmottreceivesfromanyalternativeemploymentthathe

takesupduringthenoticeperiod.

Executivedirectors’servicecontractsmaybeterminatedwithout

notice and without any further payment (other than in respect of

amountsdueatthedateoftermination)ontheoccurrenceof

certaineventssuchasgrossmisconduct.

Chair and non-executive directors

TheChairandthenon-executivedirectorsdonothaveservice

contracts,butareappointedunderlettersofappointment,

whichprovideforterminationwithoutnoticeorcompensation.

Inspection

Executivedirectors’servicecontractsandtheChair’sand

non-executivedirectors’lettersofappointmentareavailable

forinspectionattheregisteredofficeofthecompany.

Policy on external non-executive directorships held by

executive directors

Itisthecompany’spolicytoallowexecutivedirectorstohold

non-executivedirectorshipsunrelatedtothecompany’sbusiness

tobroadentheircommercialexperience,providedthatthetime

requiredisnotmaterial.Normallythecompanywillretainanyfees

arisingfromsuchnon-executivedirectorships,butmaypermitthe

executivedirectortoretainfeesonacase-by-casebasis.

Policy on payments for loss of office

Executive directors

Itisthepolicyofthecompanythat,otherthaninexceptional

circumstancesonrecruitmentasstatedabove,noexecutive

directorshouldbeofferedaservicecontractthatrequiresmore

thanoneyear’snoticeofterminationorwhichcontainsprovision

for predetermined compensation in excess of one year’s total

emoluments.Intheeventofatermination,theRemuneration

Committee will consider a director’s past performance and the

circumstances of the departure in exercising any discretions relating

tothearrangementsforlossofoffice,includingcontractual

obligations,prevailingbestpractice,thereasonforthedeparture

andanytransitionorhandoverrequired.

Theterminationprovisionsinexecutivedirectors’currentservice

contractsaredescribedaboveinthesectiononexecutivedirectors’

servicecontracts.ItistheRemunerationCommittee’sintentionthat

allfutureexecutivedirectors’servicecontractsshouldinclude

provisionsenablingthecompanytoreducecompensationpayments

intheeventthatthedirectortakesupalternativeemploymentwithin

thenoticeperiod.However,ifanewdirectorisappointedinternally,

the Remuneration Committee would expect to honour any existing

contractualarrangementsagreedwiththerelevantindividualbefore

heorshebecomesadirector.

In applying the company’s right to make a lump sum payment

inlieuofnotice,theRemunerationCommitteewouldnormally

expect to prorate the lump sum for the unexpired period of

noticetowhichthepaymentrelates.

Thecompany’sannualbonusschemeprovidesthatanemployee

must be in the group’s employment and not under notice of

termination(eithergivenorreceived)inordertobeentitledto

receiveabonusfortherelevantfinancialyear.TheRemuneration

Committeewouldexpecttoapplythisprincipletoexecutive

directorterminations,butretainsdiscretiontomakebonus

paymentsonterminationifitbelievesitappropriatetodoso.

Ifanybonuspaymentismade,theRemunerationCommittee

also retains discretion as to whether it will require any part of the

bonustobedeferredintosharesunderthedeferredbonusplan.

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Directors’ remuneration report (continued)

Remuneration policy

Executivedirectorswouldalsobeentitledundertheirservice

contractstobepaidonterminationforanyaccrued,butuntaken,

holidayentitlement.TheRemunerationCommitteemay,where

itconsidersitappropriateinthecircumstances,makepayments

forlossofstatutoryrightsorwaiverthereofandacontribution

towardslegalandoutplacementfees.TheRemuneration

Committee may also make a payment to ensure that any

restrictivecovenantsremainenforceable.

Wherethedirectorholdsunvestedawardsunderthecompany’s

long-termincentiveschemes,theRemunerationCommitteemay

exerciseitsdiscretionsastovestinginaccordancewiththerelevant

schemerules.Ingoodleavercircumstances,forexamplewhere

cessationofemploymentisbyreasonofdeath,retirement,injury,

disability,ill-health,redundancy,orsuchotherreasonasthe

RemunerationCommitteemaydecide,theRemuneration

Committeewillnormallydeterminethelevelofvestingbasedon

theattainmentoftheperformancetargets,eitheratthetimeof

cessation or at the normal test date if permitted by the scheme

rules,butinthecaseoftheformermaydecreaseorincreasethe

levelofvestingiftheRemunerationCommitteeconsidersthatthe

targetswouldhavebeenmettoalesserorgreaterextentatthe

endoftheperformanceperiod.Thenumberofsharesthatvestwill

normally be reduced to reflect the proportion of the performance

periodthatthedirectorwasinemployment,althoughthe

Remuneration Committee has discretion not to scale down the

numberofsharesifitbelievesitappropriateinthecircumstances.

The Remuneration Committee has the discretion to assess good

leavertreatmentforparticipantsshouldcircumstanceschange

afterthedatetheyleavebutpriortovesting.Anyholdingperiod

willcontinuetoapplyinrespectofsharesheldbyaleaver,

unlessotherwisedeterminedbytheRemunerationCommittee.

Wherethedirectorholdsunvestedawardsunderthecompany’s

deferredbonusplan,theRemunerationCommitteemay

exerciseitsdiscretionastovestinginaccordancewiththe

relevantschemerules.Ingoodleavercircumstances,

awardswillvestonleavingemployment.

Followingtermination,thecompanymaycontinueinsurancerelated

benefits for the former employee until the end of the insurance

policyperiod.Thecompany’sdirectors’andofficers’liability

insurancepolicyalsoprovidesforasix-yearperiodofrun-off

coverforformerdirectors.Adirectormayremaininemployment

after ceasing to be a director for a limited period to allow time for

aneffectivehandoverorforasuccessortobeappointed.

Intheeventofachangeofcontrolbeforetheexpiryofthe

performancemeasurementperiodofalong-termincentive

award,thevestingleveloftheawardwillbedeterminedbythe

Remuneration Committee based on the extent to which the

Remuneration Committee considers that the performance targets

havebeenachievedandvestedshareswillthenbescaleddown

toreflecttheshortenedmeasurementperiod.TheRemuneration

Committeemaymodifysuchvestinglevelsifitconsidersthatthe

performance target would be met to a greater or lesser degree at

the testing date and/or if the application of time prorating would

beinappropriateinthecircumstances.

Chair and non-executive directors

TheChairandthenon-executivedirectorshavenoentitlementto

anycompensationonterminationoftheirappointments,although

theywouldhavethebenefitofrun-offcoverunderthedirectors’

andofficers’liabilityinsurancepolicyasdescribedabove.However,

inappropriatecircumstancestheymayreceivedeminimis

retirementgiftsfromthecompany.

Executive directors’ minimum shareholding guidelines

Inordertoaligntheinterestsofexecutivedirectorswiththoseof

shareholders,theRemunerationCommitteehasadoptedguidelines

forminimumshareholdings,whichexecutivedirectorswillbe

expected to attain through the retention of all post-tax share awards

vestingunderthecompany’slong-termincentiveplansuntilthe

minimumshareholdingismet.Forthesepurposes,shareholdings

includethoseofconnectedpersonsandalsothevalue,netofany

exercisecosts,incometaxandNationalInsurancecontributions,of

unexercised awards granted under its performance share scheme

forwhichtheperformancetargetshavebeenmet.Alsoincludedare

bonuses deferred compulsorily under the company’s deferred bonus

plan,againnetofincometaxandNationalInsurancecontributions.

Inaddition,executivedirectorsaresubjecttoapost-cessation

shareholdingrequirementoftwoyears,withtheCommittee

retainingdiscretiontooverridethisarrangement,forexample,

forregulatoryreasons,oncompassionategroundsorwherean

executiveexperiencesfinancialhardship.

FortheChiefExecutiveOfficer,theminimumguidelineshareholding

hasbeensetat200%ofbasicsalaryandforotherexecutive

directors150%ofbasicsalary.

98 Caledonia Investments plc Annual Report 2024

Thefollowingreportsetsoutdetailsandexplanationsofremunerationpaidtodirectorsoverthefinancialyearto31March2024and

describeshowCaledonia’sremunerationpolicywillbeimplementedforthe2025financialyear.

Single total figure of remuneration for each director (audited)

Executive directors

Thetablebelowprovidesananalysisoftotalremunerationofeachexecutivedirectorforthefinancialyearended31March2024anda

comparisonwiththepreviousfinancialyear.

MSDMasters

RWMemmott

JMBCayzer-Colvin TJLivett

W P Wyatt

2024

£’000

2023

£’000

2024

£’000

2023

£’000

2024

£’000

2023

£’000

2024

£’000

2023

£’000

2024

£’000

2023

£’000

Fixed remuneration and

benefits

Salary 473 450 245 n/a 385 367 171 410 n/a 176

Taxable benefits

25 17 4 n/a 29 28 5 8 n/a 6

Pension related benefits 63 59 32 n/a 51 48 23 54 n/a 23

Total fixed remuneration 561 526 281 n/a 465 442 198 472 n/a 205

Variable remuneration

Short-termincentives

338 203 175 n/a 234 176 153 185 n/a –

Long-termincentives

453 521 - n/a 647 715 650 275 594 949

Totalvariableremuneration 791 724 175 n/a 881 891 804 460 594 949

Total 1,351 1,250 456 n/a 1,346 1,333 1,002 932 594 1,154

Duetorounding,individualcolumnsdonotnecessarilyadduptothetotal.

a. MatMasterswasappointedtotheboardasChiefExecutiveOfficerdesignateon1April2022.HesucceededWillWyatton27July2022.

b. RobMemmottwasappointedtotheboardasChiefFinancialOfficeron1September2023.

c. TimLivettceasedtobeadirectoron1September2023andleftemploymenton31October2023.Salaryandbenefitshereceivedfortheperiod1

September2023to31October2023areexcludedfromthetableaboveandarereportedin‘Paymentstopastexecutivedirectors’onpage102.

d. WillWyattceasedtobeanexecutivedirectoron27July2022.Thefiguresrelatingtolong-termincentivesreflectcertainawardsheretainedfromhis

employment.Thefeeshereceivedasanon-executivedirectorafterthatdateareexcludedfromthetableaboveandareshowninthetableofnon-

executivedirectorfeesonpage101.

1. Taxable benefits

Taxablebenefitsprincipallycomprisedprivatemedicalinsurancecover,a

small Christmas supplement paid to all Caledonia’s employees and

business-related expense reimbursements deemed to be taxable by

HMRC.ThetaxablebenefitsforMatMastersandJamieCayzer-Colvinalso

includedlegacycashallowancesof£7,776and£15,024respectivelyinlieu

ofacompanycar.

Inadditiontotaxablebenefits,othernon-taxablebenefitswereprovided

toexecutivedirectors,includingdeath-in-serviceinsurance(4xbasic

salary),permanenthealthandincomeprotectioninsurance,directors’

andofficers’liabilityinsuranceandcertainotherbenefitsofminorvalue

providedtoallofCaledonia’semployees.

2. Short-term incentives

Bonus metrics

ForMatMasters,RobMemmottandTimLivett,amaximumof50%of

bonuswasdeterminedbyreferencetocompanyperformanceand50%by

referencetoindividualperformanceobjectives.ForJamieCayzer-Colvin,

whohasspecificresponsibilityfortheFundspool,25%ofhisbonuswas

determinedbyreferencetothecompany’sperformance,25%tohispool’s

performance,35%tohispool’sobjectivesand15%toindividual

performanceobjectives.

Company performance

Forthe2024financialyear,thecompanyperformanceelementwas

determinedbyreferencetotherelativeperformanceofthecompany’sNAVTR

againstinflation,whichforbonuspurposeswastakenas3%,oractualinflation

ifgreater(weighted67:33onRPI:CPIH),withbonuspaymentsforthiselement

commencingwitha10%pay-outifthecompany’sNAVTRmatchedinflation,

increasing incrementally to the maximum entitlement payable if

outperformanceof7%ormorewasachieved.Thecompany’sNAVTRwas7.4%

overtheyearagainstanincreaseininflation(forbonuspurposes)of4.1%,

givinga43%paymentforthiselement.

Funds performance

JamieCayzer-Colvin’spoolperformancewasassessedbyreferencetothe

returnachievedbytheFundspoolovertheyearonaconstantcurrency

basis,withpaymentscommencingonachievementofatotalreturnof6%,

risingtoamaximumpay-outagainstatotalreturnof13.5%.

TheFundspool’sreturnovertheyearwasbelowthisthresholdandtherefore

therewasnopaymentforthiselement.

Funds pool objectives

InassessingJamie

Cayzer-Colvin

’sachievementofhispoolobjectives,

theCommitteetookaccountof:

• improvedreporting,particularlywithrespecttoassetvaluations

• assessment of secondary market opportunities

• engagement with general and limited partners

• developmentofportfoliomanagementprocesses.

ItwasconcludedthatJamieCayzer-Colvinshouldbeawardedabonusof

35%ofsalaryforattainmentofpoolobjectives.

Individual performance objectives

TheCommitteeassessedperformanceagainsttheindividualobjectives

whichincludedthefollowing:

Name Objective

MSDMasters Developmentofinvestorrelationsstrategy,

embeddingresponsibleinvestment,successful

transitiontonewERPsystem,teamdevelopment

initiatives

RWMemmott Asabove,togetherwithimprovementsto

managementinformation,developmentofrisk

reporting,implementationofcorporate

simplificationopportunities,cybersecurity

developments

TJLivett Asabove,togetherwithensuringasmooth

transition to successor

JMBCayzer-Colvin Developingtheapproachandsupporting

infrastructureforresponsibleinvestment,

enhancingCayzerHousefacilitiesforemployees,

drivingCaledonia’scharitableactivitiesand

internshipprogramme,teamdevelopment

initiatives

TheCommitteedecidedtoawardthemaximumbonusforindividual

performanceforMatMasters,RobMemmottandJamieCayzer-Colvin,and

85%forTimLivett.

Directors’ remuneration report

Annual report on directors’ remuneration

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Directors’ remuneration report

Annual report on directors’ remuneration (continued)

Total bonuses

Thetotalbonusesawardedtotheexecutivedirectorsfortheyearwere

thereforedeterminedasfollows:

MSD

Masters

R W

Memmott

TJ

Livett

JMB

Cayzer-Colvin

Award

%

Max

Award

%

Max

Award

%

Max

Award

%

Max

Performance

Company 21.5 50 21.5 50 21.5 50 10.75 25

Pool n/a n/a n/a n/a n/a n/a - 25

Objectives

Pool n/a n/a n/a n/a n/a n/a 35 35

Individual 50 50 50 50 42.5 50 15 15

Total 71.5 100 71.5 100 64 100 60.75 100

Inaccordancewiththecompany’sremunerationpolicy,thefollowing

amountsincludedintheshort-termincentivesrowfor2024were

compulsorilydeferredviathedeferredbonusplanforaperiodofthree

yearsintheformofnil-costoptions:

MSD

Masters

Memmott

TJ

Livett

JMB

Cayzer-

Colvin

2024

£,000

2023

£,000

2024

£,000

2023

£,000

2024

£,000

2023

£,000

2024

£,000

2023

£,000

Compulsorily

deferred 102 - - n/a n/a

- 41 -

Cash 236 203 175 n/a 153 185 193 176

Total

338 203 175 n/a 153 185 234 176

 a. Duetorounding,individualcolumnsdonotnecessarilyaddupto

thetotal.

 b.Bonusadjustedproratatoreflecttheperiodservedasadirectorfrom1

September2023.

 c.Bonusadjustedproratatoreflectthetimeperiodservedasadirector

until1September2023anduptothedateofcessationofemploymenton

31October2023.

 d.Consistentwiththeremunerationpolicy,asTimLivetthadceasedtobe

anemployeebythetimethebonuswaspaid,theprorataamountdue

waspaidincash.

3. Long-term incentives

Thelong-termincentiveawardsforwhichperformancemeasurement

periods ended during the year were the two-thirds of the awards granted in

2019undertheperformanceshareschemeandone-thirdoftheawards

grantedunderthatschemein2021.Allsuchawardswerenil-costoptions.

The performance measures and outturn following testing for the awards

madetotheexecutivedirectorswere:

Year of

award

Performance

measure

%of

award

Performance

outturn% %vested

MSDMasters 2019 NAVTR

20 10.9 100

Capital

portfolio TR

80 12.9 100

2021 NAVTR

20 13.1 100

Capital

portfolio TR

53.3 10.4 94

Income

portfolio TR

26.7 5.8 76

TJLivett

2019 NAVTR

100 10.9 100

2021 NAVTR

100 13.1 100

W P Wyatt

2019 NAVTR

100 10.9 100

2021 NAVTR

100 13.1 100

JMB

Cayzer-Colvin

2019 NAVTR

40 10.9 100

Funds pool

60 16.0 100

2021 NAVTR

20 13.1 100

Funds pool

60 14.8 100

a. Vestingonagraduatedbasis,commencingat10%onachievementof

anannualisedNAVTRof3%,risingincrementallyto100%vestingonan

annualisedNAVTRof10%overfiveyearsforthe2019awardsandover

threeyearsforthe2021awards.

b. Vestingonagraduatedbasis,commencingat10%onachievementof

anannualisedtotalreturnof4%,risingincrementallyto100%vesting

onachievementofanannualisedtotalreturnof11%overfiveyearsfor

the2019awardsandthreeyearsforthe2021awards.The

performancemetricexcludedPolarCapitalwhich,ifincluded,

decreasedtheoutturnforthe2019and2021awardsto12.7%and

9.7%respectively.

c. Vestingonagraduatedbasis,commencingat10%onachievementof

anannualisedtotalreturnof3.5%,risingincrementallyto100%vesting

onachievementofanannualisedtotalreturnof7%overthreeyears.

d. Vestingonagraduatedvestingbasis,commencingat10%on

achievementofanannualisedtotalreturnof6%,risingincrementallyto

100%vestingonachievementofanannualisedtotalreturnof13.5%

overfiveyearsforthe2019awardsandoverthreeyearsforthe2021

awards.Theperformancemetricforthe2019awardwasmeasuredon

aSterlingbasis(16.3%basedonconstantcurrency)andforthe2021

awardsonaconstantcurrencybasis(18.2%basedonSterling).

Theremainingtwo-thirdsoftheawardsgrantedin2019willveston30

May2024.Thefirstone-thirdoftheawardsgrantedin2021willveston4

June2024and,forWillWyattandJamieCayzer-Colvin,willbesubjecttoa

post-vestingholdingperiodoftwoyears.Thevalues,asreflectedinthe

2024long-termincentivesrowabove,arecalculatedusingthethree-

monthaveragesharepriceto31March2024of3320.23p,togetherwith

thevalueofdividendsthatwillhaveaccruedonthesharesatvesting.The

overallvalueofthelong-termincentivesshowninthetableaboveare

thereforeanalysedasfollows:

Estimated

valueof

long-term

incentive

awards at

vesting

£

Value of

dividend

equivalents

atvesting

£

Estimated

total

atvesting

£

MSDMasters 398,760 54,132 452,892

TJLivett

572,042 78,426 650,469

JMBCayzer-Colvin 569,253 77,758 647,012

W P Wyatt 520,878 72,995 593,873

a. Entitlementsproratatoreflectthetimeperiodserved.

 b.Duetorounding,individualrowsdonotnecessarilyadduptothe

total.

Theestimatedvalueattributabletosharepriceappreciationsincegrantin

2019and2021,basedonthethree-monthaveragesharepriceto31March

2024,forMatMasters,TimLivett,JamieCayzer-ColvinandWillWyattwas

£41,149,£60,253,£59,506and£57,377respectively.Nodiscretionwas

exercised by the Remuneration Committee in respect of share price

appreciation.

TheCommitteewassatisfiedthatnowindfallgainshavearisenin

connectionwiththevestingoftheperformanceshareawardsgrantedin

2019and2021,takingintoaccountthesharepriceatthetimeofgrantand

progressioninthesharepriceovertheperiodrelativetoNAVTRandtypical

marketreturns.

100 Caledonia Investments plc Annual Report 2024

The2023figuresshowninthelong-termincentivesandtotalrowsonpage

99havebeenrestatedtoreplaceestimatedvaluesforperformanceshare

schemeawardsincludedinlastyear’sreport.Theestimatedvalues,which

includeddividendequivalents,were£538,916forMatMasters,£284,218

forTimLivett,£739,708forJamieCayzer-Colvinand£981,055forWill

Wyatt.Therestatedfigures,whichreflectthevaluesonthevestingdates,

areasfollows:

Value of

long-term

incentive

awards at

vesting

£

Value of

dividend

equivalents

atvesting

£

Totalvalue

atvesting

£

MSDMasters 461,852

59,423 521,275

TJLivett 248,248

26,943 275,191

JMBCayzer-Colvin 632,983

82,454 715,437

W P Wyatt 838,493

110,313 948,806

a. 8,170sharesgrantedin2018vestedon30May2023.Themidclosing

pricewas3400ppershare.5,398sharesgrantedin2020vestedon4

August2023.Themidclosingpricewas3410ppershare.

b. 7,280sharesgrantedin2020vestedon4August2023.Themidclosing

pricewas3410ppershare.

c. 12,088sharesgrantedin2018vestedon30May2023.Themidclosing

pricewas3400ppershare.6,510sharesgrantedin2020vestedon4

August2023.Themidclosingpricewas3410ppershare.

d. 16,969sharesgrantedin2018vestedon30May2023.Themidclosing

pricewas3400ppershare.7,670sharesgrantedin2020vestedon4

August2023.Themidclosingpricewas3410ppershare.

Chair and non-executive directors

FeesandotherremunerationpaidtotheChairandthenon-executive

directorsduringtheyearended31March2024andthepreviousyearwere

asfollows:

Fees

Taxable

expenses

Total

2024

£’000

2023

£’000

2024

£’000

2023

£’000

2024

£’000

2023

£’000

D C Stewart 165 165 -

- 165 165

SJBridges

14 48 3 - 18 48

F A Buckley

49 1 -

- 49 1

Hon C W Cayzer

52 50 - - 52 50

GBDavison 56 54 - - 56 54

MAFarlow 58 55 - - 58 55

CLFitzalanHoward 49 47 - - 49 47

LRFordham 57 53 - -

57 53

W P Wyatt

47 30 3 - 50 30

1.StuartBridgesretiredasadirectoron19July2023.

2.FarahBuckleywasappointedasadirectoron28March2023.

3.TheHonCWCayzerreceivedanadditionalfeeof£5,000perannumin

respectofhisservicesasatrusteeoftheCaledoniaPensionScheme.

4.WillWyattbecameanon-executivedirectoron27July2022.Thistable

reflectsthefeereceivedinrespectofhisnon-executiveroleafterthat

date.

5.Taxableexpensesincludeexpensereimbursementsrelatingtotravel,

accommodation and subsistence in connection with board and committee

attendanceduringtheyear,whicharedeemedbyHMRCtobetaxablein

theUK.Amountsarethevalueoftheexpenseplusthegrossed-uptaxpaid

bythecompany.Non-taxableexpensereimbursementshavenotbeen

includedinthetable.

6.DavidStewartincurredtaxableexpensesduring2024atatotalcost,

includingtax,of£476.

7.FarahBuckleyincurredtaxableexpenseduring2024atatotalcost,

 includingtax,of£187.

8.LynnFordhamincurredataxableexpenseduring2023atatotalcost,

 includingtax,of£313.

9.Duetorounding,amountsstateddonotnecessarilyadduptothetotal

column.

TheChairandthenon-executivedirectorsdidnotreceiveany

taxablebenefits,short-termincentives,long-termincentives

orpensionrelatedbenefits.

Total pension entitlements (audited)

Defined contribution

Pensionbenefitspaidtoexecutivedirectorsduringtheyear,either

as contributions to personal pension arrangements or as cash

supplements,wereasfollows:

Pension

contribution Cash supplement Total

2024

£

2023

£

2024

£

2023

£

2024

£

2023

£

MSDMasters 7,383 2,813 55,793 56,494 63,176 59,307

RWMemmott

- n/a 32,294 n/a 32,294 n/a

TJLivett

- - 22,518 53,700 22,518 53,700

JMBCayzer-

Colvin - - 50,747 48,002 50,747 48,002

1. RobMemmottwasappointedasadirectoron1September2023.

2. TimLivettretiredfromtheboardon1September2023andleft

employmenton31October2023.Pensionamountsreceivedforthe

period1September2023to31October2023areexcludedfromthetable

aboveandarereportedinPaymentstopastexecutivedirectorsonpage

102.

Defined benefit

On26April2017,TheHonCWCayzerreachedhisretirementage

of60andnowreceivesanannualpensionundertheCaledonia

PensionScheme,afinalsalarydefinedbenefitscheme.

101

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Scheme interests awarded during the financial year (audited)

Thetablebelowsetsouttheawardsmadetoeachexecutivedirectorduringtheyearundertheperformancesharescheme.Nodeferred

bonusplanawardsweremade.

Scheme Type of award Basis of award

Date of

grant

Face

valueof

award

£’000

price at

grant

comprised

in award

number

Receivableif

minimum

performance

achieved

End of

performance

period

M S D Masters

Performance share scheme Nil-cost option 150%ofsalary 30.05.23 709 3445p 20,573 10% 31.03.28

R W Memmott

Performance share scheme Nil-cost option 150%ofsalary 24.11.23 630 3585p 17,573 10% 31.03.28

J M B Cayzer-Colvin

Performance share scheme Nil-cost option 150%ofsalary 30.05.23 577 3445p 16,763 10% 31.03.28

1. Thenumberofsharescomprisedintheawardsundertheperformanceshareschemewasdeterminedbyreferencetothecompany’ssharepriceatthetime

thattheawardsweremade.

2. Theperformancetargetsforawardsundertheperformanceshareschemearesetoutunderthestatementofdirectors’shareschemeinterestsonpage

100.

3. One-thirdoftheawardsundertheperformanceshareschemearesubjecttoperformancetestingat31March2026,followedbyatwo-yearholdingperiod,

withtheremainingtwo-thirdssubjecttoperformancetestingat31March2028.

External directorships

The table below sets out details of external directorships held by

executivedirectorswhereithadbeenagreedthattheycouldretain

thefeesarisingtherefrom.

Fees

Name Position

2024

£’000

2023

£’000

TJLivett Non-executivedirector,

PremierMarinasHoldings

15.5 37.5

Non-executivedirector,

Worldwide Healthcare Trust

17 20

1. Feesreceivedinrespectofperiodfrom1April2023to1September2023.

Payments to past executive directors (audited)

W P Wyatt

WillWyattretiredasCaledonia’sChiefExecutiveandceased

employmentwiththeCaledoniagroupon27July2022.He

continuestoserveontheboardasanon-independentnon-

executivedirector.

Willexercisedallofthevested2018performancesharescheme

awardover16,969shareson26September2023andallofthe

vested2020performanceshareschemeawardover7,670shares

on26January2024.Theawardsweresubjecttoperformance

testingasat31March2023andvestedinMayandAugust2023

respectively.Thetotalpre-taxvaluewas£960,618,including

dividendequivalentsof£111,765.

Will’s pro rata entitlements to performance share scheme awards

madein2019and2021weresubjecttoperformancetestingon

31March2024,ofwhich12,062sharesand3,626sharesvested

respectively.Asheremainsadirector,thedetailsarereportedin

thesingletotalfigureofremunerationtableonpage99.

In line with Caledonia’s post-cessation shareholding

requirements,Willcontinuestoholdtheminimum

guidelineshareholding.

T J Livett

Aspreviouslyreported,inNovember2022,TimLivettadvisedthe

boardofhisintentiontoretireasChiefFinancialOfficerandleave

thecompany’semploymentoncehissuccessorjoinedtheboard.

Hewasemployedunderaserviceagreementdated14November

2018whichprovidedfora12monthnoticeperiod.Timstepped

downfromtheboardon1September2023andceased

employmentwiththegroupon31October2023.Hereceived

salaryandbenefits(includingpension)of£78,401inrespectof

thistwomonthperiodduringwhichhecompletedahandoverto

RobMemmott.Hewaivedanyentitlementtopaymentinlieuof

noticefortheperiodfrom1to21November2023andwasnot

grantedaperformanceshareschemeawardin2023.

Tim retained an entitlement to a pro rata bonus to reflect his

employmentduringthe2024financialyear,which,assessedin

theusualway,resultedinapaymentof£153,067,representing

64%ofhistotalbonusopportunity,asreflectedinthesingle

figuretableonpage99.

Timexercisedallofthevested2020performancesharescheme

awardover7,280shareson18September2023.Theawardwas

subjecttoperformancetestingasat31March2023andvestedin

August2023,atatotalpre-taxvalueof£283,199,including

£26,943inrespectofdividendequivalents.

Share awards made under the performance share scheme

outstandingon31October2023continueandarecapableof

vestingonthescheduledvestingdates,subjecttotheirapplicable

performanceconditions,buthavebeenreducedtoreflect

the proportion of such performance period that Tim was in

employment.Hisvestedandunvestedperformanceshare

schemeawardspre-andpost-reduction,areshowninthe

tablebelow.

Date of grant

Number of shares

pre-reduction

Number of shares

post-reduction

30.05.19 12,887 11,813

04.08.20 14,561 10,435

04.06.21 18,868 11,915

30.05.22 16,444 6,365

Total 62,760 40,528

Directors’ remuneration report (continued)

Annual report on directors’ remuneration

102 Caledonia Investments plc Annual Report 2024

The two-year holding period will continue to apply to the portion

ofperformanceshareschemeawardsgrantedin2020,2021and

2022thataresubjecttothree-yearperformance.

Inaccordancewiththeremunerationpolicy,Tim’sawardsunder

thedeferredbonusplan,beingcompulsorilygrantedin2021and

2022over4,956sharesand5,217sharesrespectively,vestedin

fullonhisretirementdate.Timexercisedtheseoptionson30

November2023,atatotalpre-taxvalueof£395,026,including

£32,613inrespectofdividendequivalents.

AnyamountsreceivedbyTiminrespectoffutureexercisesof

performanceshareschemeawards,willbedisclosedinthe

Annual report on directors’ remuneration for the year in which

thereceiptsoccur.

In line with Caledonia’s post-cessation shareholding

requirements,Timwillholdanysharesacquiredfollowingthe

exercise of share awards (net of any sales to meet the tax

liabilitiesdue)untiltheminimumshareholdingguidelineof150%

ofhissalaryonleavinghasbeenmetforthetwoyearsfollowing

hisretirementdate.Atdateofcessation,Timheldsharestothe

valueof£0.4m,representing67%attainmentoftheguideline.

Asat31March2024,theguidelinehadbeenmetinfull.

S A King

StephenKing,formerlyCaledonia’sFinanceDirector,ceased

employment with the Caledonia group and resigned from the

boardon30November2018.Heexercisedallofthevested

2018performanceshareschemeawardover1,908shareson

25September2023.Theawardwassubjecttoperformance

testingasat31March2023andvestedinMay2023,atatotal

pre-taxvalueof£75,324,including£9,212inrespectof

dividendequivalents.

Payments for loss of office (audited)

TimLivettsteppeddownfromtheboardon1September

2023 and ceased employment with the Caledonia group on

31October2023.

Treatmentofhispaymentinlieuofnotice,bonusandshare

awardsisdescribedunder‘Paymentstopastexecutive

directors’above.

There were no other payments made for loss of office during

theyear.

Statement of directors’ shareholdings and scheme

interests (audited)

Executive directors’ minimum shareholding guidelines

Executivedirectors’minimumshareholdingguidelinesareset

outonpage98.MatMastersandJamieCayzer-Colvinhave

attainedtheminimumguidelineshareholdingasat31March

2024.RobMemmott,whojoinedthecompanyon1September

2023,hasbeguntomeettheguidelines.Thevaluesofthe

relevantshareholdingsofeachexecutivedirectorasat31March

2024,calculatedbyreferencetoCaledonia’sclosingshareprice

onthatdateof3280p,andthepercentagelevelbywhichthe

valueoftheminimumguidelineshareholdinghasbeenachieved

wereasfollows:

Value of

shareholding

£m

Attainment

of guideline

%

MSDMasters 2.3 240

RWMemmott 0.1 15

JMBCayzer-Colvin 8.6 1,496

1. Shareholdingsincludethoseofconnectedpersons;thevalue,netofany

exercisecosts,incometaxandNationalInsurancecontributions,of

unexercised awards granted under the performance share scheme for

whichtheperformancetargetshavebeenmet;andbonusesdeferred

compulsorily under the company’s deferred bonus plan net of income tax

andNationalInsurancecontributions.

Directors’ shareholdings

Theinterestsofthedirectorswhoservedduringtheyearandtheir

connected persons in the ordinary share capital of the company as

at31March2024(ordateofcessationinthecaseofStuartBridges

andTimLivett)wereasfollows:

Beneficial Non-beneficial

2024

number

2023

number

2024

number

2023

number

D C Stewart 6,944 4,072 - -

MSDMasters 58,376 50,298 - -

RWMemmott

2,852 n/a - n/a

TJLivett

3,323 3,323 - -

JMBCayzer-Colvin

249,435 250,024 198,554 198,554

SJBridges

5,309 5,309 - -

F A Buckley 250 - - -

Hon C W Cayzer

41,092 41,092 15,500 15,500

GBDavison 8,100 8,100 - -

MAFarlow 2,000 2,000 - -

CLFitzalanHoward 2,000 2,000 - -

LRFordham 1,330 1,330 - -

W P Wyatt

1,224,644 1,203,005 96,705 93,705

1. RobMemmottwasappointedasadirectoron1September2023.

2. TimLivettretiredasadirectoron1September2023.

3. WillWyatt’sbeneficialinterestsincluded1,054,794shares(2023:

1,045,524shares)heldbyTheDunchurchLodgeStudCompanyand9,869

shares(2023:1,900)heldbyKnossingtonHoldingsCompany,bothprivate

familycompaniescontrolledbyMrWyattandcertainofhisconnected

persons,and1,000sharesinwhichTheHonCWCayzerhadanon-

beneficialinterest(2023:1,000shares).Hisnon-beneficialinterests

included14,500shares(2023:14,500shares)inwhichTheHonCW

Cayzeralsoheldanon-beneficialinterest.TheHonCWCayzer’sbeneficial

interestsincluded5,200shares(2023:5,200shares)inwhichMrWyatt

andMrCayzer-Colvinhadnon-beneficialinterests.

4. StuartBridgesretiredasadirectoron19July2023.

Therehavebeennochangesinthedirectors’interestsshown

abovenotifieduptothedateofthisreport.

103

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Directors’ remuneration report (continued)

Annual report on directors’ remuneration

Directors’ share scheme interests

Theinterestsofdirectorsasat31March2024,orthedateofcessationofdirectorshipinthecaseofTimLivett,intheshare-basedincentive

schemesoperatedbythecompanyaresetoutinthefollowingtable.TimLivett’sshareschemeinterestsareshownbeforereductionas

describedunder‘Paymentstopastexecutivedirectors’

onpage102

Share price

at date

of award

Unvested

with

performance

conditions

1 

Unvested

without

performance

conditions

Vested

but un-

exercised

Total

MSDMasters Performance share scheme awards

Granted30.05.19(nil-cost) 2910p – 7,792 – 7,792

Granted04.08.20(nil-cost) 2640p 10,795 – – 10,795

Granted04.06.21(nil-cost) 3102.5p 9,331 4,218 – 13,549

Granted30.05.22(nil-cost) 3740p 18,048 – – 18,048

Granted30.05.23(nil-cost) 3445p 20,573 – – 20,573

Performance share scheme total 58,747 12,010 – 70,757

Deferred bonus plan – compulsory awards

Granted04.06.21(nil-cost) 3102.5p – – 4,593 4,593

Granted30.05.22(nil-cost) 3740p – 3,870 – 3,870

Deferred bonus plan total – 3,870 4,593 8,463

Total share scheme interests 58,747 15,880 4,593 79,220

Duringtheyear,MatMastersexercisedperformanceshareschemeanddeferredbonusplanawardsoveratotalof15,286sharesatapre-taxgainof£531,640plus

anadditionalsumof£65,700inrespectofdividendequivalents.

W P Wyatt Performance share scheme awards

Granted30.05.19(nil-cost) 2910p – 12,062 – 12,062

Granted04.08.20(nil-cost) 2640p 9,205 – – 9,205

Granted04.06.21(nil-cost) 3102.5p 4,351 3,626 – 7,977

Performance share scheme total 13,556 15,688 – 29,244

Total share scheme interests 13,556 15,688 – 29,244

Duringtheyear,WillWyattexercisedperformanceshareschemeanddeferredbonusplanawardsoveratotalof24,639sharesatapre-taxgainof£848,852.71

plusanadditionalsumof£111,765inrespectofdividendequivalents.

RWMemmott Performance share scheme award

Granted24.11.23(nil-cost) 3585p 17,573 – – 17,753

Performance share scheme total 17,573 – – 17,753

Total share scheme interests 17,753 – – 17,753

TJLivett Performance share scheme awards

Granted30.05.19(nil-cost) 2910p 12,887 – – 12,887

Granted04.08.20(nil-cost) 2640p 14,561 – 7,280 21,841

Granted04.06.21(nil-cost) 3102.5p 18,868 – – 18,868

Granted30.05.22(nil-cost) 3740p 16,444 – – 16,444

Performance share scheme total 62,760 – 7,280 70,040

Deferred bonus plan – compulsory awards

Granted04.06.21(nil-cost) 3102.5p – – 4,956 4,956

Granted30.05.22(nil-cost) 3740p – – 5,217 5,217

Deferred bonus plan total – – 10,173 10,173

Total share scheme interests 62,760 – 17,453 80,213

TimLivettdidnotexerciseanyperformanceshareschemeordeferredbonusplanawardsduringthepartoftheyearuptohiscessationofhisdirectorship.Details

ofexercisesfollowingcessationofhisdirectorshiparesetoutonpages102and103.

JMBCayzer-Colvin Performance share scheme awards

Granted30.05.19(nil-cost) 2910p – 11,520 – 11,520

Granted04.08.20(nil-cost) 2640p 13,018 – 6,510 19,528

Granted04.06.21(nil-cost) 3102.5p 11,248 5,625 – 16,873

Granted30.05.22(nil-cost) 3740p 14,699 – – 14,699

Granted30.05.23(nil-cost) 3445p 16,763 – – 16,763

Performance share scheme total 55,728 17,145 6,510 79,383

Deferred bonus plan – compulsory awards

Granted04.06.21(nil-cost) 3102.5p – – 4,431 4,431

Granted30.05.22(nil-cost) 3740p – 4,666 – 4,666

Deferred bonus plan total – 4,666 4,431 9,097

Total share scheme interests 55,728 21,811 10,941 88,480

Duringtheyear,JamieCayzer-Colvinexercisedperformanceshareschemeawardsoveratotalof12,088sharesatapre-taxgainof£433,003plusanadditional

sumof£58,361inrespectofdividendequivalents.

104 Caledonia Investments plc Annual Report 2024

1. Performance conditions

Performance share scheme

Oftheawardsshownasunvestedwithperformanceconditions,fornil-cost

optionsgrantedtoWillWyattandTimLivetton4August2020and4June

2021,toMatMastersandTimLivetton30May2022,toMatMasterson30

May2023andtoRobMemmotton24November2023shareswillvestona

graduatedbasis,withvestingcommencingat10%ifthecompanyachieves

anannualisedNAVTRof3%,risingincrementallyto100%vestingon

achievementofanannualisedNAVTRof10%.

ForJamieCayzer-Colvin,whoisHeadoftheFundspool,60%ofhis

performance share scheme awards granted on these dates will be

measuredagainsttheannualisedtotalreturnsachievedbytheFundspool.

Awardswillsimilarlyvestonagraduatedbasis,withvestingcommencingat

10%onachievementofanannualisedFundspooltotalreturnof6%,rising

incrementallyto100%vestingonachievementofanannualisedtotalreturn

of13.5%.Theremaining40%ofJamieCayzer-Colvin’sperformanceshare

scheme awards for these grants will be measured against Caledonia’s

NAVTRasabove.

MatMasterswaspreviouslyHeadoftheCapitalportfoliobeforetakingon

broaderresponsibilityfortheIncomeportfoliofrom2019untilhis

appointmentasChiefExecutiveOfficer.Fornil-costoptionsgrantedon4

August2020and4June2021,53.3%willbemeasuredbyreferencetothe

annualisedtotalreturnachievedbytheCapitalportfolio,withawards

vestingonagraduatedbasis,commencingat10%onachievementofan

annualisedtotalreturnof4%,risingincrementallyto100%vestingon

achievementofanannualisedtotalreturnof11%.26.7%willbemeasured

byreferencetotheannualisedtotalreturnachievedbytheIncome

portfolioovertheperformancemeasurementperiod,withgraduated

vestingcommencingat10%onachievementofanannualisedtotalreturn

of3.5%,risingincrementallyto100%vestingonachievementofan

annualisedtotalreturnof7%.Theremaining20%oftheperformanceshare

scheme awards for these grants will be measured against Caledonia’s

NAVTRasabove.

Therelevantperformanceconditionswillbetestedoverthreeyearsfor

one-thirdofthesharescomprisedinanawardandoverfiveyearsforthe

remainingtwo-thirdsofthesharescomprisedinanaward.

Thenil-costoptionsgrantedon30May2019,shownasunvestedwithout

performanceconditions,wereperformance-testedagainsttheirrelevant

targetasat31March2024andachievedavestinglevelof100%forthose

measuredagainstCaledonia’sNAVTR.TheproportionofMatMasters’and

JamieCayzer-Colvin’snil-costoptionsawardedatthatdatemeasured

againsttheFundspool’sandCapitalportfolio’sreturnrespectivelyachieved

a100%vestinglevel.Theawardswillveston30May2024.

The one-third of the shares comprised in the nil-cost options granted on 4

June2021,alsoshownasunvestedwithoutperformanceconditions,

subjecttothree-yearperformancetestingwastestedasat31March2024

andachievedavestinglevelof100%forthosemeasuredagainst

Caledonia’sNAVTR.TheproportionofMatMasters’nil-costoptions

awarded at that date measured against the Capital and Income portfolios

achievedavestinglevelof94%and76%respectively.JamieCayzer-Colvin’s

nil-cost options awarded at that date measured against the Funds pool’s

returnachieveda100%vestinglevel.Theawardswillveston4June2024.

Other exercise conditions

2. Performance share scheme

Nil-costoptionsthatvestfollowingthethree-orfive-yearperformance

testingbecomeimmediatelyexercisableonthethirdorfifthanniversaryof

grant,asapplicable.

3. Vested but unexercised

Sharesvestedbutunexercisedrepresentthoseawardsthatareimmediately

exercisablewithoutanyconditions.

4. Deferred bonus plan

Compulsoryawardsunderthedeferredbonusplannormallyvestifthe

director remains an employee of the group for a three-year period

commencing on the first day of the financial year in which the award is

made.

Performance graph of total shareholder return and table

of Chief Executive Officer’s total remuneration

The graph below shows the company’s total shareholder return

(‘TSR’)againstthatoftheFTSEAll-ShareTotalReturnindexfor

the10financialyearsendingon31March2024.TSRhasbeen

calculatedassumingthatalldividendsarereinvestedontheir

ex-dividenddates.TheFTSEAll-ShareTotalReturnindexhasbeen

chosen as it is the benchmark by which the company measures

itsdeliveryofvalueoverthelongerterm.

TSR growth over 10 years

2014

120

160

200

240

280

320

360

2016 2018 2020 2022 2024

Caledonia TSR FTSE All-Share TR

Thetablebelowshowsthetotalremunerationreceivedbythe

ChiefExecutiveOfficerineachofthe10yearsto31March2024,

prepared on the same basis as in the single total figure in the table

onpage99,andthepercentageofthemaximumpotentialshort-

andlong-termincentivesreceivedinthoseyears.

Total

remuneration

£’000

Incentivesvested

as a percentage

of maximum

Years ended

31March

ChiefExecutive

Officer

Short-term

Long-

term%

2015 W P Wyatt 2,285 100.0 100.0

2016 W P Wyatt 1,648 45.0 100.0

2017 W P Wyatt 1,799 100.0 85.0

2018 W P Wyatt 1,795 40.0 84.7

2019 W P Wyatt 1,864 90.7 94.7

2020 W P Wyatt 805 – 20.9

2021 W P Wyatt 1,896 85.0 87.9

2022 W P Wyatt 2,326 100.0 100.0

2023 W P Wyatt

1,154

– 100.0

2023 MSDMasters

1,250

45.0 100.0

2024 MSDMasters 1,351 71.5 96.4

1. MatMasterssucceededWillWyattasChiefExecutiveOfficeron27July

2022.

2. Restatedfromlastyear’ssingletotalfiguretabletoreflectthecompany’s

 sharepriceonthevestingdateofthe2018and2020performanceshare

 schemeawards.

105

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Directors’ remuneration report (continued)

Annual report on directors’ remuneration

Percentage change in remuneration of the directors

The following table shows the percentage change in the basic

salary/fees,valueoftaxablebenefitsandshort-termincentives

paidtodirectorsintheyearto31March2024againsttheprior

financialyear,comparedwiththeaveragepercentagechangesin

thosecomponentsofpayofCaledonia’sotheremployees,

excludingdirectors,onapercapitabasis.

Standardsalaryincreasesawardedfrom1April2023were6%for

senioremployeesand,inrecognitionthatelevatedlevelsof

inflationhadadisproportionateimpact,8%forthoseonlower

incomes.Thepercapitapercentageincreaseinbasicsalaryfor

employees shown in the table is higher than this due to the effect

ofnon-standardincreasesawardedforpromotions,increased

responsibilitiesorothersuchadjustments.Theaveragepercapita

percentagechangeforemployeetaxablebenefitsincreasedover

theyearprincipallyduetochangesinbenefitcoverforcertain

employeesunderthecompany’sprivatemedicalinsuranceplan

andsmallvariancesinemployeebenefits.MatMasters,TimLivett

andJamieCayzer-Colvinwereawardedbonusesof71.5%,64%and

60.75%ofsalaryrespectively,comparedwith45%,45%and48%in

thepreviousfinancialyear.CertainmembersofCaledonia’sstaff

wereawardedbonusesofvaryinglevelsineachyeardependingon

companyperformance,investmentpoolperformance(where

relevant)andindividualperformance.Increasesinnon-executive

feesincludeanychangestoresponsibilitiesmadeduringtheyear.

2024 2023 2022 2021

Basic

salary/

fees

Taxable

benefits/

expenses

Short-

term

incentives

Basic

salary/

fees

Taxable

benefits/

expenses

Short-

term

incentives

Basic

salary/

fees

Taxable

benefits/

expenses

Short-

term

incentives

Basic

salary/

fees

Taxable

benefits/

expenses

Short-

term

incentives

Executive directors

MSDMasters

5.0 45.6 66.8 n/a n/a n/a n/a n/a n/a n/a n/a n/a

W P Wyatt

n/a n/a n/a (67.5) (70.7) (100) n/a (4.1) 17.7 n/a 12.9 100

TJLivett

(58.3) 5.0 (17.4) 5.1 6.3 (52.7) 1.5 22.8 12.8 2.5 23.6 100

RWMemmott

n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

JMBCayzer-Colvin 5.1 5.1 33.0 5.0 15.6 (49.6) 1.5 8.9 12.8 2.5 6.2 100

Chair and non-executive directors

D C Stewart – 100 – 10.0 – n/a – – n/a – – n/a

SJBridges

(70.5) 100 – 6.1 – n/a – – n/a – – n/a

F A Buckley

4.8 100 – n/a n/a n/a n/a n/a n/a n/a n/a n/a

Hon C W Cayzer 4.5 – – 11.4 – n/a – – n/a 6.6 – n/a

GBDavison 4.2 – – 13.1 – n/a – (100) n/a 3.5 100 n/a

MAFarlow 6.0 – – n/a – n/a – – n/a n/a n/a n/a

LRFordham 8.9 (100) – 10.7 100 n/a n/a – n/a n/a n/a n/a

CLFitzalanHoward 4.8 – – 13.3 – n/a – – n/a 43.8 n/a n/a

W P Wyatt

5.0 100 – n/a n/a n/a n/a n/a n/a n/a n/a n/a

Staff per capita

(excluding directors) 10.1 4.7 98.8 10.2 17.5 (43.2) 4.0 7.5 22.9 7.4 5.2 157.5

1.MatMasterswasappointedtotheboardon1April2022,succeedingWillWyattasChiefExecutiveOfficeron27July2022.

2. WillWyattservedasChiefExecutiveuntil27July2022andhasservedasanon-executivedirectorsince27July2022.

3. TimLivettretiredasadirectoron1September2023.

4. RobMemmottwasappointedduringtheyearandthereforehasnoprioryearcomparison.

5. StuartBridgesretiredasadirectoron19July2023.

6. FarahBuckleyservedforthefinalfourdaysoftheyearended31March2023.Toenableameaningfulyear-on-yearcomparisontobemade,thepercentagechange

hasbeencalculatedusingahypotheticalannualisedfeeforthefullfinancialyear.

7. WillWyattservedasanon-executivedirectorfrom27July2022.Toenableameaningfulyear-on-yearcomparisontobemade,thepercentagechangehasbeen

calculatedusingahypotheticalannualisedfeeforthefullfinancialyear.

Pay ratio information in relation to the total remuneration

of the Chief Executive Officer

Withfewerthan250UKemployees,Caledoniaisnotrequiredto

discloseChiefExecutiveOfficertoemployeepayratiosunderThe

Companies(MiscellaneousReporting)Regulations2018.However,

asrecommendedbyTheInvestmentAssociation,theCommittee

hasdecidedvoluntarilytopublishtheinformationbelow.Theratios

comparethetotalremunerationoftheChiefExecutiveOfficer,as

setoutonpage107,againstthelowerquartile,medianandupper

quartiletotalremunerationofthecompany’semployeesasat31

March2024.Thisdisclosurewillbuildupovertimetocoverarolling

10yearperiod.

AsignificantproportionoftheChiefExecutiveOfficer’stotal

earningspotentialiscomprisedofshare-basedincentives,whichare

linkedtoCaledonia’sperformanceandsharepricemovementover

thelongerterm.Thiswillinevitablyleadtoanelementofvolatilityin

theyear-on-yeartotalremunerationoftheChiefExecutiveOfficer

andconsequentlyvariationsintheratios,assomeemployeesdonot

participateinthelong-termincentiveschemeorparticipateatlower

levels.Asthemajorityofawardsundertheschemevestoverfive

years,participantswillonlybuildupequivalentannualvestingtothe

ChiefExecutiveOfficeroverthisperiodoftime,whichmayfurther

distortthecomparison.

Inordertoprovidefurthercontext,thetableincludesratiosbased

onbasicsalaryonlytodemonstrateovertimethattheunderlying

paystructuresdonotshowadivergenttrendbetweentheChief

ExecutiveOfficer’spayandthatofemployeesgenerallyandalso

thatemployeesarepaidfairly.

106 Caledonia Investments plc Annual Report 2024

Pay ratios Remunerationvalues

Year Methodology

P25

(lower

quartile)

P50

(median)

P75

(upper

quartile) Basis

Chief

Executive

Officer

P25

(lower

quartile)

P50

(median)

P75

(upper

quartile)

2019 Option A 32:1 13:1 5:1 Totalremuneration(£’000) 1,864 58 140 403

Salary only 13:1 6:1 4:1 Salaryonly(£’000) 540 42 88 150

2020 Option A 14:1 9:1 4:1 Totalremuneration(£’000) 814 57 94 217

Salary only 12:1 7:1 4:1 Salaryonly(£’000) 540 46 73 144

2021 Option A 30:1 15:1 6:1 Totalremuneration(£’000) 1,828 61 122 329

Salary only 12:1 7:1 4:1 Salaryonly(£’000) 540 46 78 138

2022 Option A 42:1 19:1 6:1 Totalremuneration(£’000) 2,294 54 122 392

Salary only 12:1 7:1 4:1 Salaryonly(£’000) 540 45 76 138

2023 Option A 20:1 14:1 6:1 Totalremuneration(£’000) 1,268 63 91 227

Salary only 9:1 6:1 3:1 Salaryonly(£’000) 450 50 70 135

2024 Option A 20:1 13:1 5:1 Totalremuneration(£’000) 1,351 68 106 268

Salary only 9:1 6:1 3:1 Salaryonly(£’000) 473 51 77 143

Relative importance of spend on pay

The graph below shows the personnel expenses for the year of

groupcompaniesconsolidatedunderIFRS10,comparedwith

amounts distributed to Caledonia’s shareholders by way of

dividendsandsharepurchases.

a. Dividendspaidin2023includeaspecialdividendof£1.75perordinary

share paidon4August2022.

Statement of implementation of remuneration policy

in the 2025 financial year

The company expects to operate the remuneration policy as

describedintheapprovedremunerationpolicysetoutonpages

93to98withoutanychangesinthefinancialyearending

31March2025.

Basic salaries of executive directors

Forthe2025financialyear,theCommitteehasawardedan

increaseinbasicsalaryof4%toMatMasters,RobMemmottand

JamieCayzer-Colvin,broadlyinlinewithinflation,whichwasthe

samestandardincreasegiventothecompany’semployees.

Theexecutivedirectors’salariesforthe2024financialyear

areasfollows:

Salaryforyearto31March

2025

2024

MSDMasters 491,500 472,500

RWMemmott 437,000 420,000

JMBCayzer-Colvin 400,500 385,000

Chair’s and non-executive directors’ fees

TheChair’sfeewillbeunchangedfortheyearahead.Thenon-

executivedirectorbasicfeehasbeenincreasedby3.7%.

Nochangeshavebeenmadetothefeespaidforchairingand

membership of the Audit and Risk and Remuneration Committees

ortothefeepaidtotheSeniorIndependentDirector.

Thefeesareasfollows:

Feesforyearto31March

2025

2024

Chair 165,000 165,000

Non-executivedirectorbasicfee 49,000 47,250

Chair of the Audit Committee 10,000 10,000

MemberoftheAuditCommittee 2,500 2,500

Chair of the Remuneration Committee 8,000 8,000

MemberoftheRemunerationCommittee 2,000 2,000

Senior Independent Director/Chair of the

GovernanceCommittee 6,000 6,000

NoadditionalfeesarepaidformembershipoftheGovernance

andNominationCommittees.

140

120

100

£m

Personnel expenses Dividends/share purchases

2024 2023

£38.2m

£92.8m

£20.2m

£134.5m

£21.2m

£42.3m

1. Theemployeesatthelower,medianandupperquartilesweredeterminedasat31Marchintherelevantyear.

2.‘OptionA’methodology,assetoutinTheCompanies(MiscellaneousReporting)Regulations2018,whichrequiresdeterminationofthetotalfull-time

equivalentearningsofallUKemployeesfortherelevantfinancialyear,hasbeenusedasthisisconsideredthemoststatisticallyaccurateunderthereporting

regulations.

3.Todeterminefull-timeequivalentearnings,joinersduringtheyearareassumedtohaveworkedforthefullyearwithsalary,benefitsandbonusprorata

accordingly.Reducedhoursemployeessimilarlyhavebeenassumedtohaveworkedonafull-timebasis.Noadjustmentshavebeenmadetothevalueof

share-basedincentivesthatvestedduringtheyearforrelevantemployees,otherthanthatawardsheldbyreducedhoursemployeeshavebeenrecalculated

toreflectthenumberofsharesthatwouldhavebeengrantedbasedonthefull-timeequivalentsalaryoftheparticipantatthetimeofgrant.

107

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Directors’ remuneration report (continued)

Annual report on directors’ remuneration

Annual bonus scheme and long-term incentive schemes

RPIwaspreviouslyusedasareferencepointforinflationinthe

overallbonuscalculation.WhilstRPIisstillpublishedbytheOffice

forNationalStatistics,itisrecognisedthattheCPIHisnowthe

leadingandpreferredindicatorofinflationintheUK.Since2023,

Caledonia has use CPIH in place of RPI as the measure for UK

inflation.However,giventhedifferentialbetweenthetwoinflation

rateslastyear,theCommitteehascommencedaphasedtransition

from RPI to CPIH as the inflation benchmark for bonus purposes

overthecourseofthethree-yearremunerationpolicyperiod.The

inflationbenchmarkwasweighted67:33onRPI:CPIHforthe2024

financialyear,movingto50:50for2025,33:67for2026and100%

onCPIHfor2027.

No other changes to the performance metrics or award

opportunities for the company’s annual bonus or long-term

incentiveschemesareanticipatedforthe2025financialyear.

Approach

The Committee will keep the implementation of the remuneration

policyunderreviewinordertotakeaccountofanychangesinthe

company’sbusinessenvironmentandremunerationpractice

generally,butwiththeoverallaimofensuringthatCaledonia’s

remuneration arrangements continue to support the company’s

strategyanddeliverlong-termshareholdervaluebyattractingand

retainingtalentandrewardingexecutivesappropriatelyinthelight

ofthecompany’sperformance.

Consideration by the directors of matters relating to

directors’ remuneration

ThecurrentmembersoftheCommitteeareAnneFarlow(Chair),

FarahBuckley,ClaireFitzalanHowardandDavidStewart.

Duringtheyear,theCommitteereceivedadvicefromFreshfields

BruckhausDeringerLLP,thecompany’sprincipallegaladvisers,

whichcoveredmattersincludingthepreparationofthedirectors’

remunerationreport,shareplansandthearrangementsforRob

Memmott’sappointment.EllasonLLP,appointedbytheCommittee

followingaformaltenderprocesscompletedin2022,provides

remunerationadvice.TheCommitteeissatisfiedthatadvice

receivedwasobjectiveandindependent.Ellasonhasnoconnection

withindividualdirectorsandisamemberoftheRemuneration

Consultants Group (the professional body for remuneration

consultants)andadherestoitscodeofconduct.ThefeesforEllason

forworkrelatingtotheCommitteefor2024were£22,070(2023:

£72,690).Feesincurredarechargedonthebasisofeachfirm’s

standardtermsofbusiness.Ellasondidnotprovideanyother

servicestothecompany.TheCommitteeassessestheperformance

ofitsadvisers,theassociatedleveloffeesandreviewsthequalityof

adviceprovidedtoensurethatitisobjectiveandindependentofany

supportprovidedtomanagement.

TheCommitteealsoconsultedwiththeChiefExecutiveOfficer

inrelationtotheremunerationoftheexecutivedirectorsand

otherseniorexecutivesandinternalsupportwasprovidedtothe

CommitteebytheCompanySecretary.Noexecutiveparticipates

indiscussionsinrespectoftheirownremuneration.Giventhe

compositionoftheCommitteeandthisrequirement,weare

comfortable that no conflicts arose in respect of decision-making

bytheCommittee.

Statement of voting at general meetings

Attheannualgeneralmeetingofthecompanyheldon19July2023,

thevoteslodgedfortheresolutionsrelatingtodirectors’

remunerationandtheremunerationpolicywereasfollows:

Number %

To approve the 2023 Directors’ remuneration

report (other than the directors’

remuneration policy)

Votesinfavour 35,110,844 98.9

Votes against 403,439 1.1

Totalvotescast 35,609,903

Votes withheld 95,620

Number %

To approve the remuneration policy

Votesinfavour 35,087,565 98.8

Votes against 412,670 1.2

Totalvotescast 35,609,903

Votes withheld 109,668

Thisreportwasapprovedbytheboardon20May2024andsigned

onitsbehalfby:

Anne Farlow

Chair of the Remuneration Committee

20May2024

108 Caledonia Investments plc Annual Report 2024

Directors’ Report

TheDirectors’reportfortheyearended31March2024has

been prepared in accordance with the disclosure requirements

ofthefollowing:

• CompaniesAct2006

• TheLargeandMedium-sizedCompaniesandGroups(Accounts

andReports)Regulations2008(asamended)

• FinancialConductAuthority’sListingRules(‘LRs’)andDisclosure

GuidanceandTransparencyRules(‘DTRs’).

TheDirectors’report,togetherwiththeStrategicreportonpages

10to62,representsthemanagementreportforthepurposeof

compliancewithDTR4.1.5R(2).

Information included elsewhere

The following information required to be included in the

Directors’ report has been included elsewhere and is incorporated

byreference:

Disclosure Section of annual report Page(s)

Information on exposure to

liquidity risk

Strategic report 60

Likelyfuturedevelopments

in the business

Strategic report 60-61

Engagementwithsuppliers,

customers and others

Corporategovernance

report,Section172

statement

76-78

Greenhousegasemissions,

energy consumption and

energy efficiency action

Strategic report 52-54

Disclosure of information

to auditors

Responsibility statements 113

Financial risk management

objectivesandpolicies

Note 23 141-146

1. Inaccordancewithsection414C(11)oftheCompaniesAct2006.

Dividends

Dividend policy

Thecompany’spolicyistopayanincreasingannualdividendper

shareinrealterms,whichithasnowdonefor57consecutiveyears.

Inaddition,thecompanymaysupplementtheannualdividendwith

specialdividendswhentheboardconsidersitappropriate,for

exampleifthecompanyhassurpluscashreservesinexcessof

itsstrategicinvestmentplans.

Theboardhistoricallyaimedfortheannualdividendtobefully

coveredbynetrevenuefortherelevantfinancialyearinaperiodof

normal trading but modified this approach in 2023 to reduce the

strategiclevelofnetrevenuecoverfromfullycoveredtoaround

0.5xandalsotofactorinnetcashinflowfromthematuringfunds

portfolio.Theexpectationisthatthiswillprovideanaggregatecash

flowcoverforthedividendofatleast1xoverthemediumterm.The

companyhasavailabledistributablereservesof£2,592m,broadly

equivalentto68years’paymentofthecurrentannualdividendto

maintainanincreasingannualdividendpershareinrealterms.

2024 dividend distributions

Aninterimdividendof18.93ppershare(2023:18.2p)waspaidon

4January2024andtheboardhasrecommendedafinaldividend

of51.47ppershare(2023:49.2p),givingtotalannualdividendsfor

theyearof70.4ppershare(2023:67.4p).

Share capital structure

Thecompanyhastwoclassesofsharecapital:ordinarysharesof

5peachanddeferredordinarysharesof5peach.

Theholdersoftheordinarysharesareentitledtoreceivedividends

asdeclaredfromtimetotimeandareentitledtoonevotepershare

atmeetingsofthecompany.Allvotingrightsare,however,

suspended in respect of any of the company’s shares that are

heldintreasuryorbygroupcompanies.

Thedeferredordinarysharescarrynovotingrightsandarenot

redeemable.Theycarrytherighttoafixedcumulativepreference

dividendof1%perannumofthenominalvalueofadeferred

ordinaryshare,being0.05ppershare,or£4,000inaggregate,for

allsuchsharescurrentlyinissue.Thecompanyisrequiredtopay

thedividendtotheextentthatithasdistributableprofits.Ona

winding-uporotherreturnofcapital,thedeferredordinaryshares

carry the right to the payment of the amount paid up on the shares

onlyafterholdersoftheordinaryshareshavereceivedthesumof

£100,000inrespectofeachordinaryshare.Allofthedeferred

ordinarysharesareheldbySterlingIndustriesLtd,awholly-owned

subsidiaryofCaledonia.

At31March2023,54,663,662ordinarysharesand8,000,000

deferredordinaryshareswereinissue.Theordinaryshares

thereforerepresentedapproximately87%andthedeferred

ordinarysharesapproximately13%ofthetotalissuedsharecapital

bynominalvalue.Oftheordinarysharesinissueat31March2024,

3,000shareswereheldbyagroupcompany.Asstatedabove,all

votingrightsaresuspendedontheseshares.

Duringtheyear,thecompanypurchased51,903ofitsordinary

sharesatatotalcostof£1.7m.Theseshareshadanominalvalueof

£2,595,represented0.09%oftheissuedordinarysharecapitalasat

31March2023andwereimmediatelycancelled.Theseshareswere

purchasedtotakeadvantageofthewidediscountofthecompany’s

sharepricetoitsnetassetvalue.Sincetheyearend,afurther

238,316ordinaryshareshavebeenpurchasedandcancelledata

totalcostof£8.2m.Thecompany’sissuedsharecapitalafterthese

transactions,asat20May2024,beingthelastpracticabledateprior

tosignatureoftheseaccounts,was54,373,443ordinarysharesand

8,000,000deferredordinaryshares.

109

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Restrictions on the transfer of shares

There are no specific restrictions on the transfer of the company’s

shares,althoughthearticlesofassociationcontainprovisions

whereby the board may refuse to register a transfer of a certificated

sharewhichisnotfullypaid,providedthatsuchrefusaldoesnot

preventdealingsinthesharefromtakingplaceonanopenand

properbasis.Theboardmayalsorefusetoregisterthetransferofa

certificatedshareunlessitis(a)lodged,dulystamped(ifstampable),

at the registered office or at such other place as the board may

appoint,accompaniedbythecertificateforthesharestowhichit

relatesandsuchotherevidenceastheboardmayreasonably

requiretoshowtherightofthetransferortomakethetransfer;

(b)inrespectofonlyoneclassofshares;and(c)infavourofnot

morethanfourtransferees.

The directors may refuse to register a transfer of shares if a

shareholder has not supplied information to the company in default

ofarequestdulyservedundersection793oftheCompaniesAct

2006andsuchsharesrepresentatleast0.25%oftheclassof

sharesconcerned.

Substantial interests

Asat31March2024andatthedateofthisreport,thecompany

hadreceivedformalnotificationsofthefollowingholdingsinits

ordinarysharesinaccordancewiththerequirementsoftheDTRs:

Number of

votingrights

Percentage

ofvoting

rights

TheCayzerTrustCompanyLtd 19,292,364 35.03%

1. Percentageholdingbasedontotalvotingrightsat6August2021.

Employee Share Trust

TheCaledoniaInvestmentsplcEmployeeShareTrustacquiresand

holds ordinary shares in the company for subsequent transfer to

employees exercising options under the company’s performance

shareschemeordeferredbonusplan.Thevotingrightsofshares

held by the trust are exercisable by the independent trustee

however,inpractice,thesearenotvoted.Thetrustisfinanced

by an interest free loan facility from Caledonia and the trustee has

waivedalldividendspayableinrespectoftheordinarysharesheld

bythetrust.

At31March2024,thetrustheld223,666ordinaryshares,

representing0.41%ofthetotalissuedvotingsharecapital.

Restrictions on voting rights

The directors may direct that a shareholder shall not be entitled to

attendandvoteeitherpersonallyorbyproxyorexerciseanyother

right conferred by membership in relation to general meetings of

the company in respect of some or all of the shares held by them if

they or any person with an interest in such shares has been duly

servedwithanoticeundersection793oftheCompaniesAct2006

and is in default for the prescribed period in supplying to the

companytheinformationrequiredor,inpurportedcompliancewith

suchanotice,hasmadeastatementwhichisfalseorinadequatein

amaterialparticular.

Agreements which may restrict the transfer of shares or exercise

of voting rights

The company is not aware of any arrangements which may restrict

thetransferofanyofitssharesortheexerciseofanyvotingrights.

Authority to allot shares

Attheannualgeneralmeetingofthecompanyheldon19July2023,

shareholders granted to the directors authority to allot ordinary

sharesuptoanominalamountof£911,000,representing

approximatelyone-thirdoftheordinarysharecapitaltheninissue,

with authority to allot additional ordinary shares up to a nominal

valueof£911,000,representingapproximatelyafurtherone-third

oftheordinarysharecapitaltheninissue,bywayofpre-emptive

rightsissuesonly,inaccordancewithguidanceissuedatthattimeby

theInvestmentAssociation.Thedirectorswerefurtherauthorised

toissueordinarysharesuptoanominalamountof£136,659other

thanproratatoexistingordinaryshareholders.Theseauthorities

lastuntil27October2023or,ifearlier,theconclusionofthenext

annualgeneralmeeting.

Authority to purchase shares

Attheannualgeneralmeetingheldon19July2023,shareholders

also granted authority for the company to make market purchases

ofupto5,466,300ofitsownordinaryshares,beingapproximately

10%oftheordinarysharecapitaltheninissue,atapricenotmore

thanthehigherof(a)5%abovetheaverageofthemiddlemarket

quotationsforordinarysharesduringthefivebusinessdays

precedinganysuchpurchase;and(b)thehigherof(i)thepriceof

thelastindependenttradeinordinaryshares;and(ii)thehighest

currentindependentbidrelatingtheretoonthetradingvenue

wherethepurchaseiscarriedout,norlessthan5p,beingthe

nominalvalueofanordinaryshare.Thisauthoritylastsuntil19

October2024or,ifearlier,theconclusionofthenextannualgeneral

meeting.Atthesametime,shareholderswhowerenotmembersof

theCayzerfamilyconcertparty(‘CayzerConcertParty’)gavetheir

approvalforawaiverbyThePanelonTakeoversandMergersofthe

obligationthatcouldariseontheCayzerConcertPartyunderRule9

oftheCityCodeonTakeoversandMergerstomakeageneraloffer

forCaledoniaontheimplementationbythecompanyoftheabove

authoritytopurchaseitsownshares.Theapprovalwassubjectto

themaximumpercentageofvotingrightsinwhichtheCayzer

ConcertPartyisinterestednotexceeding49.9%asaresultof

purchasesbythecompany.Thiswaiverexpireson19October2024

or,ifearlier,theconclusionofthenextannualgeneralmeeting.

DuetotheleveloftheshareholdingoftheCayzerConcertPartyand

themaximumpercentageofvotingrightspermittedtobeheldbyit

undertheRule9waiver,theboardhasonlylimitedscopetoutilise

theauthoritytopurchasethecompany’sshares.Itwillhowever

consider using the authority when it considers it in the company’s

and shareholders’ best interests to do so and will result in an

increaseinnetassetvalueperordinaryshare.Inconsidering

whethertoexercisetheauthority,theboardwilltakeintoaccount

boththelonger-terminvestmentopportunitiesavailabletothe

company and any discount at which the ordinary shares are trading

inthemarketrelativetothenetassetvalueperordinaryshare.

Directors’ Report (continued)

110 Caledonia Investments plc Annual Report 2024

Change of control rights

There are no special change of control rights in relation to the

company’sshares.

Awards granted under the company’s performance share scheme

anditsdeferredbonusplanmaybecomeexercisableorvestasa

resultofachangeofcontrol,althoughthenumberofshares

comprisedinthoseawardsmaybereduced.Theservicecontracts

ofcertaindirectorsandotherseniorexecutivesalsocontain

provisionswherebyaliquidatedsumispayablebythecompany

intheeventofterminationwithinoneyearfollowingachange

ofcontrol.

Further details of these change of control rights applicable to

directorsaresetoutintheDirectors’remunerationreport.

Thecompanyispartytotworevolvingcreditagreementsthatgive

each lender the right to require early repayment of outstanding

loansandcancellationofitsavailablecommitmentsuponachange

ofcontrolofthecompanyoccurring.Atthedateofthisreport,

changeofcontrolprovisionswereincludedintherevolvingfacility

agreementsdated6July2017betweenthecompanyandeachof

INGBankN.V.,Londonbranch,andTheRoyalBankofScotland

InternationalLimited,Londonbranch,asamendedandrestated

fromtimetotime.Thecompanyisnotawareofanyother

agreementswithchangeofcontrolprovisionsthataresignificantin

termsoftheirpotentialimpacttothebusiness.

Directors

Thedirectorsofthecompanyareshownonpages66and67.

Allofthedirectorsservedthroughouttheyear,otherthanRob

Memmott,whowasappointedon1September2023.Stuart

BridgesandTimLivettalsoservedasdirectorsforpartoftheyear

until19July2023and1September2023respectively.

Directors’ indemnity

Eachofthedirectorshasthebenefit,underthecompany’sarticles

ofassociation,ofanindemnity,totheextentpermittedbythe

CompaniesAct2006,againstanyliabilityincurredbythemfor

negligence,default,breachofdutyorbreachoftrustinrelation

totheaffairsofthecompany.

Appointment and removal of directors

Theappointmentandremovalofdirectorsisgovernedbythe

company’sarticlesofassociationandprevailingcompanylaw.

Thearticlesofassociationprovidethatateveryannualgeneral

meetingone-thirdofthedirectors,orifnotamultipleofthree,the

numbernearesttoone-third,shallretirebyrotationandtherefore

berequiredtoseekre-electionbyshareholders.Newdirectors

maybeappointedbytheboard,butaresubjecttoelectionby

shareholders at the next annual general meeting of the company

followingtheirappointment.However,tocomplywiththe

provisionsoftheUKCorporateGovernanceCode(the‘Code’),

thecompanyrequiresthatalldirectorsshouldbesubjecttoannual

electionbyshareholders.Shareholdersmayalsoappointnew

directorsbyordinaryresolution.Thearticlesofassociationlimitthe

numberofdirectorstonotlessthanthreeandnotmorethan12,

unlesstheshareholdersresolveotherwise.

InaccordancewiththeFinancialConductAuthority’sListingRules,

the election of those directors determined by the board to be

independentundertheCodemustbesubjecttotheapprovalof

both all shareholders of the company and separately those

shareholderswhoarenotcontrollingshareholders,beingtheCayzer

ConcertParty.

Political donations

The company made no political donations and incurred no political

expenditureduringtheyear.

Research and development

Thecompanydoesnotengageinresearchanddevelopment.

Overseas branches

Thecompanydoesnothaveanyoverseasbranches.

Investment trust status

Caledoniahasbeenacceptedasanapprovedinvestmenttrustby

HMRevenue&Customs,subjecttocontinuingtomeeteligibility

conditions.Thedirectorsareoftheopinionthatthecompanyhas

conducted its affairs in a manner which will satisfy the conditions

forcontinuedapprovalasaninvestmenttrustundersection1158

oftheCorporationTaxAct2010.

Registered office and number

Theregisteredofficeofthecompanyisat:CayzerHouse,30

BuckinghamGate,LondonSW1E6NN.Thecompanyisregistered

inEnglandundernumber235481.

Post balance sheet events

Therearenopostbalancesheetevents.

TheDirectors’reportwasapprovedbytheboardon20May2024

andsignedonitsbehalfby:

Richard Webster

Company Secretary

111

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Directors̕ Report (continued)

Cross references to information required to be disclosed by Listing Rule 9.8.4 R

TocomplywithListingRule9.8.4C,thefollowingtableprovidesreferencestowhererelevantinformationrequiredtobedisclosed

underListingRule9.8.4Rcanbefound.

Listing Rule Required information Location

9.8.4R(12) Detailsofanyarrangementunderwhichashareholderhaswaivedoragreed

towaiveanydividends.

Directors’report–page110.Waiverof

alldividendsbythetrusteeofThe

CaledoniaInvestmentsplcEmployee

ShareTrust.

9.8.6R(13) Whereashareholderhasagreedtowaivefuturedividends,detailsofsuch

waivertogetherwiththoserelatingtodividendswhicharepayableduring

theperiodunderreview.

Asabove.

9.8.4R(14)(a) A statement made by the board that the listed company has entered into an

agreementwithacontrollingshareholderunderListingRule9.2.2ADR(1).

Corporategovernancereport–page72.

Relationswithcontrollingshareholders.

9.8.4R(14)(c) Astatementmadebytheboardthat:

1.thelistedcompanyhascompliedwiththeindependenceprovisions

included in any agreement with a controlling shareholder entered into

underLR9.2.2ADR(1)

2.sofarasthelistedcompanyisaware,theindependenceprovisionsincluded

inanyagreementwithacontrollingshareholderenteredintounderLR9.2.2

ARR(1)havebeencompliedwithduringtheperiodunderreviewbythe

controlling shareholder or any of its associates

3.sofarasthelistedcompanyisaware,theprocurementobligation(assetout

inLR9.2.2BR(2)(a))includedinanyagreemententeredintounderLR9.2.2

ADR(1)hasbeencompliedwithduringtheperiodunderreviewbya

controllingshareholder.

Asabove.

112 Caledonia Investments plc Annual Report 2024

Responsibility statements

Statement of directors’ responsibilities in respect of the

annual report and the financial statements

The directors are responsible for preparing the annual report and

financial statements in accordance with UK adopted international

accountingstandardsandapplicablelawandregulations.

Company law requires the directors to prepare financial

statementsforeachfinancialyear.Underthatlaw,thedirectors

havepreparedthegroupandparentcompanyfinancialstatements

inaccordancewithUKadoptedinternationalaccountingstandards.

Undercompanylaw,thedirectorsmustnotapprovethefinancial

statementsunlesstheyaresatisfiedthattheygiveatrueandfair

viewofthestateofaffairsofthegroupandthecompanyandof

theprofitorlossofthegroupforthatperiod.

Inpreparingthesefinancialstatements,thedirectorsare

requiredto:

• select suitable accounting policies and then apply

them consistently

• makejudgementsandestimatesthatarereasonable

and prudent

• statewhethertheyhavebeenpreparedinaccordancewith

UKadoptedinternationalaccountingstandards,subjectto

any material departures disclosed and explained in the

financial statements

• prepare the financial statements on the going concern basis

unless it is inappropriate to presume that the group and the

company will continue in business

• prepareadirectors’report,astrategicreportanddirectors’

remuneration report which comply with the requirements of the

CompaniesAct2006(the‘Act’).

The directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the company’s

transactions and disclose with reasonable accuracy at any time the

financial position of the company and the group and enable them

toensurethatthefinancialstatementscomplywiththeAct.They

are also responsible for safeguarding the assets of the company

andhencefortakingreasonablestepsforthepreventionand

detectionoffraudandotherirregularities.

The directors are responsible for ensuring that the annual report

financialstatements,takenasawhole,arefair,balanced,and

understandableandprovidetheinformationnecessaryfor

shareholderstoassessthegroup’sperformance,businessmodel

andstrategy.

Website publication

The directors are responsible for ensuring the annual report and

financialstatementsaremadeavailableonawebsite.

Financial statements are published on the company’s website in

accordancewithlegislationintheUKgoverningthepreparation

anddisseminationoffinancialstatements,whichmayvaryfrom

legislationinotherjurisdictions.Themaintenanceandintegrityof

thecompany’swebsiteistheresponsibilityofthedirectors.The

directors’ responsibility also extends to the ongoing integrity of

thefinancialstatementscontainedtherein.

Disclosure of information to auditors

Eachofthepersonswhoisadirectoratthedateofapprovalofthis

reportconfirmsthat:

1.sofarasthedirectorisaware,thereisnorelevantinformation

of which the company’s auditor is unaware

2.thedirectorhastakenallstepsthattheyoughttohavetakenasa

directorinordertomakethemselvesawareofanyrelevantaudit

information and to establish that the company’s auditor is aware

ofthatinformation.

Thisconfirmationisgiven,andshouldbeinterpreted,inaccordance

withtheprovisionsofsection418oftheAct.

Responsibility statements under the Disclosure Guidance

and Transparency Rules and the UK Corporate

Governance Code

Eachofthedirectors,whosenamesandfunctionsarelistedon

pages66and67confirmthat,tothebestoftheirknowledge:

1.thegroupandparentcompanyfinancialstatements,whichhave

been prepared in accordance with applicable accounting

standards,giveatrueandfairviewoftheassets,liabilities,

financial position and profit or loss of the company and the

undertakings included in the consolidation taken as a whole

2.theannualreportincludesafairreviewofthedevelopmentand

performance of the business and the position of the company

and the undertakings included in the consolidation taken as a

whole,togetherwithadescriptionoftheprincipalrisksand

uncertaintiesthatitfaces.

Signedonbehalfoftheboardby:

Mat Masters Rob Memmott

ChiefExecutiveOfficer ChiefFinancialOfficer

20May2024  20May2024

113

Strategic report

Corporate governance

Financial statements Other informationIntroduction

Considered

& long-term

Our independence and reputation enables

us to take the long term view, which is key

to our goal of building a store of wealth

and delivering steady and rising income

for our shareholders.

The Quinnian Trust

The Caledonia Investments Charitable Foundation provided an additional grant

to The Quinnian Trust, following its original donation in 2022. The Quinnian

Trust supports young people in leisure activities, promoting self-reliance,

resourcefulness and a sense of responsibility for others. In particular, where

such activities are associated with maritime pursuits, The Quinnian Trust

provides aid and equipment to other organisations with similar aims.

114 Caledonia Investments plc Annual Report 2024

Financial

statements

Independent auditor’s report

116

Financial statements

124

Material accounting policies

128

Notes to the financial statements

133

Other information

Company performance record

152

Glossary of terms and alternative

performance measures

153

Valuation methodology

156

Investments summary

155

Information for investors

158

Directors and advisers

159

115

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Independent auditor’s report

to the members of Caledonia Investments plc

Opinion on the financial statements

Inouropinion:

• thefinancialstatementsgiveatrueandfairviewofthestateof

theGroup’sandoftheParentCompany’saffairsasat31March

2024andoftheGroup’sprofitfortheyearthenended;

• theGroupfinancialstatementshavebeenproperlypreparedin

accordancewithUKadoptedinternationalaccountingstandards;

• theParentCompanyfinancialstatementshavebeenproperly

prepared in accordance with UK adopted international

accounting standards and as applied in accordance with the

provisionsoftheCompaniesAct2006;and

• thefinancialstatementshavebeenpreparedinaccordancewith

therequirementsoftheCompaniesAct2006.

WehaveauditedthefinancialstatementsofCaledoniaInvestments

plc(the‘ParentCompany’)anditsconsolidatedsubsidiaries(the

‘Group’)fortheyearended31March2024whichcomprisethe

Groupstatementofcomprehensiveincome,theGroupand

CompanyStatementoffinancialposition,theGroupandCompany

Statementofchangesinequity,theGroupandCompanyStatement

ofcashflows,andnotestothefinancialstatements,includinga

materialaccountingpolicyinformation.Thefinancialreporting

framework that has been applied in their preparation is applicable

law and UK adopted international accounting standards and as

regardstheParentCompanyfinancialstatements,asappliedin

accordancewiththeprovisionsoftheCompaniesAct2006.

Basis for opinion

We conducted our audit in accordance with International

StandardsonAuditing(UK)(ISAs(UK))andapplicablelaw.Our

responsibilities under those standards are further described in the

Auditor’s responsibilities for the audit of the financial statements

sectionofourreport.Webelievethattheauditevidencewehave

obtainedissufficientandappropriatetoprovideabasisforour

opinion.Ourauditopinionisconsistentwiththeadditionalreport

totheauditcommittee.

Independence

Followingtherecommendationoftheauditcommittee,wewere

appointedbytheMembersoftheParentCompanyon21July

2021toauditthefinancialstatementsfortheyearended31

March2022andsubsequentfinancialperiods.Theperiodof

total uninterrupted engagement including retenders and

reappointmentsisthreeyears,coveringtheyearsended31

March2022to31March2024.Weremainindependentofthe

Group and the Parent Company in accordance with the ethical

requirementsthatarerelevanttoourauditofthefinancial

statementsintheUK,includingtheFRC’sEthicalStandardas

appliedtolistedpublicinterestentities,andwehavefulfilled

our other ethical responsibilities in accordance with these

requirements.Thenon-auditservicesprohibitedbythatstandard

werenotprovidedtotheGrouportheParentCompany.

Conclusions relating to going concern

Inauditingthefinancialstatements,wehaveconcludedthatthe

Directors’ use of the going concern basis of accounting in the

preparationofthefinancialstatementsisappropriate.Our

evaluationoftheDirectors’assessmentoftheGroupandthe

Parent Company’s ability to continue to adopt the going concern

basisofaccountingincluded:

1.ObtainingtheDirectors’assessmentofthegoingconcernstatus

andlong-termviabilityofthegroupandtheparent;

2.Checkingtheaccuracyoftheunderlyingmodelsusedinthe

Directors’assessment;

3.Challengingmanagement’sassumptionsandjudgementsmade

withregardstostress-testingforecasts;

4.Assessingtheavailabilityofbankfacilities;and

5.Assessingtheliquidityofthequotedinvestmentportfolio.

Basedontheworkwehaveperformed,wehavenotidentifiedany

materialuncertaintiesrelatingtoeventsorconditionsthat,

individuallyorcollectively,maycastsignificantdoubtontheGroup

and the Parent Company’s ability to continue as a going concern for

aperiodofatleasttwelvemonthsfromwhenthefinancial

statementsareauthorisedforissue.

In relation to the Parent Company’s reporting on how it has applied

theUKCorporateGovernanceCode,wehavenothingmaterialto

add or draw attention to in relation to the Directors’ statement in

the financial statements about whether the Directors considered it

appropriatetoadoptthegoingconcernbasisofaccounting.

OurresponsibilitiesandtheresponsibilitiesoftheDirectorswith

respecttogoingconcernaredescribedintherelevantsectionsof

thisreport.

Statutory Auditor

BDO LLP

20 May 2024

116 Caledonia Investments plc Annual Report 2024

Overview

Coverage 100%(2023:100%)ofGroupprofitbeforetax

100%(2023:100%)ofGrouprevenue

100%(2023:100%)ofGrouptotalassets

Key audit

matters (KAMs)

2024 2023

KAM1-Valuationof

UnquotedPrivate

CapitalInvestments • •

KAM2-Valuationof

Fundinvestments • •

Materiality Group financial statements as a whole

£44.5m(2023:£41.8m)basedon1.5%

(2023:1.5%)ofNetAssets

An overview of the scope of our audit

OurGroupauditwasscopedbyobtaininganunderstandingof

theGroupanditsenvironment,includingtheGroup’ssystem

ofinternalcontrol,andassessingtherisksofmaterialmisstatement

inthefinancialstatements.Wealsoaddressedtheriskof

managementoverrideofinternalcontrols,includingassessing

whethertherewasevidenceofbiasbytheDirectorsthatmayhave

representedariskofmaterialmisstatement.

The Group engagement team carried out a full scope audit of

significant components as well as non-significant components of

the group mentioned below as they required audits for statutory

purposes.CaledoniaInvestmentsplcandCaledoniaGroupServices

Limitedwereconsideredtobesignificantcomponentsforthis

audit.TheGroupconsistedofthefollowingcomponents:

1.CaledoniaInvestmentsplc;

2.CaledoniaGroupServicesLimited;

3.CaledoniaTreasuryLimited;

4.BuckinghamGateLimited.

The Group audit team performed the Group audit as if it related to

asingleaggregatedsetoffinancialstatements,usingtheGroup

materialitylevelssetoutabove.

Climate change

Ourworkontheassessmentofpotentialimpactsonclimate-

related risks on the Group’s operations and financial statements

included:

1.Enquiriesandchallengeofmanagementtounderstandthe

actionstheyhavetakentoidentifyclimate-relatedrisksandtheir

potential impacts on the financial statements and adequately

discloseclimate-relatedriskswithintheannualreport;and

2.ReviewoftheminutesofBoardandAuditCommitteemeetings

and performance of a risk assessment as to how the impact of

the Group’s commitment as set out in the other information may

affectthefinancialstatementsandouraudit.

We challenged the extent to which climate-related considerations

havebeenreflected,whereappropriate,inmanagement’sgoing

concernassessmentandviabilityassessment.

We also assessed the consistency of managements disclosures

includedasother‘information’/‘StatutoryOtherInformation’

within the financial statements and with our knowledge obtained

fromtheaudit.

Basedonourriskassessmentprocedures,wedidnotidentify

theretobeanyKeyAuditMattersmateriallyimpactedbyclimate-

relatedrisks.

Key audit matters

Keyauditmattersarethosemattersthat,inourprofessional

judgement,wereofmostsignificanceinourauditofthefinancial

statements of the current period and include the most significant

assessed risks of material misstatement (whether or not due to

fraud)thatweidentified,includingthosewhichhadthegreatest

effecton:theoverallauditstrategy,theallocationofresourcesin

theaudit,anddirectingtheeffortsoftheengagementteam.These

matters were addressed in the context of our audit of the financial

statementsasawhole,andinformingouropinionthereon,andwe

donotprovideaseparateopiniononthesematters.

117

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Independent auditor’s report (continued)

Overview

Key audit matter How the scope of our audit addressed the key audit matter

Valuation of

unquoted private

capital investments

The Group’s accounting

policy for valuation is

described in the

Significant Accounting

Policies (Investments)

and Note 8 to the

financial statements.

Theunquotedprivate

capitalinvestmentstotal

£820.3million(2023:

£824.0million),

representing30.4%

(2023:29.5%)ofthe

investmentsheldatfair

valuethroughprofitor

loss.

Weconsiderthevaluationsofthe

privatecapitalinvestmentstobe

one of the most significant audit

areas.AnobjectiveoftheGroupis

to maximise long-term capital

growth,andassuch,privatecapital

investmentswillbeakeydriverof

performance.

The main risk factor relating to the

valuationsoftheprivatecapital

investmentsrelatestothelackof

observableinputstothose

valuations,whichclassifiesthemas

‘Level3’investmentsaswellasthe

levelofestimationuncertainty

involvedinvaluingthese

investments.

Toaddressthiskeyauditmatter,we:

1.Assessedtheappropriatenessofthevaluationmethodologygiventhecircumstances

undertheInternationalPrivateEquityandVentureCapitalValuation(“IPEV”)Guidelines;

2.Discussedvaluationswithmanagementtounderstandmanagementassumptions

includedinvaluationsandassessthereasonablenessoftheassumptionsapplied;

3.Challengedandcorroboratedthekeyinputstothevaluationwithreferenceto

managementinformationoninvesteecompanies,marketdataandourownresearch;

4.Gainedanunderstandingofthemovementsinvaluationsbetween31March2023and

31March2024;

5.Consideredtheeconomicenvironmentinwhichtheinvestmentoperatestoidentify

factorsthatcouldimpacttheinvestmentvaluation;

6.AttendedValuationsCommitteemeetingstoobtainevidenceofgovernanceoverthe

valuationprocessandobservechallengesfromthemembersoftheCommitteeonthe

inputsinthevaluationpreparation;

7.ConsultedandinvolvedBDOvaluationexpertsinassessingthemethodology,assumptions

andkeyinputsusedinthevaluationofmaterialinvestmentsatyear-end;and

8.Whereweconcludedreasonablealternativeassumptionscouldhavebeenapplied,we

developedourownpointestimatewhichweassessedinthecontextofmateriality.

9.Wegainedcomfortonownershipthroughavailablethirdpartydocumentationsuchas

sharepurchaseagreements,sharecertificates,annualaccountsandcompanieshouse

documentation,whererelevant.

Key observations:

Basedontheproceduresweperformed,wedidnotidentifyanymaterialexceptionswith

regardstothevaluationofunquotedprivatecapitalinvestments.Wedeemtheassumptions

andjudgementsappliedbymanagementinthevaluationofunquotedprivatecapital

investmentstobeappropriate.

Valuation of fund

investments

The Group’s accounting

policy for valuation is

described in the

Significant Accounting

Policies (Investments)

and Note 8 to the

financial statements.

The unquoted fund

investmentstotal£926.3

million(2023:£873.8

million),representing

34.4%(2023:31.3%)of

theinvestmentsheldat

fairvaluethroughprofit

orloss.

There is a risk of ‘stale pricing’ due

totheavailabilityofNAV

statements and the time lag

between the date that statements

relate to and the balance sheet

date.

Thereisalsoariskoverincorrect

GeneralPartner("GP")statements

beingreceivedfromtheunderlying

fundinvestments,aswellasthe

reliabilityofGPstatements,which

couldresultinincorrectvaluations

offundinvestmentsatyearend.

Toaddressthiskeyauditmatter,we:

1.Consideredtheappropriatenessoftheoverallvaluationpoliciesundertakenbyunderlying

GPfundmanagersinlinewiththeInternationalPrivateEquityandVentureCapitalValuation

(“IPEV”)Guidelines;

2.ObtainedanunderstandingoftheCompany’sprocessessurroundingthevaluationand

ownershipbyperformingwalkthroughprocedurestoobservetheinvestmentprocesses;

3.Assessedthedesignandimplementationoffundinvestmentvaluationprocessesbyattending

theInvestmentManager’sValuationCommitteemeetingtoobservereviewoffundinvestment

valuations;

4.Comparedtheyear-endvaluationspertheaccountingrecordstothevaluationstatements

receivedfromthemanagersoftheunderlyingfunds.Whereanup-to-datefundmanager’s

valuationisnotavailable,weagreedthecashrollforwardtodirectconfirmationfromtheGP;

5.ReviewedtheneedfortheInvestmentManagertoadjusttheunderlyingvaluationsfor

specificcases,suchascarriedinterest,andagreedtheseadjustmentstotheunderlying

support;

6.TestedtheaccuracyoftheunderlyingGPs’valuationprocessbycomparingtheNetAsset

ValueperthemostrecentauditedfinancialstatementsforallavailablefundstotheGP

statement for the coterminous period in order to determine the reliability of the year end GP

reports.Wedeterminedwhethertheauditfirmsigningthefinancialstatementswasa

recognised audit firm and checked whether there were any modifications made to their

auditreports;

7.ReviewedtheyearendGPstatementsforanypossibleinconsistentinformationpertainingto

thevaluations;

8.Fornon-coterminousGPstatements,assessedwhetheranysignificantmarketmovements

oreventsoccurredfromtheGPstatementdatethatwouldrendertheGPstatementas

inappropriatebasisofthevaluation;

9.Wheretherehasbeensaleoffundinvestmentsintheyear,weagreedtheproceedsofthe

disposal to the GP statements and performed back testing by comparing the sale price and

subsequentcashreceiptstothemostrecentvaluationrecordedbytheCompanyforthe

investment;

10.ReviewedfinalNAVstatementsreceivedoverthecourseoftheauditperioduptothedate

ofapprovingthefinancialstatementsandconsideredtheimpactonthevaluations;and

11.Gainedcomfortoverownershipbyobtainingdirectconfirmationsfrom100%ofthe

underlyingGPsintheportfolioatyear-end.

Key observations:

Basedontheproceduresweperformed,wedidnotidentifyanymaterialexceptionswithregards

tothevaluationoffundinvestments.Wedeemtheassumptionsandjudgementsappliedby

managementinthevaluationofunquotedprivatecapitalinvestmentstobeappropriate.

118 Caledonia Investments plc Annual Report 2024

Component materiality

ForthepurposesofourGroupauditopinion,wesetmateriality

foreachsignificantcomponentoftheGroup.Component

materialitywasrangedfrom£650kto£42m(2023:£5kto£39m)

basedonthematerialitylevelssetforcomponents’individual

entityaudits,whilealsoconsideringthesizeandourriskof

material misstatement of that component and capping its

materialitylevelwhererelevanttotakeintoconsideration

aggregationrisk.Intheauditofeachsignificantcomponent,we

furtherappliedperformancematerialitylevelsof75%(2023:

75%)ofthecomponentmaterialitytoourtestingtoensurethat

the risk of errors exceeding component materiality was

appropriatelymitigated.

Reporting threshold

We agreed with the Audit Committee that we would report to

themallindividualauditdifferencesinexcessof£1.1million

(2023:£1million).Wealsoagreedtoreportdifferencesbelow

thisthresholdthat,inourview,warrantedreportingon

qualitativegrounds.

Other information

Thedirectorsareresponsiblefortheotherinformation.Theother

information comprises the information included in the annual

report other than the financial statements and our auditor’s report

thereon.Ouropiniononthefinancialstatementsdoesnotcover

theotherinformationand,excepttotheextentotherwiseexplicitly

statedinourreport,wedonotexpressanyformofassurance

conclusionthereon.Ourresponsibilityistoreadtheother

informationand,indoingso,considerwhethertheother

information is materially inconsistent with the financial statements

orourknowledgeobtainedinthecourseoftheaudit,orotherwise

appearstobemateriallymisstated.Ifweidentifysuchmaterial

inconsistenciesorapparentmaterialmisstatements,weare

requiredtodeterminewhetherthisgivesrisetoamaterial

misstatementinthefinancialstatementsthemselves.If,basedon

theworkwehaveperformed,weconcludethatthereisamaterial

misstatementofthisotherinformation,wearerequiredtoreport

thatfact.

Wehavenothingtoreportinthisregard.

Our application of materiality

Weapplytheconceptofmaterialitybothinplanningandperformingouraudit,andinevaluatingtheeffectofmisstatements.Weconsider

materialitytobethemagnitudebywhichmisstatements,includingomissions,couldinfluencetheeconomicdecisionsofreasonableusers

thataretakenonthebasisofthefinancialstatements.

Inordertoreducetoanappropriatelylowleveltheprobabilitythatanymisstatementsexceedmateriality,weusealowermaterialitylevel,

performancemateriality,todeterminetheextentoftestingneeded.Importantly,misstatementsbelowtheselevelswillnotnecessarilybe

evaluatedasimmaterialaswealsotakeaccountofthenatureofidentifiedmisstatements,andtheparticularcircumstancesoftheir

occurrence,whenevaluatingtheireffectonthefinancialstatementsasawhole.

Basedonourprofessionaljudgement,wedeterminedmaterialityforthefinancialstatementsasawholeandperformancemateriality

asfollows:

Group financial statements Parent company financial statements

Key audit matter

2024

£m

2023

£m

2024

£m

2023

£m

Materiality 44.5 41.8 42.3 39.7

Basis for determining materiality 1.5%ofNetAssets 1.5%ofNetAssets 95%ofGroupmateriality 95%ofGroupmateriality

Rationale for the

benchmark applied

Net Asset Value is a key indicator of performance and as

suchthemostrelevantbenchmarkonwhichtobase

materialityfortheusersofthefinancialstatements.

We considered the aggregation risk within the Group

and then set materiality as a percentage of Group

materiality.

Performance materiality 33.6 31.4 31.7 29.8

Basis for determining

performance materiality

75%ofMateriality 75%ofMateriality

Rationale for the percentage

applied for performance

materiality

Thelevelofperformancematerialityappliedwassetafterhavingconsideredanumberoffactors,includingour

assessmentoftheGroupandparent’scontrolenvironmentandtheexpectedtotalvalueofknownandlikely

misstatementsandtheleveloftransactionsintheyear.

119

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Independent auditor’s report (continued)

Corporate governance statement

TheListingRulesrequireustoreviewtheDirectors’statementin

relationtogoingconcern,longer-termviabilityandthatpartofthe

CorporateGovernanceStatementrelatingtotheparentcompany’s

compliancewiththeprovisionsoftheUKCorporateGovernance

Codespecifiedforourreview.

Basedontheworkundertakenaspartofouraudit,wehave

concluded that each of the following elements of the Corporate

GovernanceStatementismateriallyconsistentwiththefinancial

statementsorourknowledgeobtainedduringtheaudit.

Going concern

and longer-term

viability

• The Directors’ statement with regards to the

appropriateness of adopting the going concern

basis of accounting and any material

uncertaintiesidentifiedsetoutonpage62;

and

• The Directors’ explanation as to their

assessmentoftheGroup’sprospects,the

periodthisassessmentcoversandwhythe

periodisappropriatesetoutonpage62.

Other Code

provisions

• Directors’statementonfair,balancedand

understandablesetoutonpage86;

• Board’s confirmation that it has carried out a

robust assessment of the emerging and

principalriskssetoutonpage86;

• The section of the annual report that describes

thereviewofeffectivenessofriskmanagement

and internal control systems set out on page

86;and

• The section describing the work of the audit

committeesetoutonpage86.

Other Companies Act 2006 reporting

Based on the responsibilities described below and our work

performedduringthecourseoftheaudit,wearerequiredbythe

CompaniesAct2006andISAs(UK)toreportoncertainopinions

andmattersasdescribedbelow.

Strategic report

and Directors’

report

Inouropinion,basedontheworkundertaken

inthecourseoftheaudit:

• theinformationgivenintheStrategicreport

and the Directors’ report for the financial

year for which the financial statements are

prepared is consistent with the financial

statements;and

• the Strategic report and the Directors’ report

havebeenpreparedinaccordancewith

applicablelegalrequirements.

In the light of the knowledge and understanding

of the Group and Parent Company and its

environmentobtainedinthecourseoftheaudit,

wehavenotidentifiedmaterialmisstatements

inthestrategicreportortheDirectors’report.

Directors’

remuneration

Inouropinion,thepartoftheDirectors’

remuneration report to be audited has been

properly prepared in accordance with the

CompaniesAct2006.

Matters on which

we are required

to report by

exception

Wehavenothingtoreportinrespectofthe

following matters in relation to which the

CompaniesAct2006requiresustoreportto

youif,inouropinion:

• adequateaccountingrecordshavenotbeen

keptbytheParentCompany,orreturns

adequateforouraudithavenotbeenreceived

frombranchesnotvisitedbyus;or

• the Parent Company financial statements and

the part of the Directors’ remuneration report

to be audited are not in agreement with the

accountingrecordsandreturns;or

• certain disclosures of Directors’ remuneration

specifiedbylawarenotmade;or

• wehavenotreceivedalltheinformation

andexplanationswerequireforouraudit.

Responsibilities of Directors

As explained more fully in the Statement of Directors’

Responsibilities,theDirectorsareresponsibleforthepreparation

ofthefinancialstatementsandforbeingsatisfiedthattheygive

atrueandfairview,andforsuchinternalcontrolastheDirectors

determine is necessary to enable the preparation of financial

statementsthatarefreefrommaterialmisstatement,whether

duetofraudorerror.

Inpreparingthefinancialstatements,theDirectorsareresponsible

for assessing the Group’s and the Parent Company’s ability to

continueasagoingconcern,disclosing,asapplicable,matters

related to going concern and using the going concern basis of

accounting unless the Directors either intend to liquidate the

GrouportheParentCompanyortoceaseoperations,orhave

norealisticalternativebuttodoso.

120 Caledonia Investments plc Annual Report 2024

Auditor’s responsibilities for the audit of the

financial statements

Ourobjectivesaretoobtainreasonableassuranceabout

whether the financial statements as a whole are free from material

misstatement,whetherduetofraudorerror,andtoissuean

auditor’sreportthatincludesouropinion.Reasonableassurance

isahighlevelofassurance,butisnotaguaranteethatanaudit

conductedinaccordancewithISAs(UK)willalwaysdetecta

materialmisstatementwhenitexists.Misstatementscanarise

fromfraudorerrorandareconsideredmaterialif,individuallyor

intheaggregate,theycouldreasonablybeexpectedtoinfluence

the economic decisions of users taken on the basis of these

financialstatements.

Extent to which the audit was capable of detecting irregularities,

including fraud

Irregularities,includingfraud,areinstancesofnon-compliance

withlawsandregulations.Wedesignproceduresinlinewithour

responsibilities,outlinedabove,todetectmaterialmisstatements

inrespectofirregularities,includingfraud.Theextenttowhichour

proceduresarecapableofdetectingirregularities,includingfraudis

detailedbelow:

Non-compliance with laws and regulation

Basedon:

•OurunderstandingoftheGroupandtheindustryinwhichit

operates;

• Discussion with management and those charged with

governance;

•ObtaininganunderstandingoftheGroup’spoliciesand

proceduresregardingcompliancewithlawsandregulations;and

• Consideration of the risk of acts by the Group which were

contrarytoapplicablelawsandregulations,includingfraud.

We considered the significant laws and regulations to be

compliancewiththeCompaniesAct2006,UK-adoptedIFRS,UKtax

legislation,theFinancialConductAuthority’sregulationsandListing

andDTRrules,theUKCorporateGovernanceCode,andindustry

practice as represented by the AIC Statement of Recommended

Practice(SORP).

Wefocusedonlawsandregulationsthatcouldgiverisetoa

materialmisstatementinthefinancialstatements.Ourprocedures

included:

•Reviewofminutesofmeetingofthosechargedwithgovernance

foranyinstancesofnon-compliancewithlawsandregulations;

•Reviewofcorrespondencewithregulatoryandtaxauthoritiesfor

anyinstancesofnon-compliancewithlawsandregulations;

•Reviewoffinancialstatementdisclosuresandagreeingto

supportingdocumentation;

•Involvementoftaxspecialistsintheaudit;and

•Reviewandchallengeofmanagement’sconsiderationofthe

ParentCompany’scompliancewiththeInvestmentTrustrulesset

outunderUKtaxlegislation.

Fraud

We assessed the susceptibility of the financial statements to

materialmisstatement,includingfraud.Ourriskassessment

proceduresincluded:

• Enquirywithmanagementandthosechargedwithgovernance

regardinganyknownorsuspectedinstancesoffraud;

• ObtaininganunderstandingoftheGroup’spoliciesand

proceduresrelatingto:

- Detectingandrespondingtotherisksoffraud;and

- Internalcontrolsestablishedtomitigaterisksrelatedtofraud.

• Reviewofminutesofmeetingofthosechargedwithgovernance

foranyknownorsuspectedinstancesoffraud;

• Discussion amongst the engagement team as to how and

wherefraudmightoccurinthefinancialstatements;

• Performing analytical procedures to identify any unusual or

unexpected relationships that may indicate risks of material

misstatementduetofraud;and

• Consideringremunerationincentiveschemesand

performance targets and the related financial statement

areasimpactedbythese.

121

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Independent auditor’s report (continued)

Basedonourriskassessment,weconsideredtheareasmost

susceptibletofraudtobemanagementoverrideofcontrolsand

valuationofprivatecapitalandfundinvestments.

Ourproceduresinrespectoftheaboveincluded:

• Testingthedataelementsofthejournalspopulationwhichthe

auditteamutilisedaspartofcompletenessandaccuracytesting;

• Determining key risk characteristics to filter the population of

journals,thenreviewingandagreeingthejournalsidentifiedto

supportingdocumentation;

• Using our IT audit specialists to assist with extracting the

journalpopulation;

•Evaluatingfindingsfromtheevaluationofthedesignand

implementationofITgeneralcontrols;

•Criticallyreviewingtheconsolidationand,inparticular,

manualand/orlatejournalspostedatconsolidationlevel;

•Reviewingtheestimatesandjudgementsappliedbymanagement

in the financial statements to assess their appropriateness and the

existenceofanysystembiases.Thisincludedconsideringwhether

thesplitbetweenrevenueandcapitalisappropriateandkey

accountingestimatesaroundthevaluationofprivatecapitaland

fundinvestments;

•Reviewingunadjustedauditdifferencesforindicationsofbiasor

deliberatemisstatement;and

•Otherkeyproceduresrelatedtovaluationofprivatecapitaland

fundinvestmentsaresetoutintheKeyAuditMatters section

above.

Wealsocommunicatedrelevantidentifiedlawsandregulations

and potential fraud risks to all engagement team members who

werealldeemedtohaveappropriatecompetenceandcapabilities

and remained alert to any indications of fraud or non-compliance

withlawsandregulationsthroughouttheaudit.

Ourauditproceduresweredesignedtorespondtorisksofmaterial

misstatementinthefinancialstatements,recognisingthattherisk

of not detecting a material misstatement due to fraud is higher

thantheriskofnotdetectingoneresultingfromerror,asfraud

mayinvolvedeliberateconcealmentby,forexample,forgery,

misrepresentationsorthroughcollusion.Thereareinherent

limitations in the audit procedures performed and the further

removednon-compliancewithlawsandregulationsisfromthe

eventsandtransactionsreflectedinthefinancialstatements,

thelesslikelywearetobecomeawareofit.

Afurtherdescriptionofourresponsibilitiesisavailableon

theFinancialReportingCouncil’swebsiteat:

www.frc.org.uk/auditorsresponsibilities.Thisdescriptionforms

partofourauditor’sreport.

Use of our report

ThisreportismadesolelytotheParentCompany’smembers,as

abody,inaccordancewithChapter3ofPart16oftheCompanies

Act2006.Ourauditworkhasbeenundertakensothatwemight

state to the Parent Company’s members those matters we are

required to state to them in an auditor’s report and for no other

purpose.Tothefullestextentpermittedbylaw,wedonotaccept

or assume responsibility to anyone other than the Parent Company

andtheParentCompany’smembersasabody,forourauditwork,

forthisreport,orfortheopinionswehaveformed.

Peter Smith

Senior Statutory Auditor

ForandonbehalfofBDOLLP,StatutoryAuditor

London,UK

20May2024

BDOLLPisalimitedliabilitypartnershipregisteredinEnglandand

Wales(withregisterednumberOC305127).

122 Caledonia Investments plc Annual Report 2024

123

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Group statement of comprehensive income

for the year ended 31 March 2024

			2024			2023
		Revenue	Capital	Total	Revenue	Capital	Total
	Note	£m	£m	£m	£m	£m	£m
Revenue
Investmentincome	1	61.8	–	61.8	43.2	–	43.2
Otherincome	1	0.9	0.6	1.5	0.8	1.3	2.1
Netgainsonfairvalueinvestments	8	–	174.4	174.4	–	133.0	133.0
Netlossesonfairvalueproperty	9,10	–	(3.9)	(3.9)	–	(1.4)	(1.4)
Totalrevenue		62.7	171.1	233.8	44.0	132.9	176.9
Managementexpenses	2	(22.9)	(8.4)	(31.3)	(21.3)	(8.6)	(29.9)
Profit before finance costs		39.8	162.7	202.5	22.7	124.3	147.0
Treasuryinterestreceivable	3	3.2	–	3.2	4.6	–	4.6
Finance costs	4	(10.6)	–	(10.6)	(2.4)	–	(2.4)
Exchangemovements		6.3	–	6.3	–	–	–
Profit before tax		38.7	162.7	201.4	24.9	124.3	149.2
Taxation	5	1.8	0.6	2.4	(4.3)	(2.0)	(6.3)
Profit for the year		40.5	163.3	203.8	20.6	122.3	142.9
Other comprehensive income items never to be reclassified to profit or loss
Re-measurements of defined benefit pension schemes	25	–	(0.8)	(0.8)	–	1.4	1.4
Taxonothercomprehensiveincome	5	–	0.4	0.4	–	(0.3)	(0.3)
Totalcomprehensiveincome		40.5	162.9	203.4	20.6	123.4	144.0
Basic earnings per share	7	74.5p	300.2p	374.7p	37.9p	225.3p	263.2p
Diluted earnings per share	7	73.3p	295.7p	369.0p	37.3p	221.7p	259.0p

Thetotalcolumnoftheabovestatementrepresentsthegroup’sstatementofcomprehensiveincome,preparedinaccordancewithIFRSs

adoptedintheUnitedKingdom.

Therevenueandcapitalcolumnsaresupplementarytothegroup’sstatementofcomprehensiveincomeandarepreparedunderguidance

publishedbytheAssociationofInvestmentCompanies.

Theprofitfortheyearandtotalcomprehensiveincomefortheyearisattributabletoequityholdersoftheparent.

Theaccountingpoliciesandnotesonpages128to151areanintegralpartofthesefinancialstatements.

124 Caledonia Investments plc Annual Report 2024

Statement of financial position

at 31 March 2024

		Group			Company
		2024	2023	2024	2023
	Note	£m	£m	£m	£m
Non-current assets
Investmentsheldatfairvaluethroughprofitorloss	8	2,695.4	2,794.9	2,700.7	2,803.2
Investmentsinsubsidiariesheldatcost	8	–	–	0.9	0.9
Investmentproperty	9	13.3	15.1	–	–
Property,plantandequipment	10	25.2	27.9	–	–
Deferred tax assets	11	5.3	5.7	–	–
Otherreceivables	12	–	–	35.5	37.1
Employee benefits	25	4.3	4.0	–	–
Non-current assets		2,743.5	2,847.6	2,737.1	2,841.2
Current assets
Asset held for sale	8	19.0	–	19.0	–
Tradeandotherreceivables	12	7.3	6.9	5.0	3.1
Current tax assets	5	1.7	19.3	2.0	20.3
Cashandcashequivalents	13	227.4	221.6	227.3	221.1
Current assets		255.4	247.8	253.3	244.5
Total assets		2,998.9	3,095.4	2,990.4	3,085.7
Current liabilities
Interest bearing loans and borrowings	14	–	(266.0)	–	(266.0)
Trade and other payables	15	(24.4)	(22.1)	(38.2)	(33.8)
Employee benefits	25	(3.1)	(2.4)	–	–
Current liabilities		(27.5)	(290.5)	(38.2)	(299.8)
Non-current liabilities
Employee benefits	25	(5.0)	(5.1)	–	–
Deferred tax liabilities	11	(1.1)	(1.8)	–	–
Non-current liabilities		(6.1)	(6.9)	–	–
Total liabilities		(33.6)	(297.4)	(38.2)	(299.8)
Net assets		2,965.3	2,798.0	2,952.2	2,785.9
Equity
Share capital	16	3.1	3.1	3.1	3.1
Share premium	16	1.3	1.3	1.3	1.3
Capitalredemptionreserve		1.4	1.4	1.4	1.4
Capitalreserve		2,716.6	2,555.4	2,717.1	2,554.3
Retained earnings		250.2	247.4	236.6	236.4
Ownshares		(7.3)	(10.6)	(7.3)	(10.6)
Total equity		2,965.3	2,798.0	2,952.2	2,785.9
Undilutednetassetvalue	17	5452p	5150p
Dilutednetassetvalue	17	5369p	5068p

TheCompanyprofitfortheyearended31March2024was£202.4m(2023:£144.8m)

The financial statements on pages 124 to 151 were approved by the board and authorised for issue on 20 May 2024 and were signed on its

behalf by:

Mat Masters Rob Memmott

Chief Executive Officer Chief Financial Officer

Theaccountingpoliciesandnotesonpages128to151areanintegralpartofthesefinancialstatements.

125

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Statement of changes in equity

for the year ended 31 March 2024

Note

				Capital
		Share	Share	redemption	Capital	Retained	Own	Total
		capital	premium	reserve	reserve	earnings	shares	equity
		£m	£m	£m	£m	£m	£m	£m
Group
Balanceat31March2022		3.1	1.3	1.4	2,527.0	263.2	(13.3)	2,782.7
Total comprehensive income
Profit for the year		–	–	–	122.3	20.6	–	142.9
Othercomprehensiveincome		–	–	–	1.1	–	–	1.1
Totalcomprehensiveincome		–	–	–	123.4	20.6	–	144.0
Transactions with owners of the company
Contributions by and distributions to owners
Share-based payments		–	–	–	–	5.8	–	5.8
Transfer of shares to employees		–	–	–	–	(6.7)	6.7	–
Ownsharespurchased		–	–	–	–	–	(4.0)	(4.0)
Dividendspaid	6	–	–	–	(95.0)	(35.5)	–	(130.5)
Total transactions with owners		–	–	–	(95.0)	(36.4)	2.7	(128.7)
Balanceat31March2023		3.1	1.3	1.4	2,555.4	247.4	(10.6)	2,798.0
Total comprehensive income
Profit for the year		–	–	–	163.3	40.5	–	203.8
Othercomprehensiveincome		–	–	–	(0.4)	–	–	(0.4)
Totalcomprehensiveincome		–	–	–	162.9	40.5	–	203.4
Transactions with owners of the company
Contributions by and distributions to owners
Share-based payments		–	–	–	–	6.2	–	6.2
Transfer of shares to employees		–	–	–	–	(6.9)	6.9	–
Ownsharespurchasedandcancelled		–	–	–	(1.7)	–	–	(1.7)
Ownsharespurchased		–	–	–	–	–	(3.6)	(3.6)
Dividendspaid	6	–	–	–	–	(37.0)	–	(37.0)
Total transactions with owners		–	–	–	(1.7)	(37.7)	3.3	(36.1)
Balanceat31March2024		3.1	1.3	1.4	2,716.6	250.2	(7.3)	2,965.3

Company

Balanceat31March2022 3.1 1.3 1.4 2,526.0 251.3 (13.3) 2,769.8

Profitandtotalcomprehensiveincome – – – 123.3 21.5 – 144.8

Transactions with owners of the company

Contributions by and distributions to owners

Share-based payments – – – – 5.8 – 5.8

Transfer of shares to employees – – – – (6.7) 6.7 –

Ownsharespurchased – – – – – (4.0) (4.0)

Dividendspaid 6 – – – (95.0) (35.5) – (130.5)

Total transactions with owners – – – (95.0) (36.4) 2.7 (128.7)

Balanceat31March2023 3.1 1.3 1.4 2,554.3 236.4 (10.6) 2,785.9

Profitandtotalcomprehensiveincome – – – 164.5 37.9 – 202.4

Transactions with owners of the company

Contributions by and distributions to owners

Share-based payments – – – – 6.2 – 6.2

Transfer of shares to employees – – – – (6.9) 6.9 –

Ownsharespurchasedandcancelled – – – (1.7) – – (1.7)

Ownsharespurchased – – – – – (3.6) (3.6)

Dividendspaid 6 – – – – (37.0) – (37.0)

Total transactions with owners – – – (1.7) (37.7) 3.3 (36.1)

Balanceat31March2024 3.1 1.3 1.4 2,717.1 236.6 (7.3) 2,952.2

Theaccountingpoliciesandnotesonpages128to151areanintegralpartofthesefinancialstatements.

126 Caledonia Investments plc Annual Report 2024

Statement of cash flows

for the year ended 31 March 2024

Reconciliation of net cash flow to movement in net debt

for the year ended 31 March 2024

		Group		Company
		2024	2023	2024	2023
	Note	£m	£m	£m	£m
Operating activities
Dividendsreceived		57.9	41.6	57.9	44.5
Interestreceived		3.8	6.5	3.8	6.5
Cashreceivedfromcustomers		1.5	2.6	0.6	1.8
Cash paid to suppliers and employees		(24.5)	(25.3)	(24.7)	(28.2)
Taxesreceived		0.1	0.1	0.1	0.1
Grouptaxreliefreceived		20.9	2.0	21.1	2.1
Group tax relief paid		(0.8)	–	–	(0.1)
Netcashflowfromoperatingactivities		58.9	27.5	58.8	26.7
Investing activities
Purchasesofinvestments		(340.8)	(468.1)	(340.8)	(468.1)
Proceedsfromdisposalofinvestments		599.7	192.1	599.7	192.1
Purchasesofproperty,plantandequipment		(0.5)	(0.3)	–	–
Netcashflowfrom/(usedin)investingactivities		258.4	(276.3)	258.9	(276.0)
Financing activities
Interest paid		(10.4)	(2.2)	(10.4)	(2.0)
Dividendspaidtoownersofthecompany		(37.0)	(130.5)	(37.0)	(130.5)
Proceeds from bank borrowings		70.0	–	70.0	–
Proceeds from group borrowings		–	266.0	–	283.7
Repayment of bank borrowings		(70.0)	–	(70.0)	–
Loanpaymentstosubsidiaries		(258.8)	–	(258.8)	(17.8)
Purchases of own shares		(5.3)	(4.0)	(5.3)	(4.0)
Netcashflow(usedin)/fromfinancingactivities		(311.5)	129.3	(311.5)	129.4
Netincrease/(decrease)incashandcashequivalents		5.8	(119.5)	6.2	(119.9)
Cashandcashequivalentsatyearstart		221.6	341.1	221.1	341.0
Cashandcashequivalentsatyearend	13	227.4	221.6	227.3	221.1

Group Company

2024

£m

2023

£m

2024

£m

2023

£m

Netincrease/(decrease)incashandcashequivalentsintheyear 5.8 (119.5) 6.2 (119.9)

Cash inflow from increase in borrowings (70.0) (266.0) (70.0) (283.7)

Cash outflow from decrease in borrowings 328.8 – 328.8 17.8

Change in net debt resulting from cash flows 264.6 (385.5) 265.0 (385.8)

Changeinnetdebtresultingfromforeignexchangemovements 7.2 – 7.2 (0.1)

Net(debt)/cashatthestartoftheyear (44.4) 341.1 (44.9) 341.0

Netcash/(debt)attheendoftheyear 227.4 (44.4) 227.3 (44.9)

Theaccountingpoliciesandnotesonpages128to151areanintegralpartofthesefinancialstatements.

127

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Material accounting policies

General information

Caledonia Investments plc is an investment trust company

domiciled in the United Kingdom and incorporated in England in

1928, under number 235481. The address of its registered office

is Cayzer House, 30 Buckingham Gate, London SW1E 6NN. The

ordinary shares of the company are premium listed on the London

Stock Exchange.

These financial statements were authorised for issue by the

directors on 20 May 2024.

These financial statements are presented in pounds Sterling, as

this is the currency of the primary economic environment in which

Caledonia operates.

Material accounting policies

Critical accounting judgements and estimates

Critical judgements

In the course of preparing the financial statements, one judgement

has been made in the process of applying the group’s accounting

policies, other than those involving estimations, that has had a

significant effect on the amounts recognised in the financial

statements as follows:

1. Assessment as an investment entity

The board has concluded that the company continues to meet

the definition of an investment entity, as its strategic objective

of investing in a portfolio of investments for the purpose of

generating returns in the form of income and capital

appreciation remains unchanged. The company is exempt from

UK corporation tax on capital gains provided it meets the HM

Revenue & Customs criteria for an investment company set out

in Section 1158 of the Corporation Tax Act 2010. This is

judgemental based on assessments performed by management

prepared to maintain investment trust status in accordance with

relevant taxation legislation.

Critical estimates

In addition to this significant judgement the directors have made

one estimate, which they deem to have a significant risk of resulting

in a material adjustment to the amounts recognised in the financial

statements within the next financial year. The details of the

estimate was as follows:

1. Fair values of private equity financial instruments

For directly owned private investments (Private Capital

investments), totalling £820.3m (2023: £824.0m) valuation

techniques using a range of internally and externally developed

unobservable inputs are used to estimate fair value. Valuation

techniques make maximum use of market inputs, including

reference to the current fair values of instruments that are

substantially the same (subject to appropriate adjustments).

Private Capital assets have been disaggregated into categories

and sensitised according to the degree of uncertainty attached

to their estimation in note 23.

For private equity fund investments (unlisted Funds Pool

investments), totalling £898.8m (2023: £869.0m) held through

externally managed fund vehicles, the estimated fair value is

based on the most recent valuation provided by the external

manager, usually received within 3-6 months of the relevant

valuation date. Management periodically assesses whether

reported net asset values are fair value based through

consideration of a range of information, including but not limited

to underlying valuation methodologies, governance and assurance

frameworks, and correspondence with third-party managers.

Management were satisfied that the valuations provided in the

current period were on a fair value basis.

Where required, valuations are adjusted for investments and

distributions between the valuation date and the reporting date.

The delay in manager NAV receipts creates a risk of changes or

events occurring between the NAV and reporting dates which

could impact valuations.

Fair value estimates for the above private assets are made at a

specific point in time, based on market conditions and information

about the financial instrument. These estimates are subjective

in nature, and involve uncertainties and matters of significant

judgement and therefore cannot be determined with precision.

Other judgement

Management has exercised judgement in determining the

classification of money market investments held by the group

as cash equivalents under IAS 7. In arriving at this judgement,

management has noted that it uses money market funds to

manage day-to-day working capital requirements, and that all such

funds are highly liquid Low Volatility Net Asset Value products with

a minimum credit rating of AAAm, and a maximum weighted-

average maturity of 60 days. They have therefore judged that the

risk of changes in value is insignificant and investments can be

readily converted to a known amount of cash upon redemption,

and therefore classification as cash equivalents is appropriate. They

note that, although remote, there is not a zero risk of significant

change in value and that therefore this classification is judgemental.

Going concern

As at 31 March 2024, the board has undertaken an assessment

of the appropriateness of preparing its financial statements on

a going concern basis, taking into consideration future cash flows,

current cash holdings of £227m, undrawn banking facilities of

£250m and readily realisable assets of £950m as part of a

wider process in connection with its viability assessment. It has

concluded that the group has sufficient cash, other liquid resources

and committed bank facilities to meet existing and new

investment commitments.

The directors have concluded that the group has adequate

resources to continue in operational existence for a period of

at least 12 months from the date of approval of the financial

statements. Accordingly, they continue to consider it

appropriate to adopt the going concern basis in preparing

the financial statements.

The group has conducted a going concern assessment which

considered future cash flows, the availability of liquid assets and

debt facilities, banking covenant requirements (see note 14) and

consideration of the economic environment over at least 12

months from the date of approval of these financial statements.

In making this assessment a number of stress scenarios were

developed, factoring in (a) adverse foreign exchange movements,

(b) a delay in disposals of directly owned private equity

investments, (c) drawdown of all existing private equity fund

commitments, (d) a significant market decline for two years and

(e) the cumulative impact of (c) and (d) above.

128 Caledonia Investments plc Annual Report 2024

Under these scenarios the group would have a range of mitigating

actions available to it, including sales of liquid assets, and usage of

banking facilities, which would provide sufficient funds to meet all

of its liabilities as they fall due and still hold significant liquid assets

over the assessment period. As a result of this assessment, the

directors are confident that the company will have sufficient funds

to continue to meet its liabilities as they fall due for at least 12

months from the date of approval of the financial statements

and therefore have prepared the financial statements on a going

concern basis. For further details on assessment of going concern

and viability, please refer to page 62.

Basis of accounting

These group and parent company financial statements were

prepared in accordance with UK-adopted international accounting

standards in conformity with the requirements of the Companies

Act 2006. IFRSs comprise accounting standards issued by the

International Accounting Standards Board and its predecessor body

as well as interpretations issued by the International Financial

Reporting Interpretations Committee and its predecessor body.

The financial statements have been prepared on an historical cost

basis, except for the revaluation of certain financial instruments

and properties. Where presentational guidance set out in the

Statement of Recommended Practice: Financial Statements of

Investment Trust Companies and Venture Capital Trusts (‘SORP’)

issued by the Association of Investment Companies in October

2019 is consistent with the requirements of UK-adopted

international accounting standards, the directors have sought

to prepare the financial statements on a basis compliant with the

recommendations of the SORP.

The Statement of comprehensive income of the company has been

omitted from these financial statements in accordance with

section 408 of the Companies Act 2006.

Under the UK Corporate Governance Code and applicable

regulations, the directors are required to satisfy themselves that it

is reasonable to presume that the company is a going concern.

After reviewing the company’s performance projections for a

period of at least 12 months, the directors are satisfied that in

taking account of reasonably possible downsides the company has

adequate access to resources to enable it to meet its obligations as

they fall due for at least 12 months from the date of approval of the

financial statements. Accordingly, the directors have adopted the

going concern basis in preparing these financial statements.

Adopted IFRSs and IFRSs not yet applied

In the current year, the group has not adopted any new standards

or interpretations. Amendments to IFRS adopted in the year have

not had a material impact on the group.

At the date of approval of these financial statements, there were

no standards, which had not been applied in these financial

statements, in issue but not yet effective.

Assessment as investment entity

Entities that meet the definition of an investment entity within IFRS

10 are required to account for most investments in controlled

entities as held at fair value through profit or loss. Subsidiaries that

provide investment related services or engage in permitted

investment-related activities with investees continue to be

consolidated unless they are also investment entities.

Having considered the following, the board has concluded that the

company meets the definition of an investment entity.

An investment entity is one which:

• obtains funds from investors for the purpose of providing

them with investment management services

• invests funds solely for returns from capital appreciation

and/or investment income

• measures and evaluates the performance of substantially

all of its investments on a fair value basis.

Basis of consolidation

In accordance with the IFRS 10/IAS 28 Investment entities

amendments, the consolidated financial statements include the

financial statements of the company and service entities controlled

by the company made up to the reporting date. Control is achieved

where the company has the power over the potential investee as a

result of voting or other rights, has rights to positive or negative

variable returns from its involvement with the investee and has the

ability to use its power over the investee to affect significantly the

amount of its returns.

The following subsidiaries are deemed service entities and are

consolidated in the group financial statements:

• Caledonia Group Services Ltd

• Buckingham Gate Ltd

Other associated entities and subsidiaries are disclosed in notes 26

and 27 to the financial statements and are not consolidated in the

group financial statements, being held at fair value through profit

or loss.

Foreign currencies

Transactions in foreign currencies are recorded at the rate of

exchange ruling at the date of the transaction. Monetary assets

and liabilities denominated in foreign currencies at the reporting

date are translated to the functional currency at the foreign

exchange rate ruling at the reporting date. Non-monetary assets

and liabilities that are measured in terms of historical cost in a

foreign currency are translated to the functional currency using the

exchange rate at the date of the transaction. Non-monetary assets

and liabilities denominated in foreign currencies that are stated at

fair value are translated to the functional currency at foreign

exchange rates ruling at the dates the fair values were determined.

In the financial statements, foreign exchange gains or losses are

recognised in capital or revenue reserve, depending on whether

the gain or loss is of a capital or revenue nature respectively.

129

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Material accounting policies (continued)

Income

Dividends receivable on equity shares are recognised as revenue

when the shareholders’ right to receive payment has been

established, normally the ex-dividend date. Where no ex-dividend

date is available, dividends receivable on or before the period end

are treated as revenue. Overseas dividend income is shown net of

withholding tax under investment income.

The fixed returns on debt securities, loans and non-equity shares

are recognised on an effective interest rate basis, which is the rate

that exactly discounts estimated future cash receipts through the

expected life of the financial asset to that asset’s net carrying

amount.

Rental income is recognised on a straight-line basis over the

lease term.

The company’s share of net income from limited partnerships

is recognised as revenue when received.

Where uncertainty arises over the collectability of an amount

already included in income, the uncollectible amount or the

amount in respect of which the recovery has ceased to be

probable, is recognised as an expense. When the uncertainty

over collectability is removed, normally on receipt, the income

is recognised in the Statement of comprehensive income.

Expenses

All expenses are accounted for on an accrual basis. In the financial

statements, ongoing management expenses are included in

revenue reserves, whereas performance fees and share-based

payment expenses – costs relating to compensation schemes that

are linked directly to investment performance – are included in

capital reserves. Expenses of acquisition of an investment

designated as held at fair value through profit or loss or expenses

of an aborted acquisition or disposal of an investment are

presented as transaction costs, or deducted from the proceeds

of sale as appropriate, and included in capital reserves.

Leases

Lessor

Leases are classified as finance leases whenever the terms of the

lease transfer substantially all the risks and rewards of ownership to

the lessee. All other leases are classified as operating leases.

Rental income from operating leases is recognised on a straight-

line basis over the term of the relevant lease. Initial direct costs

incurred in negotiating and arranging an operating lease are added

to the carrying amount of the leased asset and recognised on a

straight-line basis.

Benefits provided as an incentive to enter into an operating lease

are also spread on a straight-line basis over the lease term.

Lessee

On commencement of a contract which gives the group the right

to use assets for a period of time in exchange for consideration, the

group recognises a right-of-use asset and a lease liability, unless the

lease qualifies as a ‘short-term’ lease (that is, the term is 12 months

or less with no option to purchase the lease asset) or a ‘low-value’

lease. Payments associated with short-term leases are recognised

on a straight-line basis as an expense in the income statement.

Employee benefits

Pension schemes

Payments to defined contribution schemes are charged as an

expense as they fall due.

For defined benefit schemes, the cost of providing benefits is

determined using the projected unit credit method, with actuarial

valuations being carried out at each reporting date. Re-

measurement gains and losses are recognised in full in the period

in which they occur in other comprehensive income.

Past service cost is recognised immediately in the period of a

plan amendment.

The retirement benefit obligation recognised in the Statement of

financial position represents the present value of the defined benefit

obligations as reduced by the fair value of scheme assets. Any asset

resulting from this calculation is limited to the present value of

available refunds and reductions in future contributions to the plan.

Profit sharing and bonus plans

The group recognises a liability and an expense for bonuses and

profit sharing, based on a formula that takes into consideration the

profit attributable to the company’s shareholders after certain

adjustments. The group recognises a provision where contractually

obliged or where there is a past practice that has created a

constructive obligation.

Share-based payments

The group issues equity-settled share-based payments to certain

employees. Equity-settled share-based payments are measured at

fair value at the date of grant and the fair value is expensed on a

straight-line basis over the vesting period, based on the group’s

estimate of the number of shares that will eventually vest.

As part of the share-based payment arrangements, the group pays

a cash amount to employees on exercise of options, equating to

the dividend entitlement on the option shares between grant and

vesting dates. This payment is treated as a cash-settled share-

based payment and is expensed on a straight-line basis over the

vesting period, based on the group’s estimate of the number of

shares that will eventually vest and a re-estimate of the fair value of

the dividend entitlement.

Where employees of a subsidiary are granted rights to the equity

instruments of its parent as consideration for the services provided

to the subsidiary, the subsidiary recognises an equity-settled

share-based payment transaction expense with a corresponding

intercompany balance with the parent. In addition, the parent

recognises an increase in equity and an increase in inter-company

balance for the amount of the share-based payment transaction.

An employee share trust is used for distributing shares awarded to

employees under Caledonia’s share remuneration schemes. The

trustee purchases shares with money lent interest-free by Caledonia

and transfers shares to participating employees on exercise.

The transactions the employee share trust undertakes are

considered to be performed by the trust as an agent for Caledonia.

The transactions of the employee share trust are included in the

separate financial statements of the parent company and, following

the requirements of IFRS 10, in the consolidated financial

statements as if they arose in that company. Own shares held by

the employee share trust as at the reporting date are accounted

for as treasury shares.

130 Caledonia Investments plc Annual Report 2024

National Insurance on share-based payment awards

National Insurance payable on the exercise of share awards has

been charged as an expense spread over the respective vesting

periods of the awards. The charge is based on the difference

between the market value of the estimated number of shares that

will vest and on the vested but unexercised awards at the reporting

date, less any consideration due, calculated at the latest enacted

National Insurance rate.

Taxation

The tax expense represents the sum of tax currently payable and

deferred tax.

The tax currently payable is based on the taxable profit for the

period. Taxable profit differs from net profit as reported in the

Statement of comprehensive income because it excludes items of

income or expense that are taxable or deductible in other periods

and it further excludes items that are never taxable or deductible.

The group’s liability for current tax is calculated using tax rates that

were applicable at the reporting date.

Deferred tax is the tax expected to be payable or recoverable on

differences between the carrying amounts of assets and liabilities

in the financial statements and the corresponding tax bases used in

the computation of taxable profit and is accounted for using the

liability method. Deferred tax liabilities are recognised for all

taxable temporary differences and deferred tax assets are

recognised to the extent that it is probable that future taxable

profits will be available against which deductible temporary

differences can be utilised. Investment trust companies that have

approval as such under section 1159 of the Corporation Tax Act

2010 are not liable for taxation on capital gains.

The carrying amount of deferred tax assets is reviewed at each

reporting date and adjusted to the extent that it is probable that

sufficient future taxable profits will be available to allow all or part

of the assets to be recovered.

Dividend distribution

Dividends are recognised in the period in which they are

appropriately authorised and no longer at the discretion of the

entity. For interim dividends, this will normally mean the date on

which they are paid and, for final dividends, the date on which they

are approved in general meeting.

Investments

Investments are recognised and de-recognised on the date when

their purchase or sale is subject to a relevant contract and the

associated risks and rewards have been transferred. Where a

purchase or sale is made under a contract whose terms require

delivery within the timeframe established by the market

concerned, transactions are recognised on the trade date.

Investments held as part of the group’s business of investing in

financial assets are designated as held at fair value through profit

or loss in both the consolidated financial statements and the

company financial statements.

Investments designated as held at fair value through profit or loss

are measured at subsequent reporting dates at fair value. Gains or

losses arising from changes in the value of investments designated

as held at fair value through profit or loss, including foreign

exchange movements, are included in net profit or loss for the

period as a capital return.

When management is committed to a plan to sell an investment,

the asset is available for immediate sale and the sale is deemed

highly probable at the balance sheet date., the asset is classified as

held for sale and held within current assets.

Listed investments are valued at bid price or the last traded price

when a bid price is not available. Unlisted investments are valued

using recognised valuation methodologies, based on the

International Private Equity and Venture Capital Valuation

Guidelines, which reflect the amount for which an asset could be

exchanged between knowledgeable, willing parties on an arm’s

length basis. The portfolio valuation methodology is detailed on

pages 156 to 157.

Distributions from investment limited partnerships are treated as

disposal proceeds or income in accordance with the nature of the

distribution. Any surplus capital distributions after repaying

partner’s capital are treated as realised gains.

Service subsidiaries are either designated as held at fair value

through profit or loss or held at amortised cost in the company

financial statements.

Capital reserve

The company maintains a capital reserve. The following items are

transferred into the capital reserve from profit or loss:

• gains and losses on investments held at fair value through profit

or loss

• gains and losses on derivatives used to hedge the fair value of

investments

• fees and share-based payment expenses linked to investment

performance

• expenses and finance costs incurred directly in relation to capital

transactions

• actuarial gains and losses on defined benefit pension schemes

• taxation on items recognised in the capital reserve.

Investment property

Investment properties are properties which are held either to earn

rental income or for capital appreciation or for both. Investment

properties are stated at fair value.

The valuations are prepared by considering the aggregate of the

net annual rents receivable from the properties and where

relevant, associated costs. A yield which reflects the specific risks

inherent in the net cash flows is then applied to the net annual

rentals to arrive at the property valuation.

Any gain or loss arising from a change in fair value is recognised in

profit or loss. Rental income is recognised on a straight-line basis

over the lease term.

131

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Material accounting policies (continued)

Property, plant and equipment

Property is measured at fair value. Gains arising from changes in

the fair value are included in other comprehensive income for the

period in which they arise and losses included in profit or loss.

To the extent gains represent the reversal of cumulative losses

previously recognised they are included in profit or loss.

Plant and equipment is measured at cost less accumulated

depreciation and any accumulated impairment loss.

Assets in course of construction are measured at cost less any

accumulated impairment loss.

Depreciation is calculated to write off the fair value or cost of items

of property, plant and equipment less their estimated residual

values using the straight-line method over their estimated

useful lives. Land and assets in course of construction are

not depreciated.

The estimated useful lives of property, plant and equipment are

as follows:

Buildings 25 and 50 years

Fixtures and fittings 5-10 years

Office equipment 3-5 years

Accumulated depreciation on revalued property is eliminated

against the gross carrying amount of the asset.

The gain or loss on the disposal or retirement of an asset is

determined as the difference between the sales proceeds and the

carrying amount of the asset and is recognised in the Statement of

comprehensive income.

Impairment of assets

At each reporting date, the group reviews the carrying amounts

of its tangible assets to determine whether there is any indication

that those assets have suffered an impairment loss. If any such

indication exists, an impairment loss is recognised for the amount

by which the asset’s carrying amount exceeds its recoverable

amount, if any. The recoverable amount is the higher of an asset’s

fair value less costs to sell and value in use.

Receivables

Receivables do not carry any interest and are stated at their

nominal value as reduced by expected credit losses (‘ECL’) arising

from an annual ECL assessment of recoverable amounts. The

company has applied the three-stage model to inter-company

receivables and determined they are not impaired on a stage

one basis because credit risk has not increased significantly since

initial recognition.

Cash and cash equivalents

Cash comprises cash in hand, demand deposits and money market

funds. Cash equivalents are short-term, highly liquid investments

that are readily convertible to known amounts of cash and that

are subject to an insignificant risk of changes in value.

Bank balances are stated net of bank overdrafts in accordance with

the group banking overdraft arrangement.

Borrowings

Interest-bearing bank loans and overdrafts are recorded at the fair

value of proceeds received, net of direct issue costs. Finance

charges, including premiums payable on settlement or redemption

and direct issue costs, are accounted for on an accrual basis in the

Statement of comprehensive income using the effective interest

method and are added to the carrying amount of the instrument

to the extent that they are not settled in the period in which they

arise. The effective interest method allocates the interest expense

over the life of the instrument so as to reflect a constant return

on the carrying amount of the liability.

Payables

Payables are stated based on the amounts which are considered

to be payable in respect of goods or services received up to the

balance sheet date. Financial liabilities are recognised at amortised

cost in accordance with IFRS 9.

Provisions

A provision is recognised in the Statement of financial position

when the company has a present legal or constructive obligation

as a result of a past event, and it is probable that an outflow of

economic benefits will be required to settle the obligation.

Provisions are measured at the directors’ best estimate of the

expenditure required to settle the obligation at the reporting date

and are discounted to present value where the effect is material.

In the financial statements, provisions recognised for investments

are included in the Statement of comprehensive income as a

capital return.

Share capital

Equity instruments issued by the company are recorded as the

proceeds received, net of direct issue costs.

Where The Caledonia Investments plc Employee Share Trust

purchases the company’s equity share capital, the consideration

paid, including any directly attributable incremental costs (net of

income taxes), is deducted from equity attributable to the

company’s owners until the shares are transferred. Where such

shares are subsequently transferred, any consideration received,

net of any directly attributable incremental transaction costs and

the related income tax effects, is included in equity attributable to

the company’s owners.

Operating segments

Operating segments are based on the financial information

reported to the chief operating decision-maker.

132 Caledonia Investments plc Annual Report 2024

Notes to the financial statements

1. Revenue

Investment income

	2024	2023
	£m	£m
Income statement revenue column
Income from pool investments
Dividends from UK listed companies	11.5	11.2
Dividends from overseas listed companies	10.3	9.6
Dividends from unlisted companies	19.2	18.8
Distributions from limited partnerships	3.6	1.8
Interest on loan facilities	2.5	1.8
	47.1	43.2
Income from other investments
Dividends from unlisted companies	14.7	–
	61.8	43.2

1. During the year £14.7m of dividend income was received from Caledonia

US Investments Ltd.

Other income

	2024	2023
	£m	£m
Income statement revenue column
Property income	0.9	0.8
Income statement capital column
US limited partnerships tax refunds	0.6	1.3

2. Expenses

Management expenses

	2024	2023
	£m	£m
Income statement revenue column
Personnel expenses	12.9	12.0
Depreciation	1.1	1.1
Auditor’s remuneration	0.4	0.4
Other administrative expenses	9.6	8.7
Directors’ fees and disbursements recharged	(0.9)	(0.8)
Management fees and recharges	(0.2)	(0.1)
	22.9	21.3
Income statement capital column
Personnel expenses	8.3	8.2
Transaction costs	0.1	0.4
	8.4	8.6
	31.3	29.9

Further information

Auditor’s remuneration

Fees payable to BDO LLP in respect of services to Caledonia

Investments plc were as follows:

	2024	2023
	£m	£m
Audit services
Annual report	0.3	0.3
Other services
Other assurance, due diligence and tax compliance	0.1	0.1
	0.4	0.4

Fees payable to BDO LLP in respect of services to Caledonia

Investments plc’s non-consolidated subsidiaries were as follows:

	2024	2023
	£m	£m
Audit services
Audit of subsidiaries	0.7	0.5
Other services
Other assurance, due diligence and tax compliance	0.1	0.1
	0.8	0.6

Personnel expenses

	2024	2023
	£m	£m
Income statement revenue column
Wages and salaries	11.1	9.7
Compulsory social security contributions	1.7	1.5
Contributions to defined contribution plans	1.1	1.0
Defined benefit pension plans expense (note25)	(1.0)	(0.2)
	12.9	12.0
Income statement capital column
Share-based payments (note24)	7.1	7.4
National Insurance on share awards	1.2	0.8
	8.3	8.2
	21.2	20.2

The average number of employees, including executive directors,

throughout the year was as follows:

	2024	2023
	No	No
Average number of employees	71	62

Total directors’ remuneration expensed for the year was £5.3m

(2023: £4.8m), as follows:

		Group
	2024	2023
	£m	£m
Short-term employee benefits	2.8	2.7
Gains on exercise of share awards	2.5	2.1
	5.3	4.8

Full details on Directors’ fees is provided in the Directors’

remuneration report.

133

Strategic report Corporate governance

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3. Treasury interest receivable

	2024	2023
	£m	£m
Interest on bank deposits and liquidity funds	3.2	4.6

4. Finance costs

	2024	2023
	£m	£m
Interest on bank loans and overdrafts	3.4	2.3
On loans from group companies	7.2	0.1
	10.6	2.4

5. Taxation

Recognised in profit for the year

	2024	2023
	£m	£m
Current tax income
Current year	3.4	13.4
Adjustments for prior years	(1.5)	(1.3)
	1.9	12.1
Deferred tax income/(expense)
Origination and reversal of temporary differences	0.5	(25.6)
Adjustments for prior years	–	7.2
	0.5	(18.4)
Total tax income/(expense)	2.4	(6.3)

Adjustments for prior years represented settlement of prior year

tax loss relief surrendered to group companies, finalised in the year.

Reconciliation of effective tax expense

	2024	2023
	£m	£m
Profit before tax	201.4	149.2
Tax expense at the domestic rate of 25%/19%	(50.4)	(28.4)
Non-deductible expenses	2.1	0.1
Derecognition of losses	(4.7)	(19.3)
Non-taxable gains on investments	42.8	25.1
Non-taxable dividend income	14.0	9.0
Other temporary differences	0.1	1.3
Adjustments for prior years	(1.5)	5.9
Tax income/(expense)	2.4	(6.3)

1. The Company is exempt from UK corporation tax on capital gains as it

meets the HM Revenue & Customs criteria for an investment company set

out in Section 1158 of the Corporation Tax Act 2010.

Recognised in other comprehensive income

	2024	2023
	£m	£m
Current tax income
Current year	0.6	0.5
Deferred tax income/(expense)
On re-measurements of defined benefit
pension schemes	0.2	(0.5)
On share options and awards	(0.4)	(0.3)
	(0.2)	(0.8)
Total tax income/(expense)	0.4	(0.3)

Current tax assets

Current tax assets of £1.7m in the group and £2.0m in the company

represented tax loss relief surrender for settlement (2023: £19.3m

in the group and £20.3m in the company).

6. Dividends

Amounts recognised as distributions to owners of the company

in the year were as follows:

	2024		2023
	p/share	£m	p/share		£m
Final dividend for the year
ended 31 March 2023 (2022)	49.20	26.7	47.3	25.6
Special dividend for the year
ended 31 March 2022			175.0	95.0
Interim dividend for the year
ended 31 March 2024 (2023)	18.93	10.3	18.2	9.9
	68.13	37.0	240.5	130.5
Amounts proposed after the year end and not recognised in the financial statements were as follows:
Proposed final dividend for the year ended 31 March 2024	51.47	28.0

The proposed final dividend for the year ended 31 March 2024

was not included as a liability in these financial statements.

The dividend, if approved by shareholders at the annual general

meeting to be held on 17 July 2024, will be payable on 1 August

2024 to holders of shares on the register on 28 June 2024. The

ex-dividend date will be 27 June 2024. The deadline for elections

under the dividend reinvestment plan offered by Link Group will

be the close of business on 11 July 2024.

For the purposes of section 1158 of the Corporation Tax Act 2010

and associated regulations, the dividends payable for the year

ended 31 March 2024 are the interim and final dividends for that

year, amounting to £38.3m (2023: £36.6m).

7. Earnings per share

Basic and diluted earnings per share

The calculation of basic earnings per share of the group was based

on the profit attributable to shareholders and the weighted

average number of shares outstanding during the year. The

calculation of diluted earnings per share included an adjustment

for the effects of dilutive potential shares.

The profit attributable to shareholders (basic and diluted) was

as follows:

	2024	2023
	£m	£m
Revenue	40.5	20.6
Capital	163.3	122.3
Total	203.8	142.9

The weighted average number of shares was as follows:

	2024	2023
	000’s	000’s
Issued shares at the year start	54,664	54,664
Effect of shares cancelled	(1)	–
Effect of shares held by the employee share trust	(270)	(376)
Basic weighted average number of shares
in the year	54,393	54,288
Effect of performance shares, share options
and deferred bonus awards	844	881
Diluted weighted average number of shares
in the year	55,237	55,169

Notes to the financial statements (continued)

134 Caledonia Investments plc Annual Report 2024

8. Investments

	Group			Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Investments held at fair value through profit or loss
Investments listed on a
recognised stock exchange	949.8	836.9	949.8	836.9
Unlisted investments	1,745.6	1,958.0	1,750.9	1,966.3
	2,695.4	2,794.9	2,700.7	2,803.2
Investments held at cost
Service subsidiaries			0.9	0.9
Held for sale
Unlisted investments	19.0		19.0
	2,714.4	2,794.9	2,720.6	2,804.1

The movements in non-current investments were as follows:

	Listed	Unlisted	Unlisted
	equity	equity	debt	Total
	£m	£m	£m	£m
Group
Balance at 31 March 2022	830.1	1,525.3	30.0	2,385.4
Transfers	–	(1.6)	1.6	–
Purchases at cost	54.4	413.7	–	468.1
Disposal proceeds	(28.2)	(156.8)	(6.0)	(191.0)
Gains/losses on investments	(19.4)	152.4	–	133.0
Accrued income	–	(0.6)	–	(0.6)
Balance at 31 March 2023	836.9	1,932.4	25.6	2,794.9
Transfer to Held for sale	–	(19.0)	–	(19.0)
Purchases at cost	76.5	265.0	1.9	343.4
Disposal proceeds	(43.5)	(556.2)	–	(599.7)
Gains/losses on investments	79.9	94.5	–	174.4
Accrued income	–	1.4	–	1.4
Balance at 31 March 2024	949.8	1,718.1	27.5	2,695.4
Company
Balance at 31 March 2022	830.1	1,535.4	30.0	2,395.5
Transfers	–	(1.6)	1.6	–
Purchases at cost	54.4	413.7	–	468.1
Disposal proceeds	(28.2)	(156.8)	(6.0)	(191.0)
Gains/losses on investments	(19.4)	151.5	–	132.1
Accrued income	–	(0.6)	–	(0.6)
Balance at 31 March 2022	836.9	1,941.6	25.6	2,804.1
Transfer to Held for sale	–	(19.0)	–	(19.0)
Purchases at cost	76.5	265.0	1.9	343.4
Disposal proceeds	(43.5)	(556.2)	–	(599.7)
Gains/losses on investments	79.9	91.5	–	171.4
Accrued income	–	1.4	–	1.4
Balance at 31 March 2024	949.8	1,724.3	27.5	2,701.6

1. Unlisted equity included limited partnership and open-ended fund

investments, including a loan facility to a wholly owned investment

subsidiary investing in US PE funds. It also included £18.0m of non-pool

investments (2023: £260.2m non-pool investments).

9. Investment property

	Freehold
	property
	£m
Cost
Balance at 31 March 2022	19.7
Acquisitions	0.1
Balance at 31 March 2023 and 2024	19.8
Revaluation
Balance at 31 March 2022	(3.7)
Revaluation in the year	(1.0)
Balance at 31 March 2023	(4.7)
Revaluation in the year	(1.8)
Balance at 31 March 2024	(6.5)
Carrying amounts
At 31 March 2022	16.0
At 31 March 2023	15.1
At 31 March 2024	13.3

At 31 March 2024, the group held one property classified as

investment property, comprising that part of its head office

building occupied by a third-party tenant.

The fair value of the investment property was determined by

Tuckerman, an external, independent property valuer, holding

recognised and relevant professional qualifications and with recent

experience in the location and category of the property being

valued. The valuation conforms to the Royal Institution of

Chartered Surveyors (‘RICS’) Valuation Professional Standards.

Fees paid to the valuer are based on a fixed price contract.

As the property was let to a third-party tenant, it was valued on

the basis of the terms of the lease and current rent payable.

The investment property held by the group is classified as Level 3

under the fair value hierarchy (see page 143).

	Market			Range
	value	Valuation	Key unobservable	(weighted
Property	£m	technique	inputs	average)
Buckingham	13.3	Residual	Rent per sq ft pa	£38.00 –
Gate		development		£85.00
		value		(£73.78)
			Rent-free period	1.5 yrs
			Capitalisation rate	5.25%
			Purchaser’s costs	6.8%

An increased capitalisation rate of 0.25% would result in a

decreased asset valuation of £0.1m and a decrease of 0.25% would

result in an increased asset valuation of £0.1m. Conversely, an

increase in the estimated rent by 5% would result in an increase in

the asset valuation of £1.3m and a decrease of 5% would result in

a decrease in the asset valuation of £1.3m. The above inputs are

interdependent and partially determined by market conditions.

The impact on the valuation could be mitigated by the inter-

relationship between these inputs.

135

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Notes to the financial statements (continued)

The prior year sensitivity to inputs was as follows:

The investment property held by the group is classified as Level 3.

	Market			Range
	value	Valuation	Key unobservable	(weighted
Property	£m	technique	inputs	average)
Buckingham	15.1	Residual	Rent per sq ft pa	£38.00 –
Gate		development		£85.00
		value		(73.78)
			Rent-free period	0.5 yrs
			Capitalisation rate	4.75%
			Purchaser’s costs	6.8%

An increased capitalisation rate of 0.25% would result in a

decreased asset valuation of £0.8m and a decrease of 0.25%

would result in an increased asset valuation of £1.0m. Conversely,

an increase in the estimated rent by 5% would result in an

increase in the asset valuation of £0.8m and a decrease of 5%

would result in a decrease in the asset valuation of £0.7m. The

above inputs are interdependent and partially determined by

market conditions. The impact on the valuation could be

mitigated by the inter-relationship between these inputs.

10. Property, plant and equipment

Group

		Office
		equip-
	Property	ment	Total
	£m	£m	£m
Cost
Balance at 31 March 2022	32.4	4.5	36.9
Acquisitions	–	0.2	0.2
Balance at 31 March 2023	32.4	4.7	37.1
Acquisitions	–	0.5	0.5
Disposals	–	(0.2)	(0.2)
Balance at 31 March 2024	32.4	5.0	37.4
Depreciation
Balance at 31 March 2022	–	(2.6)	(2.6)
Depreciation charge	(0.6)	(0.5)	(1.1)
Eliminate depreciation	0.6	–	0.6
Balance at 31 March 2023	–	(3.1)	(3.1)
Depreciation charge	(0.6)	(0.5)	(1.1)
Eliminate depreciation	0.6	–	0.6
Disposals	–	0.2	0.2
Balance at 31 March 2024	–	(3.4)	(3.4)
Revaluation
Balance at 31 March 2022	(5.1)	–	(5.1)
Revaluation in the year	(0.4)	–	(0.4)
Eliminate depreciation	(0.6)	–	(0.6)
Balance at 31 March 2023	(6.1)	–	(6.1)
Revaluation in the year	(2.1)	–	(2.1)
Eliminate depreciation	(0.6)	–	(0.6)
Balance at 31 March 2024	(8.8)	–	(8.8)
Carrying amounts
At 31 March 2022	27.3	1.9	29.2
At 31 March 2023	26.3	1.6	27.9
At 31 March 2024	23.6	1.6	25.2

Property is measured at fair value and comprised freehold land and

buildings.

Property was revalued at 31 March 2024 by an independent valuer.

Had the property been carried under the cost model, the carrying

amount would have been £24.6m (2023: £25.1m).

The fair value of the property was determined by Tuckerman, an

external, independent property valuer, holding recognised and

relevant professional qualifications and with recent experience in

the location and category of the property being valued. The

valuation conforms to the Royal Institution of Chartered Surveyors

(‘RICS’) Valuation Professional Standards. Fees paid to the valuer

are based on a fixed price contract.

The external valuations were prepared by considering the

aggregate of the net annual rents receivable from the property and

where relevant, associated costs. A yield which reflects the specific

risks inherent in the net cash flows is then applied to the net annual

rentals to arrive at the property valuation.

The property held by the group is classified as Level 3 under the fair

value hierarchy (see page 143).

	Market			Range
	value	Valuation	Key unobservable	(weighted
Property	£m	technique	inputs	average)
Buckingham	23.6	Rental	Rent per sq ft pa	£40.00 –
Gate		yield		£85.00
				(£73.32)
			Capitalisation rate	5.25%
			Purchaser’s costs	6.8%

An increased capitalisation rate of 0.25% would result in a

decreased asset valuation of £1.2m and a decrease of 0.25%

would result in an increased asset valuation of £1.2m. An increase

in the estimated rent by 5% would result in an increase in the

asset valuation of £1.1m and a decrease of 5% would result in a

decrease in the asset valuation of £1.2m. The above inputs are

interdependent and partially determined by market conditions.

The impact on the valuation could be mitigated by the inter-

relationship between these inputs.

The prior year sensitivity to inputs was as follows:

	Market			Range
	value	Valuation	Key unobservable	(weighted
Property	£m	technique	inputs	average)
Buckingham	26.3	Rental	Rent per sq ft pa	£40.00 –
Gate		yield		£85.00
				(£73.32)
			Capitalisation rate	4.75%
			Purchaser’s costs	6.8%

An increased capitalisation rate of 0.25% would result in a decreased

asset valuation of £1.5m and a decrease of 0.25% would result in an

increased asset valuation of £1.6m. An increase in the estimated rent

by 5% would result in an increase in the asset valuation of £1.3m and

a decrease of 5% would result in a decrease in the asset valuation

of £1.3m. The above inputs are interdependent and partially

determined by market conditions. The impact on the valuation could

be mitigated by the inter-relationship between these inputs.

136 Caledonia Investments plc Annual Report 2024

11. Deferred tax

Deferred tax assets and liabilities were attributable

to the following:

	Assets	Liabilities	Net
Group	£m	£m	£m
2024
Employee benefits	5.4	(1.0)	4.4
Other timing differences	(0.1)	(0.1)	(0.2)
	5.3	(1.1)	4.2
2023
Employee benefits	5.5	(1.4)	4.1
Other timing differences	0.2	(0.4)	(0.2)
	5.7	(1.8)	3.9

Movement in temporary differences during the year

			Other
		Compre-	compre-
	Balance at	hensive	hensive	Balance at
	year start	income	income	year end
Group	£m	£m	£m	£m
2024
Employee benefits	4.1	0.5	(0.2)	4.4
Other timing differences	(0.2)	–	–	(0.2)
	3.9	0.5	(0.2)	4.2
2023
Employee benefits	5.1	(0.2)	(0.8)	4.1
Tax losses	18.1	(18.1)	–	–
Other timing differences	(0.1)	(0.1)	–	(0.2)
	23.1	(18.4)	(0.8)	3.9

Deferred tax assets and liabilities are measured at the tax rates that

are expected to apply to the period when the asset is realised or

the liability settled, based on rates that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax balances are calculated on all temporary differences

using a tax rate of 25%.

Group and company

Unrecognised deferred tax assets

Deferred tax assets were not recognised in respect of the

following items:

	Group		Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Tax losses	20.1	18.6	20.1	15.0
Corporate Interest
Restrictions	1.0	–	1.0	–

A deferred tax asset was not recognised given the composition of

the company’s portfolio and the restrictions on the utilisation of

brought-forward tax losses, it is not likely that this asset will be

utilised in the foreseeable future. The tax losses do not include

capital losses. The unrecognised deferred tax assets do not have an

expiry date.

Given the company’s status as an investment trust company and

the intention to continue meeting the conditions required to obtain

approval, the company has not provided for deferred tax on any

capital gains or losses arising on the revaluation or disposal of

investments held by the company itself.

12. Trade and other receivables

	Group		Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Non-current assets
Other receivables	–	–	35.5	37.1

Company non-current other receivables comprise £35.5m due from a

wholly owned subsidiary and in the prior year £1.6m due from the

overseas tax authorities.

Current assets
Trade receivables	2.2	2.8	2.0	2.1
Non-trade receivables and
prepayments	5.1	4.1	3.0	1.0
	7.3	6.9	5.0	3.1

We estimate expected credit losses on the group and company

receivables to be under £0.1m (2023: less than £0.1m). Our ECL

assessment included a review of recoverability of the Trade

receivables which comprise quoted investment income and private

capital sales balances to confirm amounts were received within

one month of the reporting date.

An aged analysis of group trade receivables is disclosed below.

		Within
	Total	terms	0-1 month
	£m	£m	£m
2024	2.2	2.1	0.1
2023	2.8	2.7	0.1

13. Net cash and cash equivalents

	Group		Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Bank balances	3.9	7.3	4.5	6.8
Money market funds	223.5	214.3	222.8	214.3
Cash and cash equivalents	227.4	221.6	227.3	221.1

1. Bank balances are stated net of bank overdrafts in accordance with the

group banking overdraft arrangement.

14. Interest-bearing loans and borrowings

	Group		Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Current liabilities
Loans from group companies	–	266.0	–	266.0

During the year ended 31 March 2024 the group and company fully

repaid loans from group companies of $328.8m (£266.0m) (2023:

$328.8m (£266.0m)) bearing interest at 4.85% (4.85%), being the

Fed Funds Target Range Lower Limit (DFEDTARL) plus 0.1% and is

repayable on demand.

As at 31 March 2024 the group had undrawn committed facilities

totalling £250m (2023: £250m), comprising £112.5m from ING

Group expiring in July 2025 and £137.5m from RBSI expiring in

November 2027. The facilities are in place to ensure the group has

sufficient liquid funds to meet its working capital and investment

requirements, most notably drawdown notices from private equity

funds, whose exact timing can be unpredictable.

137

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Notes to the financial statements (continued)

Covenants attached to the group loan facilities assess borrowing

levels against the net assets of Caledonia plc and sub-categories

of assets held therein, adjusted to take account of liquidity, asset

concentration and the markets in which they are invested. As at

31 March 2024, Caledonia plc had remaining borrowing capacity

under the covenants of £560m (2023: £523m), considerably in

excess of undrawn facilities. Compliance with covenants is

tested monthly.

During the year, the group and company utilised £70m (2023: £nil)

of an available £250m of bank revolving credit facilities.

15. Trade and other payables

	Group		Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Trade payables	1.1	1.0	10.5	9.2
Non-trade payables and accrued expenses	3.1	0.8	13.6	10.1
Other payables	20.2	20.3	14.1	14.5
	24.4	22.1	38.2	33.8

Other payables included short-term borrowing from subsidiaries.

16. Share capital

		Deferred
	Ordinary	ordinary	Share
	shares	shares	premium	Total
	£m	£m	£m	£m
Balance at 31 March
2022,2023 and 2024	2.7	0.4	1.3	4.4

The number of fully paid shares in issue was as follows:

				Deferred
		Ordinary shares		ordinary shares
	2024	2023	2024	2023
	000’s	000’s	000’s	000’s
Balance at the year start	54,664	54,664	8,000	8,000
Shares purchased and cancelled	(52)	–	–	–
	54,612	54,664	8,000	8,000

The company had outstanding performance share scheme and

deferred bonus awards (note 24).

As at 31 March 2024, the issued share capital of the company

comprised 54,611,759 ordinary shares (2023: 54,663,662) and

8,000,000 deferred ordinary shares (2023: 8,000,000). The

ordinary and deferred ordinary shares have a nominal value of

5p each.

The holders of the ordinary shares are entitled to receive dividends

as declared from time to time and are entitled to one vote per

share at meetings of the company. In respect of the company’s

ordinary shares that are held by subsidiaries, all voting rights

are suspended.

The deferred ordinary shares carry no voting rights and are not

redeemable. They carry the right to a fixed cumulative preference

dividend of 1% per annum (exclusive of any associated tax credit) of

the nominal value of such deferred ordinary shares, being 0.05p

per share, or £4,000 in aggregate, for all such shares currently in

issue. The company is required to pay the dividend to the extent

that it has distributable profits. On a winding-up or other return of

capital, the deferred ordinary shares carry the right to the payment

of the amount paid up on such shares only after holders of the

ordinary shares have received the sum of £100,000 in respect of

each such ordinary share. All of the deferred ordinary shares are

held by Sterling Industries Ltd, a wholly owned group company.

17. Net asset value

The group’s undiluted net asset value is based on the net assets of

the group at the year end and on the number of ordinary shares

in issue at the year end less ordinary shares held by The Caledonia

Investments plc Employee Share Trust. The group’s diluted net

asset value assumes the calling of performance share and deferred

bonus awards.

		2024			2023
	Net	Number		Net	Number
	assets	of shares	NAV	assets	of shares 1	NAV
	£m	000’s	p/share	£m	000’s	p/share
Undiluted	2,965.3	54,388	5452	2,798.0	54,326	5150
Share awards	–	844	(83)	–	881	(82)
Diluted	2,965.3	55,232	5369	2,798.0	55,207	5068

1. Number of shares in issue at the year end is stated after the deduction of

223,666 (2023: 337,962) ordinary shares held by the Caledonia

Investments plc Employee Share Trust.

Net asset value total return is calculated in accordance with

guidance from the Association of Investment Companies (‘AIC’),

as the change in NAV from the start of the period, assuming that

dividends paid to shareholders are reinvested at NAV at the time

the shares are quoted ex-dividend.

	2024	2023
	p	p
Diluted NAV at year start	5068	5041
Diluted NAV at year end	5369	5068
Dividends payable in the year	68	241
Reinvestment adjustment	6	9
	5443	5318
NAVTR over the year	7.4%	5.5%

2. The reinvestment adjustment is the gain or loss resulting from

reinvesting the dividends in NAV at the ex-dividend date.

138 Caledonia Investments plc Annual Report 2024

18. Operating segments

The chief operating decision-maker has been identified as the

Executive Committee, which reviews the company’s internal

reporting in order to assess performance and allocate resources.

Management has determined the operating segments based on

these reports.

The performance of operating segments is assessed on a measure

of group total revenue, principally comprising gains and losses on

investments and derivatives hedging those investments and

investment income. Reportable profit or loss is after treasury

income and ‘Other items’, which comprise management and other

expenses and provisions. Reportable assets equate to the group’s

total assets. Cash and cash equivalents and other items are not

identifiable operating segments.

‘Other investments’ comprise subsidiaries not managed as part of

the investment portfolio.

Reportable segments are identified with reference to investment

‘pools’ which are used by management to organise the asset

allocation and performance measurement of the business.

The pools are quoted equity, private companies (Private Capital)

and private equity funds (Funds), with each pool exposed to

different risks, and operated by different teams according to

distinct investment criteria and subject to different internal

performance targets.

		Profit/(loss)before tax	Total assets
	2024	2023	2024	2023
	£m	£m	£m	£m
Public Companies	101.8	1.4	949.8	836.9
Private Capital	111.2	64.6	820.3	824.0
Funds	19.4	103.6	926.3	873.8
Investment portfolio	232.4	169.6	2,696.4	2,534.7
Other investments	1.4	7.3	18.0	260.2
Total revenue/investments	233.8	176.9	2,714.4	2,794.9
Cash and cash equivalents	3.2	4.6	227.4	221.6
Other items	(35.6)	(32.3)	57.1	78.9
Reportable total	201.4	149.2	2,998.9	3,095.4

1. Other investments included £18.0m of non-pool investments (2023:

£260.2m of non-pool investments).

Geographical segments

In presenting information on the basis of geographical segments,

segment revenue is based on the currency of primary listing for

listed securities, or country of residence for unquoted investments,

and segment assets are based on the geographical location of the

assets. Non-current assets below comprise investment property

and property, plant and equipment (notes 9-10).

	UK	US	Other	Total
	£m	£m	£m	£m
2024
Revenue	7.8	102.6	123.4	233.8
Non-current assets	38.5	–	–	38.5
2023
Revenue	19.4	114.7	42.8	176.9
Non-current assets	43.0	–	–	43.0

19. Related parties

Identity of related parties

The group and company had related party relationships with its

subsidiaries (note 27) and associates (note 26) and with its key

management personnel, being its directors.

Transactions with key management personnel

Certain directors of the company and their immediate relatives had

significant influence in The Cayzer Trust Company Ltd, which held

35.6% of the voting shares of the company as at 31 March 2024

(2023: 35.3%).

During the year, the group invoiced and received £0.1m (2023:

£0.1m) in rent and administration fees from The Cayzer Trust

Company Ltd.

In addition to their salaries, the group provided non-cash and

post-employment benefits to directors and executive officers.

Details of directors’ pension benefits are set out in the Directors’

remuneration report on page 99.

The key management personnel compensation was as follows:

	Group
	2024	2023
	£m	£m
Short-term employee benefits	2.8	2.7
Equity compensation benefits	1.5	2.0
	4.3	4.7

Total remuneration of directors is included in ‘Personnel expenses’

(note 2).

139

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Notes to the financial statements (continued)

Other related party transactions

Subsidiaries

Transactions between the company and its subsidiaries were

as follows:

		2024		2023
	Amount		Amount
	of trans-	Balance at	of trans-	Balance at
	actions	year end	actions	year end
	£m	£m	£m	£m
Comprehensive income items
Dividends receivable on
equity shares	22.2	–	16.6	–
Interest receivable	2.4	–	1.9	–
Management fees payable	(31.4)	(11.4)	(29.9)	(9.9)
Interest payable	(7.3)	–	(0.1)	(0.1)
Taxation received	21.1	–	2.1	–
Taxation paid	–	–	(0.1)	–
Financial position items
Investments purchased	–	–	273.7	–
Equity subscribed	–	–	14.1	–
Investment loans	13.9	66.6	(24.4)	52.6
Loans receivable	–	35.5	–	35.5
Loans payable	266.0	(20.2)	(265.9)	(286.2)

1. During the year £14.7m of dividend income was received from Caledonia

US Investments Ltd. In addition £216.6m of capital distributions were

received from Caledonia US Investments Ltd.

2. During the prior year $338m (£274m) of fund investments were acquired

from Caledonia US Investments Ltd, a wholly owned subsidiary.

3. During the year $328m (£266m) was repaid to Caledonia US Investments

Ltd on the loan facility provided in the prior year.

Associates

Transactions between the company and group and associates

were as follows:

		2024		2023
	Amount		Amount
	of trans-	Balance at	of trans-	Balance at
	actions	year end	actions	year end
	£m	£m	£m	£m
Directors’ fees	0.1	–	0.1	–
Dividends receivable on
equity shares	9.1	–	5.0	–

1. Transactions with subsidiary.

20. Operating leases

Leases as lessor

The group leases out its investment property under operating

leases (note 9). The future minimum lease receipts under non-

cancellable leases were as follows:

	2024	2023
	£m	£m
Less than one year	0.9	0.9
Between one and five years	1.2	2.1
	2.1	3.0

During the year ended 31 March 2024, £0.8m (2023: £0.7m) was recognised

as income in the statement of comprehensive income in respect of operating

leases.

21. Capital commitments

At the reporting date, the group and company had entered into

unconditional commitments to limited partnerships, committed

loan facility agreements, and a conditional loan and purchase

agreement, as follows:

	Group			Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Investments
Contracted but not called	377.3	422.6	377.3	422.6
Conditionally contracted	–	–	4.5	4.5
	377.3	422.6	381.8	427.1

Amounts are callable within the next 12 months. The group has

conducted a going concern assessment which considered future

cash flows, the availability of liquid assets and debt facilities, over

the 12-month period required. In making this assessment a number

of stress scenarios were developed. All scenarios include all

outstanding private equity fund commitments being drawn. Under

these scenarios the group would have a range of mitigating actions

available to it, including sales of liquid assets and usage of banking

facilities, which would provide sufficient funds to meet all of its

liabilities as they fall due and still hold significant liquid assets over

the assessment period. For further details on assessment of going

concern and viability, please refer to page 62.

22. Contingencies

The company has provided guarantees capped at £6.5m,

£9.0m and £5.0m to the trustees of the Caledonia Pension Scheme,

the Sterling Industries Pension Scheme and the Amber Industrial

Holdings PLC Pension & Life Assurance Scheme respectively

in respect of the liabilities of the participating employers of

those schemes.

Management have not set out a maturity analysis in relation to

the pensions guarantees totalling £20.5m on the grounds that

management are unable to accurately allocate to the earliest

period in which the guarantee could be called due to the conditions

of this guarantee.

140 Caledonia Investments plc Annual Report 2024

23. Financial instruments

Financial instruments comprise securities and other investments,

cash balances, borrowings, and receivables and payables that arise

from operations. The investment portfolio includes listed and

unlisted equity investments, debt instruments and investments

in funds that are intended to be held for the long term.

Risk analysis

The main types of financial risk to which the group is exposed are

market risk (which encompasses price risk, currency risk and fair

value interest rate risk), credit risk and liquidity risk.

The nature and extent of the financial instruments outstanding

at the reporting date and the risk management policies employed

are discussed below.

Market risk

Market risk embodies the potential for both losses and gains,

and includes price risk, currency risk and fair value interest rate risk.

The strategy for managing market risk is driven by the company’s

objectives, which are to outperform the CPIH by 3% to 6% in the

short term and the FTSE All-Share Total Return index over rolling

10-year periods. Investments are made in a range of instruments,

including listed and unlisted equities, debt and investment funds,

in a range of sectors and regions.

Price risk

Price risk may affect the value of listed and unlisted investments

as a result of changes in market prices (other than arising from

interest rate risk or currency risk), whether caused by factors

specific to an individual investment, its issuer or factors affecting

all instruments traded in the market. Factors affecting instruments

traded in the market could include changes in market prices

whether driven by market sentiment, information specific to

individual investments, or the movements in foreign currency

relative to the group’s functional currency of Sterling.

As the majority of financial instruments are carried at fair

value, with fair value changes recognised in the Statement of

comprehensive Income, all changes in market conditions will

affect portfolio asset prices.

Price risk is managed by constructing a diversified portfolio

of instruments traded on various markets and hedging

where appropriate.

The exposures of listed and unlisted equity investments and fund

interests were as follows:

	Group			Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Investments held at fair value
through profit or loss	2,667.9	2769.3	2,673.2	2777.6

The following table details the sensitivity to a 10% variation in

equity prices. The sensitivity analysis includes all equity and fund

investments held at fair value through profit or loss and adjusts

their valuation at the year end for a 10% change in value.

	Group			Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Increase in prices	266.8	276.9	267.3	277.7
Decrease in prices	(266.8)	(276.9)	(267.3)	(277.7)

The sensitivity to equity and fund investments has decreased during

the year due to investment realisations in the year, reducing the

portfolio value at the year end.

Currency risk

The group’s currency risk is attributable to monetary items which

are denominated in currencies other than the group’s functional

currency of Sterling. This excludes the impact of foreign currency

movements on equity instruments which carry price risk (see price

risk section above). There is exposure to the risk that the exchange

rate of the functional currency may change relative to other

currencies in a manner that has an adverse effect on the value

of that portion of assets and liabilities denominated in currencies

other than the functional currency.

The company’s non-functional currency denominated monetary

items and gains and losses thereon are reviewed regularly by the

directors and the currency risk is managed by the directors within

the overall asset allocation strategies.

The fair values of the monetary items that have foreign currency

exposure were as follows:

	Group		Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Investments in debt
instruments	1.6	1.6	1.6	1.6
Cash and cash equivalents	15.9	6.7	15.8	6.7
Loans and borrowings	–	(266.0)	–	(266.0)
	17.5	(257.7)	17.4	(257.7)

The following table details the sensitivity to a 10% variation in

exchange rates. This level of change is considered to be reasonable,

based on observation of market conditions and historic trends. The

sensitivity analysis includes all foreign denominated debt

investments.

	Group			Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Sterling depreciates (weakens)	1.6	(23.2)	1.6	(23.2)
Sterling appreciates
(strengthens)	(1.3)	19.0	(1.3)	19.0

The exposure to foreign currency has decreased in the year

due to a decrease in foreign denominated group borrowings,

partially offset by an increase in foreign denominated cash and

cash equivalents.

Interest rate risk

Interest rate movements may affect the fair value of investments

in fixed interest securities and the level of income receivable

from fixed income securities and cash at bank and on deposit.

The company and group held cash at bank, term deposits and

money market funds, with the term to maturity of up to three

months and fixed and floating rate, interest-bearing financial

assets and floating rate borrowings. 

141

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Notes to the financial statements (continued)

The company’s interest-bearing assets and liabilities are reviewed

periodically by the company and interest rate risk is managed by

the directors within the overall asset allocation strategies.

The exposure to interest rate risk on financial assets and liabilities

was as follows:

	Group		Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Fixed rate
Interest-bearing loans to non-consolidated subsidiaries	1.6	1.6	1.6	1.6
Floating rate
Investments in debt
instruments	25.9	24.0	25.9	24.0
Cash and cash equivalents	227.4	221.6	227.3	221.1
Loans and borrowings	–	(266.0)	–	(266.0)

The sensitivity analysis below has been determined based on the

exposure to interest rates at the reporting date from a 50 basis

point change taking place at the beginning of the financial year

and held constant throughout the year. This level of change is

considered to be reasonable, based on observation of market

conditions and historic trends.

	Group		Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Decrease in interest rates	(1.1)	0.2	(1.1)	0.2
Increase in interest rates	1.1	(0.2)	1.1	(0.2)

The group’s sensitivity to interest rates has increased over the year

due to a reduction in floating rate loans and borrowings, increasing

net cash balances.

Credit risk

Credit risk is the risk that the counterparty to a financial instrument

will fail to discharge an obligation or commitment. A credit policy is

in place and exposure to credit risk is monitored regularly.

The exposure to credit risk in financial assets was as follows:

	Group			Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Investments in debt instruments	27.5	25.6	27.5	25.6
Operating and other receivables	7.3	6.9	40.5	40.2
Cash and cash equivalents	227.4	221.6	227.3	221.1
	262.2	254.1	295.3	286.9

The group’s credit risk is primarily attributable to its cash and cash

equivalents, trade receivables and debt investments. For an aged

analysis of trade receivables see note 12. A group analysis of credit

ratings for cash and cash equivalents is presented below. All other

financial assets are unrated.

	Group
	2024	2023
Credit rating	£m	£m
AAAm	223.5	214.3
A+ / A-	3.9	7.3
	227.4	221.6

1. The group holds £223.5m (2023 - £214.3m) in Low Volatility Net Asset

Value money market funds which all hold a AAAm rating from Standard &

Poors and £3.9m (2023- £7.3m) of cash in current accounts with three

commercial banks with credit ratings from Standard & Poors of A+ and A-.

Debt instruments relate to loans to investees within the Private

Capital pool totalling £27.5m (2023: £25.6m). Prior to making

investments in debt instruments, management has in place

a process of review that includes an evaluation of a potential

investee company’s ability to service and repay its debt.

Management assess the credit risk relating to these instrument

as part of an overall ongoing monitoring of its debt and equity

positions in each relevant investee.

The exposure to credit risk on operating and other receivables

is mitigated by performing credit evaluations on investee

companies as part of the due diligence process.

Credit risk arising on money market liquidity funds and cash and

cash equivalents is mitigated by spreading liquidity investments

and deposits across a number of approved counterparties in

accordance with board policy. These are ‘AAA’ rated money market

funds, as determined by the rating agencies Fitch, Moody’s or

Standard & Poor’s; highly-rated banks operating in the London

money market; or investment-grade clearing banks specifically

approved by the board. These credit ratings are reviewed regularly.

At the year end, the group and company had money market

liquidity funds of £223.5m respectively (2023: £214.3m).

At the year end, the group and company had £30.5m invested in

the JP Morgan GBP and US Dollar liquidity funds, £30m invested

in each of the ILF GBP liquidity fund from Insight and the LGIM

Liquidity Fund GBP, £28.6m invested in the Institutional Sterling

and US Dollar Liquidity funds from Blackrock, £26.0m invested

in each of the Aberdeen Liquidity Fund (Lux) GBP, the Sterling

Liquidity fund from Aviva Investors and the Sterling Liquid Reserves

Fund from Goldman Sachs. In addition the company and group

had £25.7m and £26.4m invested respectively in the HSBC Global

Liquidity Funds plc Sterling and US Dollar Liquidity Funds.

At the prior year end, the group and company had £30m invested

in each of the Aberdeen Liquidity Fund (Lux) GBP, the LGIM

Liquidity Fund GBP, the Institutional Sterling Liquidity fund from

Blackrock, the Sterling Liquidity fund from Aviva Investors and the

ILF GBP Liquidity Fund from Insight, £25.5m invested in Sterling

Liquid Reserves Fund from Goldman Sachs, £24.0m in the JP

Morgan GBP liquidity fund, £14.8m in the HSBC Global Liquidity

Funds plc Sterling and US Dollar Liquidity Fund.

All transactions in listed securities are settled on contract terms

using approved brokers. The risk of default is considered minimal,

as delivery of securities sold is only made once the broker has

received payment. Payment is made on a purchase once the

securities have been received by the broker. The trade will fail if

either party fails to meet their obligations. Listed security trades

are settled through HSBC Global Custody.

Fair value

Most of the financial instruments are carried at fair value in

the Statement of financial position. Usually, the fair value of

the financial instruments can be reliably determined within

a reasonable range of estimates. For certain other financial

instruments, specifically operating and other receivables and

payables, the carrying amounts approximate fair value due to the

immediate or short-term nature of these financial instruments.

142 Caledonia Investments plc Annual Report 2024

Liquidity risk

Liquidity risk arises as a result of the possibility that the group and

company may not be able to meet its obligations as they fall due.

The corporate treasury function provides services to the company

and group, coordinating access to domestic financial markets for

both borrowing and depositing. Group companies access local

financial markets when this is more favourable, in liaison with the

corporate treasury function. Executive management monitors the

group’s liquidity on a weekly basis, including the level of undrawn

committed bank facilities.

Bank facilities were undrawn at 31 March 2024 and 2023.

Capital management policies and procedures

The group’s capital management objectives are:

• to ensure that the group and company will be able to continue

as a going concern

• to maximise the income and capital return to the company’s

shareholders, principally through the use of equity capital,

although the group will maintain appropriate borrowing facilities,

to be used for short-term working capital or bridging finance,

currently £250m (2023: £250m).

The group’s total capital at 31 March 2024 was £2,965.3m (2023:

£3,064.0m) and comprised equity share capital and reserves of

£2,965.3m (2023: £2,798.0m) and £nil of borrowings (2023:

£266.0m). The group was ungeared at the year end (2023: £266.0m

of group borrowings) and had £250m (2023: £250m) of undrawn

committed bank facilities.

The board monitors and reviews the broad structure of the group’s

and company’s capital on an ongoing basis. This review includes:

• the planned level of gearing, which takes into account planned

investment activity

• the possible buyback of equity shares for cancellation, which

takes account of the discount of the share price to net asset

value per share

• the annual dividend policy.

The group’s objectives, policies and processes for managing capital

are unchanged from the preceding year.

The parent company is subject to the following externally imposed

capital requirements:

• as a public limited company, the company is required

to have a minimum issued share capital of £50,000

• to maintain its approval as an investment trust company, the

company is required to comply with the provisions of section

1158 of the Corporation Tax Act 2010 as amended by the

Investment Trust (Approved Company) (Tax) Regulations 2011.

The parent company has complied with these requirements,

which are unchanged since the previous year end.

Fair value hierarchy

The company measures fair values using the following fair value

hierarchy, reflecting the significance of the inputs used in making

the measurements:

Level 1 Inputs that are quoted market prices (unadjusted) in

active markets for identical instruments.

Level 2 Inputs other than quoted prices included in Level 1

that are observable either directly or indirectly.

Level 3 Inputs that are unobservable.

The table below analyses financial instruments held at fair value

according to level in the fair value hierarchy into which the fair

value measurement is categorised:

	Group			Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Investments held at fair value
Level 1	949.9	836.9	949.9	836.9
Level 2	8.4	4.8	8.4	4.8
Level 3	1,737.1	1,953.2	1,742.4	1,961.5
	2,695.4	2,794.9	2,700.7	2,803.2

The following table shows a reconciliation from the opening

balances to the closing balances for fair value measurements in

Level 3 of the fair value hierarchy:

		Group	Company
	2024	2023	2024	2023
	£m	£m	£m	£m
Balance at the year start	1,953.2	1,549.1	1,961.5	1,558.3
Transferred to Held for Sale	(19.0)	–	(19.0)	–
Purchases	269.8	413.5	269.8	413.5
Disposal proceeds	(327.8)	(162.8)	(327.8)	(162.8)
Gains and losses on investments sold in the year	122.7	126.7	122.7	126.7
Gains and losses on investments held at the year end	(263.2)	27.3	(266.2)	26.4
Accrued income	1.4	(0.6)	1.4	(0.6)
Balance at the year end	1,737.1	1,953.2	1,742.4	1,961.5

The following table provides information on significant

unobservable inputs used at 31 March 2024 in measuring financial

instruments categorised as Level 3 in the fair value hierarchy. 

143

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Notes to the financial statements (continued)

Private company assets have been disaggregated into categories

as follows: Assets in the large, earnings-based category have an

enterprise value of >200m (2023: >£150m), and benefit from a

reasonable number of comparative data points, as well as having

sufficient size to make their earnings reliable and predictable. The

assets in the small and medium, earnings based category have an

Enterprise Value of <£200m (2023: £50-£150m) and have a more

limited universe of comparable businesses available. Manager

valuations are used for assets where the net asset method is

employed. During the year the large categorisation was increased

to >£200m.

For private company assets, we have chosen to sensitise and

disclose EBITDA multiple inputs because their derivation involves

the most significant judgements when estimating valuation,

including which data sets to consider and prioritise. Valuations

also include other unobservable inputs, including earnings, which

are based on historic and forecast data and are less judgmental.

For each asset category, inputs were sensitised by a percentage

deemed to reflect the relative degree of estimation uncertainty,

and valuation calculations re-performed to identify the impact.

Private equity fund assets are each held in and managed by the

same type of fund vehicle, valued using the same method of

adjusted manager valuations, and subject to broadly the same

economic risks. They are therefore subject to a similar degree of

estimation uncertainty. They have been sensitised at an aggregated

level by 5% to reflect a degree of uncertainty over managers’

valuations which form the basis of their fair value.

At 31 March 2024

				Input	Change
		Unobser-	Weighted	sensit-	in valu-
Description /	Fair	vable	average	ivity	ation
valuation method	value £m	input	input	+/-	+/- £m
Internally developed
Private companies
Large, earnings	473.9	EBITDA	12.1x	10.0%	+51.1/-
		multiple			52.7
Small and medium,	164.0	EBITDA	9.1x	10.0%-	+15.3/-
earnings		multiple		15.0%	14.4
Net assets /	182.4	Multiple	1	0.1x	+18.6/-
manager valuation					18.8
	820.3				+85.0/-
					85.9
Non-pool companies	18.0
Total internal	838.3
Externally developed
Private equity funds
Net asset value	898.8	Manager	1	5%	+/-44.9
		NAV
					+129.9/-
	1,737.1				130.8 

The table below sets out information about significant

unobservable inputs used at the prior year end, 31 March 2023 in

measuring financial instruments categorised as Level 3 in the fair

value hierarchy.

At 31 March 2023

				Input	Change
		Unobser-	Weighted	sensit-	in valu-
Description /	Fair	vable	average	ivity	ation
valuation method	value £m	input	input	+/-	+/- £m
Internally developed
Private companies
Large, earnings	460.6	EBITDA	14.0x	10.0%	+39.6/-
		multiple			55.5
Medium, earnings	160.6	EBITDA	11.0x	10.0%	+/-13.1
		multiple
Small, earnings	10.3	EBITDA	4.6x	15.0%	+/-1.2
		multiple
Net assets / manager	192.5	Multiple	1	0.1x	+/-21.8
valuation	824.0				+75.7/-
					91.6
Non-pool companies	260.2
Total internal	1084.2
Externally developed
Private equity funds
Net asset value	869.0	Manager	1	5%	+/-43.5
		NAV
					+119.2/-
	1,953.2				135.1 

144 Caledonia Investments plc Annual Report 2024

Private capital companies

Valuation approach

For each asset, management consider a range of valuation methods

and select those which are considered most appropriate for each

asset, taking into consideration the quantity and quality of data

points available with each method. Methods include inter alia:

Indicative offers. We regularly receive indications of interest from

potential acquirers for our private capital assets, either as part of a

structured sale process or in the form of a direct approach. Where

we judge it appropriate, the insight gained from such approaches is

incorporated into the data sets used in arriving at valuations. Where

there is an offer from credible buyer or buyers, and there is an

intention to advance discussions, our practice is to consider fair

values derived from an indicative enterprise value based on offers

received with an appropriate discount applied. Discounts aim to

reflect the unique uncertainty associated with the execution of

each transaction, and are normally in a range of 5-20%.

Multiples

This method involves the application of an earnings multiple to

the maintainable earnings of the business, most commonly earnings

before interest, tax, depreciation and amortisation (‘EBITDA’)

multiples, and is likely to be appropriate for investments in

established businesses with an identifiable ongoing earnings stream.

Such multiples are derived from (i) comparable public companies

based on geographic location, industry, size, target markets and

other factors that management considers to be reasonable and

(ii) reported mergers and acquisitions transactions involving

comparable companies. EBITDA multiples ranged from 4x to 15x

(2023: 4x to 14x), weighted average 11.5x (2023: 13.1x). Earnings

are obtained from portfolio company statutory and management

accounts and forecast management accounts. Maintainable

earnings are estimated by adjusting reported and forecast earnings

for non-recurring items (for example restructuring expenses),

for significant corporate actions, and, in exceptional cases,

run-rate adjustments.

Net assets

This method is likely to be appropriate for businesses whose value

derives principally from the underlying value of its assets rather than

its ongoing earnings. A third-party valuation may be used to derive

the fair value of a particular asset or group of assets, most

commonly property assets.

Having selected an appropriate method, management then

consider a range of data relevant to each asset. The data selected

and the assumptions used are in each case examined by the

Valuation Committee and Audit and Risk Committee to ensure

sufficient challenge and reflection has been made on the decisions

made to arrive at valuations.

In arriving at valuations for the Private Capital portfolio, the

directors have conducted a portfolio analysis, examining company

and sector specific vulnerabilities, the quantity and quality of data

available, as well as considering operating and financial leverage and

liquidity. They have classified the investments into five categories

based on a combination of enterprise value, valuation technique

and sector as shown adjacent.

		EV Range	Valuation	Valuation
Investment	Category	£m	technique	£m
Cobehold	Utilise external	N/A	Net assets	181.0
	valuation
AIR-serv	Large, internally	>200m	Earnings	170.1
Europe	developed
Stonehage	Large, internally	>200m	Earnings	168.5
Fleming	developed
Liberation	Large, internally	>200m	Earnings	135.2
Group	developed
Cooke Optics	Small and medium,	<200m	Earnings	105.4
	internally developed
Sports	Small and medium,	<200m	Earnings	35.0
Information	internally developed
Services
Other investments				25.1
				820.3

At 31 March 2023, the investments were classified as follows:

		EV Range	Valuation	Valuation
Investment	Category	£m	technique	£m
Seven	Large, internally	>150m	Earnings	187.1
Investment	developed
Management
Cobehold	Utilise external	N/A	Net assets	176.1
	valuation
Stonehage	Large, internally	>150m	Earnings	141.6
Fleming	developed
Liberation	Large, internally	>150m	Earnings	131.9
Group	developed
Cooke Optics	Medium, internally	50-150m	Earnings	124.5
	developed
BioAgilytix	Utilise external	N/A	Net assets	16.4
	valuation
Other investments	Smaller	<50m		46.4
				824.0

145

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Notes to the financial statements (continued)

The valuation of Private Capital companies has also been informed

by offers we have received from interested parties in the year

ended 31 March 2024.

More details on the valuation process for individual assets within

these categories is outlined below.

Large, internally developed

AIR-serv Europe, Stonehage Fleming and Liberation Group use an

earnings multiple method with earnings derived from trading over

historic, current and forecast periods. A particularly high-quality set

of comparator companies was identified when arriving at an

appropriate multiple.

Medium, internally developed

Cooke Optics and Sports Information Services use an earnings

multiple method with earnings derived from trading over historic,

current and forecast periods. Multiples were arrived at after

considering a basket of sector specific transactions and sector

specific multiples.

Cooke Optics and Sports Information Services are market-leading

companies operating in niche sectors so the quantity of available

suitable publicly quoted comparators is low.

Utilise external valuation

Cobehold’s fair value is derived from the valuation prepared by

Cobepa (the manager) which reflects the net asset value of the

group as at 31 December 2023, Cobehold’s year end.

Non-pool companies

Non-pool companies comprise principally cash or group company

receivables or payables held in subsidiary investment entities.

Private equity funds

Private equity fund interests are valued on a net assets basis,

estimated based on the managers’ NAVs. Manager’s NAVs apply

valuation techniques consistent with IFRS and are normally subject

to audit. Managers’ NAVs are usually published quarterly, two to

four months after the quarter end. Consequently, the fund

valuations included in these financial statements were based

principally on the 31 December 2023 managers’ NAVs.

146 Caledonia Investments plc Annual Report 2024

24. Share-based payments

The company has a performance share scheme that entitles senior

executives to receive options over the company’s shares, which

are exercisable subject to service and performance conditions.

For nil-cost option awards granted in 2014, half of the shares

comprised in the awards may be exercised after three years and half

after five years. For nil-cost option awards granted in 2015 onwards,

one-third of the shares comprised in the awards may be exercised

after three years and two-thirds after five years.

The company also has a deferred bonus plan, under which senior

employees compulsorily defer part of their annual bonus, being any

bonus in excess of 50% of their basic salary for the bonus year,

into shares.

The terms and conditions of the grants outstanding were as follows,

whereby all grants are settled by physical delivery of shares:

		Vesting	Number
Grant date	Entitlement	conditions	of shares
Performance share scheme awards
27.11.14	Award grant to senior staff	Note 1	2,075
26.06.15	Award grant to senior staff	Note 3	916
26.05.16	Award grant to senior staff	Note 3	2,585
21.07.17	Award grant to senior staff	Note 3	3,769
30.05.18	Award grant to senior staff	Note 3	9,319
31.05.19	Award grant to senior staff	Note 3	134,935
04.08.20	Award grant to senior staff	Note 3	167,343
04.06.21	Award grant to senior staff	Note 3	157,716
30.06.21	Award grant to senior staff	Note 3	7,893
30.05.22	Award grant to senior staff	Note 3	153,846
25.11.22	Award grant to senior staff	Note 3	5,169
30.05.23	Award grant to senior staff	Note 3	190,309
24.11.23	Award grant to senior staff	Note 3	19,665
			855,540
Deferred bonus awards to senior staff
04.06.21	Compulsory award	Note 2	33,614
30.05.22	Compulsory award	Note 2	34,283
30.05.23	Compulsory award	Note 2	1,976
			69,873

1. Three/five years of service with vesting on a graduated basis from 10% to

100% for annualised NAV total return of 3% to 10% and (for investment

executives) annualised pool total returns in a range of 4% to 15%, in each

case measured over three years for one-half of the award and five years

for the other half of the award. Investment executives’ awards are

measured as to 80% by reference to pool total returns and 20% by

reference to NAV total return, other than Mr Cayzer-Colvin’s awards,

which are 60% and 40% respectively.

2. Three years of service.

3. Three/five years of service with vesting on a graduated basis from 10% to

100% for annualised NAV total return of 3% to 10% and (for investment

executives) annualised pool total returns in a range of 4% to 15%, in each

case measured over three years for one-third of the award and five years

for the remaining two-thirds of the award. Investment executives’ awards

are measured as to 80% by reference to pool total returns and 20% by

reference to NAV total return, other than Mr Cayzer-Colvin’s awards,

which are 60% and 40% respectively.

All performance share awards have a life of 10 years and all

deferred bonus awards have a life of four years.

The fair value of services received in return for performance share

scheme and deferred awards granted was measured indirectly,

by reference to the share price at the date of grant.

The weighted average share price at the date of exercise of share

awards during the year was as follows:

	2024	2023
	p	p
Weighted average share price	3467	3731

Under the schemes, awards were granted with service and

non-market performance conditions. Such conditions were not

taken into account in the fair value measurement of the services

received at the dates of grant.

Employee expenses were as follows:

	2024	2023
Years ended 31 March	£m	£m
Performance share awards granted in 2018	0.6	0.4
Performance share awards granted in 2019	0.4	0.7
Performance share awards granted in 2020	0.7	0.8
Performance share awards granted in 2021	1.1	1.9
Performance share awards granted in 2022	1.1	1.4
Performance share awards granted in 2023	0.8	1.1
Performance share awards granted in 2024	1.3	–
Deferred bonus awards for 2019	–	0.1
Deferred bonus awards for 2021	0.6	0.6
Deferred bonus awards for 2022	0.5	0.4
	7.1	7.4

147

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Notes to the financial statements (continued)

25. Employee benefits

Group

	2024	2023
	£m	£m
Non-current assets
Defined benefit pension asset	4.3	4.0
Current liabilities
Profit sharing bonus	(3.1)	(2.4)
Non-current liabilities
National Insurance on performance shares and deferred bonus awards	(2.7)	(2.7)
Dividends payable on performance shares and deferred bonus awards	(2.3)	(2.4)
	(5.0)	(5.1)
Total employee liabilities	(8.1)	(7.5)

Defined benefit pension obligations

The group operates three plans in the UK that provide pension

benefits for employees and makes contributions to one of the

plans. The schemes are approved by HMRC for tax purposes and

operated separately from the group, being managed by an

independent set of trustees, whose appointment is determined

by the schemes’ documentation and legislation. The schemes are

subject to UK funding regulations, which require the group and the

trustees to agree a funding strategy and contribution schedule

where necessary. Three (2023: three) of the schemes were in

surplus on an IAS 19 basis. One scheme surplus was recognised in

full as the company considers there is an unconditional right to a

refund under IFRIC 14, one scheme surplus was capped at the

economic benefit of reduced future contributions and one scheme

surplus was unrecognised. Two schemes were effectively closed to

new members in April 1996 and the other scheme in April 1997.

New employees joining after that date were offered alternative

defined contribution pension arrangements. Caledonia Group

Services Ltd, a wholly owned subsidiary of Caledonia Investments

plc, is the sponsoring employer for all schemes.

	2024	2023
	£m	£m
Present value of funded obligations	(49.0)	(50.6)
Fair value of plan assets	74.1	71.9
Present value of net assets	25.1	21.3
Irrecoverable surplus	(20.8)	(17.3)
	4.3	4.0

Changes in the present value of defined benefit obligations were

as follows:

	2024	2023
	£m	£m
Balance at the year start	50.6	68.4
Service cost	0.1	0.1
Interest cost	2.4	1.7
Actuarial loss/(gain)fromchanges:
- in demographic assumptions	(0.6)	(0.5)
- in financial assumptions	(0.9)	(17.3)
- experience gains	0.2	1.4
Actual benefit payments	(2.8)	(3.2)
Balance at the year end	49.0	50.6

Changes in the fair value of plan assets were as follows:

	2024	2023
	£m	£m
Balance at the year start	71.9	78.9
Interest income	3.4	2.0
Return on plan assets less interest income	1.5	(5.9)
Employer contributions	0.1	0.1
Actual benefit payments	(2.8)	(3.2)
Balance at the year end	74.1	71.9

Amounts recognised in management expenses in the Statement

of comprehensive income were as follows:

	2024	2023
	£m	£m
Service cost	0.1	0.1
Interest on obligations	2.4	1.7
Interest on plan assets	(3.4)	(2.0)
	(0.9)	(0.2)

Amounts recognised in other comprehensive income

were as follows:

	2024	2023
	£m	£m
Actuarial gains arising from financial assumptions	0.9	17.3
Actuarial gains/(losses)arisingfrom demographic
assumptions	0.6	0.5
Actuarial losses from experience adjustments	(0.2)	(1.4)
Return on plan assets less interest income	1.5	(5.9)
Increase in irrecoverable surplus	(3.6)	(9.1)
Re-measurement (losses)/gains in the year	(0.8)	1.4

An analysis of plan assets at the end of the year was as follows:

	2024	2023
	£m	£m
Equities	35.3	32.1
Bonds	27.2	22.5
Cash	11.6	17.3
	74.1	71.9

The analysis of plan assets above included an underlying asset

allocation of investment funds.

Principal actuarial assumptions at the reporting date (expressed

as weighted averages) were as follows:

	2024	2023
	%	%
Discount rate at the year end	4.8	4.8
Future salary increases	3.0	4.5
Future pension increases	3.3	3.4
RPI price inflation	3.3	3.4

Mortality rates are assumed to follow the Self-Administered Pension

Schemes ‘Series 3’ Light tables applicable to each member’s year of

birth, projected to calendar year 2020 in line with the core CMI scale

of improvements. Allowance has also been made for further

improvements in line with CMI core projections with a long-term

trend of 1.5% pa. Life expectancy on retirement in normal health is

assumed to be 27.8 years (2023: 27.7 years) for males and 28.8 years

(2023: 28.7 years) for females who are currently 62 years of age.

Expected contributions to group post-employment benefit plans for

the year ending 31 March 2025 were £0.1m (2024: £0.1m).

148 Caledonia Investments plc Annual Report 2024

In the UK, the funding is set on the basis of a triennial funding

valuation by the actuaries for which the assumptions may differ

from those above. IAS 19 requires ‘best estimate’ assumptions to

be used whereas the funding valuation uses ‘prudent’ assumptions.

As a result of these valuations, the group and the scheme trustees

agree a Schedule of Contributions, which sets out the required

contributions from the employer and employees for current

service. Where the scheme is in deficit, the Schedule of

Contributions also includes required contributions from the

employer to eliminate the deficit. The most recent triennial

valuations were completed in 2021 and 2023. A summary of the

recent funding obligations and weighted average duration of the

defined benefit obligations was as follows:

		Weighted
		average
	Obligations	duration
	at 31 Mar	at 31 Mar
	2021	2024
	£m	years
Amber Industrial Holdings Pension Scheme	13.0	11
Caledonia Pension Scheme	31.7	12

	At 30 Sep	At 31 Mar
	2022	2024
	£m	years
Sterling Industries Pension Scheme	17.2	9

Sensitivities

The calculation of the defined benefit obligation is sensitive to the

assumptions set out above. The following table summarises the

estimated increase in defined benefit obligations to a change in

individual actuarial assumptions, while holding all other

assumptions constant. This sensitivity analysis may not be

representative of the actual change in the defined benefit

obligation as it is unlikely that the change in an assumption would

occur in isolation, as some of the assumptions may be correlated.

	2024	2023
	£m	£m
Reduction in the discount rate of 0.25%	1.3	1.4
Increase in inflation of 0.25%	0.9	1.0
Increase in life expectancy of one year	2.0	2.1

Risks

The pension schemes typically expose the group to risks such as:

• investment risk – the schemes hold their investments in equities

and bonds, the value of which fluctuates, whether caused by

factors specific to an individual investment, its issuer or factors

affecting all instruments traded in the market

• interest rate risk – the schemes’ liabilities are assessed using

market rates of interest, based on corporate bond yields, to

discount the liabilities and are therefore subject to any volatility

in the movement of the market rate of interest. The net interest

income or expense recognised in profit or loss is calculated using

the market rate of interest

• inflation risk – a significant proportion of the benefits under the

schemes is linked to inflation. Although the schemes’ assets are

expected to provide a good hedge against inflation over the long

term, movements over the short term would increase the

schemes’ net deficit

• mortality risk – in the event that members live longer than

assumed, the liabilities may turn out to have been understated

originally and a deficit may emerge if funding has not been

adequately provided for the increased life expectancy.

26. Interests in associates

Company	Class	Holding %	Registered office
Bloom Engineering Holdings Inc.	Common	49.0	100 V	ista Drive, Charleroi, PA 15022-3486
Sports Information Services (Holdings)Ltd	Ordinary	22.6	Unit 2 Whitehall Avenue, Kingston, Milton Keynes, Buckinghamshire,
			MK10 0AX
Stonehage Fleming Family & Partners Ltd	Preferred	36.1	Third Floor, 1 Le Truchot, St Peter Port, Guernsey, GY1 1WD

The company is an investment trust company and, accordingly,

does not equity account for associates that are designated as

investments held at fair value through profit or loss.

Aggregated amounts relating to associates, extracted on a 100%

basis, were as follows:

	2024	2023
	£m	£m
Assets	395.9	381.3
Liabilities	(269.4)	(251.7)
Equity	126.5	129.6
Revenues	429.1	390.2
Profit	15.7	19.1

149

Strategic report Corporate governance

Financial statements

Other informationIntroduction

Notes to the financial statements (continued)

27. Subsidiaries

			Key to						Key to
			Registered						Registered
Company	Class	Holding %	office	Company		Class	Holding %		office
Caledonia Investments
Amber 2010 Ltd	Ordinary	100.0	6	Caledonia US Investments Ltd		Ordinary	100.0		6
Buckingham Gate Ltd	Ordinary	100.0	6	Crewkerne Investments Ltd		A Ordinary	50.5		6
						B Ordinary	100.0
Caledonia CCIL Distribution Ltd	Ordinary	100.0	6	Easybox Self-Storage Ltd		Ordinary	100.0		6
Caledonia Financial Ltd	Ordinary	100.0	6	Edinmore Investments Ltd		Ordinary	100.0		6
Caledonia Group Services Ltd	Ordinary	100.0	6	Sterling Crewkerne Ltd		Ordinary	100.0		6
Caledonia Land & Property Ltd	Ordinary	100.0	6	Sterling Industries Ltd		Ordinary	100.0		6
Caledonia Treasury Ltd	Ordinary	100.0	6	The Union-Castle Mail		Ordinary	100.0		6
				Steamship Co Ltd		A Ordinary	100.0
AIR-serv
AIR-serv Belgium BV	Ordinary	100.0	7	AIRvending Ltd		Ordinary	100.0		12
AIR-serv France SARL	Ordinary	100.0	8	Crossbow Bidco Ltd		Ordinary	100.0		12
AIR-serv Germany GmbH	Ordinary	100.0	9	Crossbow Midco Ltd		Ordinary	100.0		12
AIR-serv Netherlands BV	Ordinary	100.0	10	Crossbow Topco Ltd		Ordinary	99.8		1	12
AIR-serv Spain SLU	Ordinary	100.0	11
Cooke Optics
Chaplin Bidco Ltd	Ordinary	100.0	13	Cooke Optics Group Ltd		Ordinary	100.0		13
Chaplin Midco Ltd	Ordinary	100.0	13	Cooke Optics (HongKong)		Ordinary	100.0		16
				Limited
Chaplin Topco Ltd	A Ordinary	100.0	13	Cooke Optics Holdings Ltd		Ordinary	100.0		13
	B Ordinary	75.3
	C Ordinary	98.6
Cooke Optics Inc.	Ordinary	100.0	14	Cooke Optics Ltd		Ordinary	100.0		13
Cooke (Shanghai)Optics	Ordinary A	100.0	15	Cooke Optics TV Ltd		4	Ordinary	100.0		13
Technology Co Ltd
Liberation Group
A.E. Smith & Son Ltd	Ordinary	100.0	17	La Cave des Vins Ltd	5	Ordinary	100.0		17
A.S.B.M. Ltd	Ordinary	100.0	17	La Rocque Enterprises Ltd		Ordinary	100.0		17
A.S.B.O. Ltd	Ordinary	100.0	17	La Rocque Inn (Jersey)Ltd		Ordinary	100.0		17
A.S.B.T. Ltd	Ordinary	100.0	17	Lapwing (Trading)Ltd		Ordinary	100.0		17
Aurora Hotel Ltd	Ordinary	100.0	17	Le Hocq Hotel Ltd		Ordinary	100.0		17
Bath Street Wine Cellar Ltd	Ordinary	100.0	17	Les Garcons Ltd		Ordinary	100.0		18
Brasserie du Centre Ltd	Ordinary	100.0	17	Longueville Distributors Ltd		Ordinary	100.0		17
Bucktrout & Company Ltd	Deferred	100.0	18	M Still Catering Ltd		Ordinary	100.0		19
	Ordinary	100.0
	Preference	100.0
Butcombe Brewery Ltd	Ordinary	100.0	19	Marais Hall Ltd		Ordinary	100.0		20
Butcombe Brewing	Ordinary	100.0	19	Mary Ann Products		Ordinary	100.0		17
Company Ltd				(Jersey)Ltd
Caesarea Hotel (Jersey)Ltd	Ordinary	100.0	17	Mitre Hotel (Jersey)Ltd		Ordinary	100.0		17
Café de Paris (Jersey)Ltd 5	Ordinary	100.0	17	Nightbridge Ltd		Ordinary	100.0		17
Caledonia TLG Bidco Ltd	Ordinary	100.0	19	Old Court House Hotel		Ordinary	100.0		17
				(StAubin) 1972 Ltd
Caledonia TLG Ltd	Ordinary A	100.0	17	Parade Hotel (Jersey)Ltd		Ordinary	100.0		17
	Ordinary B	0.9
	Ordinary C	75.4
	Preference	66.9
	Deferred	100.0
Caledonia TLG Midco Ltd	Ordinary	100.0	17	Peirson (1971) Ltd	5	Ordinary	100.0		17
Captains Holdings Ltd	Ordinary	100.0	18	Puffin NewCo Ltd		Ordinary	100.0		17
Channel Wines & Spirits	Ordinary	100.0	17	Red Lion Ltd		Ordinary	100.0		17
(Jersey)Ltd
Cirrus Inns Holdings Ltd	Ordinary	100.0	19	Robin Hood (Jersey)Ltd		Ordinary	100.0		17
Cirrus Inns Ltd	Ordinary	100.0	19	S.L. Ltd		Ordinary	100.0		17
Citann Ltd	Ordinary	100.0	17	Ship Holdings Ltd		Ordinary	100.0		18
	Preference	100.0

150 Caledonia Investments plc Annual Report 2024

			Key to							Key to
			Registered							Registere d
Company	Class	Holding %	office	Company				Class	Holding %	office
Cosy Corner (Jersey)Ltd	Ordinary	100.0	17	Square Ltd				Ordinary	100.0	17
Craig Street Brewing	Ordinary	100.0	17	St John’s Hotel Ltd				Ordinary	100.0	17
Company Ltd
Divette Holdings Ltd	Ordinary	100.0	18	Stag Hotel (Jersey)Ltd				Ordinary	100.0	17
Don Inn (Jersey)Ltd	Ordinary	100.0	17	Sussex Hotel Ltd				Ordinary	100.0	17
Evenstar Ltd	Ordinary	100.0	17	The Guernsey Brewery Co				Ordinary	100.0	18
				(1920)Ltd				Preference	100.0
Exeter Hotel (Jersey)Ltd	Ordinary	100.0	17	The Independent Brewing				Ordinary	100.0	17
				Company Ltd
Farm Street Inns Ltd	Ordinary	100.0	19	The Liberation Group Ltd				Ordinary	100.0	17
Farmers Inn Ltd	Ordinary	100.0	17	The Liberation Group UK Ltd				Ordinary	100.0	19
Five Oaks Hotel Ltd	Ordinary	100.0	17	The Liberation Pub Company				Ordinary	100.0	18
				(Guernsey)Ltd
Foresters Arms (Jersey)Ltd	Ordinary	100.0	17	The Liberation Pub Company				Ordinary	100.0	17
				(Jersey)Ltd
Gimbels (Jersey)Ltd	Ordinary	100.0	17	The Post Horn Ltd				Ordinary	100.0	17
Glo’ster Vaults Ltd	Ordinary	100.0	17	The Royal Oak Inn Trading Ltd			5	Ordinary	100.0	19
Great Union Hotel (Holdings)Ltd 5	Ordinary	100.0	17	Trafalgar Hotel (Jersey)Ltd				Ordinary	100.0	17
Great Western Hotel Ltd	Ordinary	100.0	17	Union Inn (Jersey)Ltd				Ordinary	100.0	17
Guernsey Leisure Company Ltd	Ordinary	100.0	18	Victor Hugo Ltd	5			Ordinary	100.0	17
Guppy’s Holdings Ltd	Ordinary	100.0	18	Victoria (Valley)Ltd	5			Ordinary	100.0	17
Guppy’s of Guernsey Ltd	Ordinary	100.0	18	Victoria Hotel (Jersey)Ltd				Ordinary	100.0	17
Hautville Ltd	Ordinary	100.0	18	5	Wellington Hotel Ltd			Ordinary	100.0	17
Horse & Hound (Jersey)Ltd	Ordinary	100.0	17		Wests Cinemas Ltd	5		Ordinary	100.0	17
John Tregear Ltd	Ordinary	100.0	17		White Hart Ltd			Ordinary	100.0	18

6. Cayzer House, 30 Buckingham Gate, London SW1E 6NN

7. Rubensstraat 104/57, 2300 Turnhout, Belgium

8. Parc d’Activités les Béthunes, 16 rue du compas, 95310 Cergy Pontoise

Cedex, France

9. Elisabethstr. 1, 52428 Jülich, Germany

10. Spuiweg 22 D, 5145 NE Waalwijk, The Netherlands

11. C/ Isla de Alegranza 2, nave 53, 28703 San Sebastián de los Reyes,

Madrid, Spain

12. Redgate Road, South Lancashire Industrial Estate, Ashton-In-Makerfield,

Wigan, Lancashire, WN4 8DT

13. 1 Cooke Close, Thurmaston, Leicester LE4 8PT

14. 4131 Vanowen Place, Burbank, CA 91505, USA

15. Rooms 503/504, No 1 Building, No 908 Xiuwen Road, Minhang District,

Shanghai, China

16. TMF Hong Kong Limited, 31F, Tower Two, Times Square, Matheson

Street, Causeway Bay, Hong Kong

17. Tregear House, Longueville Road, St Saviour, Jersey JE2 7WF

18. Hougue Jehannet, Vale, Guernsey GY3 5UF

19. Butcombe Brewery Havyatt Road Trading Estate, Havyatt Road,

Wrington, Bristol, BS40 5PA

20. Marais Hall, Marais Square, St Anne, Alderney GY9 3TS

1. Directly held by the company

2. Included in the consolidation

3. Subsidiary of Crossbow Topco Ltd

4. Subsidiary of Chaplin Topco Ltd

5. Subsidiary of Caledonia TLG Ltd

Registered office addresses

151

Strategic report Corporate governance

Financial statements

Other informationIntroduction

The10-yearrecordofthecompany’sfinancialperformanceisasfollows:

Company performance record (unaudited)

Profit/

(loss)for

the year

£m

Diluted

earnings

per share

Annual

dividend

Net

assets

£m

Diluted

NAV per

price

Rolling10yearsannualised

Total share-

holder

return

%

FTSE

All-Share

Total Return

%

2015 207.7 371.1 50.6 1,627 2906 2281 7.5 7.7

2016 41.1 73.1 52.6 1,644 2890 2285 3.8 4.7

2017 290.1 518.4 54.8 1,899 3395 2750 5.2 5.7

2018 26.5 47.4 57.0 1,837 3285 2650 5.3 6.7

2019 198.2 354.7 59.3 2,002 3582 2980 11.6 11.1

2020 (172.5) (315.0) 61.1 1,787 3236 2435 6.7 4.4

2021 467.6 837.8 62.9 2,225 4000 2645 7.1 6.0

2022 611.3 1101.5 64.8 2,783 5041 3540 11.9 7.2

2023 144.0 259.0 67.4 2,798 5068 3390 9.5 5.8

2024 203.4 369.0 70.4 2,965 5369 3280 8.6 5.8

1. Annualdividendsarestatedinrelationtotheyear’sresultsfromwhichtheywerepaid.Dividendsfor2017and2022excludethespecialdividendof100.0p

and175.0p.

152 Caledonia Investments plc Annual Report 2024

Alternative performance measures (‘APMs’)

APMsarenotprescribedbyaccountingstandardsbutareindustry

specific performance measures which help users of the annual

accounts and financial statements to better interpret and

understandperformance.

TermsinthisglossaryidentifiedasAPMs

havebeenhighlightedbythesymbol:

Discount

Ordinarysharesarequotedonthestockmarketandcantrade

atadiscounttotheNAVofthecompany.Thefollowingdiscount

appliedtotheshares:

Distributable profits

Distributable profits include profits distributable under the

CompaniesAct2006andincludedistributablereserves,being

realisedrevenueandcapitalprofits,lessanyunrealisedlossesin

excessofunrealisedprofits.

Dividend cover

Dividendcoveristheratioofnetrevenue(asdefinedbelow)

totheannualdividendpayable(excludingspecialdividends)to

shareholdersoutofprofitsfortheyear.Ithelpstoindicatethe

sustainabilityofannualdividends.

Ex-dividend date

The date immediately preceding the record date (as described

below)foragivendividend.Shareholderswhoacquiretheirshares

onoraftertheex-dividenddatewillnotbeeligibletoreceivethe

relevantdividend.

APM

Investment and pool returns

The company uses the modified Dietz method as a measure of the

performanceofaninvestmentorinvestmentpooloveraperiod.

Thismethoddividesthegainorlossinvalueplusanyincome,less

anycapitalcashflows,bytheaveragecapitalinvestedoverthe

periodofmeasurement.Averagecapitaltakesintoaccountthe

timingofindividualcashflows.

Glossary of terms and alternative

performance measures (unaudited)

31Mar2024

£m

31Mar2023

£m

Shareprice(b) 3280p 3390p

NAV(a) 5369p 5068p

Discount((a-b)/a)

(expressedasapercentage) 38.9% 33.1%

31Mar2024

£m

31Mar2023

£m

Netrevenue(b) 40.5 20.6

Dividendpayable(a) 38.3 36.6

Dividendcover((b)/a)

(expressedasapercentage) 106% 56%

31Mar2024

£m

31Mar2023

£m

Retained earnings 176.4 174.6

Distributable capital gains and losses 2,415.2 1,988.0

2,591.6 2,162.6

APM

153

Strategic report Corporate governance Financial statements

Other information

Introduction

153

Net assets

Netassetsprovidesameasureofthevalueofthecompany

toshareholdersandistakenfromtheIFRSgroupnetassets.

Net asset value (‘NAV’)

NAVisameasureofthevalueofthecompany,beingitsassets–

principallyinvestmentsmadeinothercompaniesandcashheld–

minusanyliabilities.NAVpershareiscalculatedbydividingnet

assetsbythenumberofsharesinissue,adjustedforsharesheld

by the company’s Employee Share Trust and for dilution by the

exerciseofvestedshareawards.NAVtakesaccountofdividends

payableontheex-dividenddate.

Seefinancialstatementsnote17.

APM

NAV total return (‘NAVTR’)

NAVTRisameasureofhowtheNAVpersharehasperformedover

aperiod,consideringbothcapitalreturnsanddividendspaidto

shareholders.NAVTRiscalculatedastheincreaseinNAVpershare

betweenthebeginningandendoftheperiod,plusaccretionfrom

theassumeddividendreinvestmentintheperiod.Weusethis

measure as it enables comparisons to be drawn against an

investmentindexinordertocompareperformance.Theresultis

plottedonpage21andthecalculationfollowsthemethod

prescribedbytheAssociationofInvestmentCompanies(‘AIC’).

Seefinancialstatementsnote17.

Net revenue

Netrevenuecomprisesincomefrominvestmentsless

managementexpenses,financingcostsandtax.Netrevenue

comprisestherevenuecolumnpresentedintheGroupstatement

ofcomprehensiveincomeonpage124anddiffersfromtotal

comprehensiveincomeinexcludinggainsandlosseson

investmentsandotheritemsofacapitalnature.Theseparationof

revenueandcapitalprofitsandlossesisrequiredbytheAICSORP

as of fundamental importance to shareholders and other users of

thefinancialstatementsofinvestmenttrustcompanies.

APM

Ongoing charges

Ongoingchargesarethetotalofinvestmentmanagementfeesand

otherexpensesasshownintheincomestatement,asapercentage

oftheaveragemonthlynetassetvalue,followingtheguidance

providedbytheAssociationofInvestmentCompanies.

Expense items included in the ongoing charges calculation

compriserecurringcostsrelatingtotheoperationofthecompany.

Ongoingchargesexcludetransactioncosts,externalperformance

feesandshare-basedpaymentexpenses,whicharedirectlylinked

toinvestmentperformance,andre-measurementofdefined

benefitpensionschemes,alsolinkedtomarketmovements.

Share-based payments comprise awards under the company’s

performancesharescheme,whichvestsubjecttoachievingNAVTR

targets,aswellasservicerequirements,plusdeferredbonus

awardswhicharisefromannualbonusawardsover50%ofbasic

salary,whichalsorelatetothecompany’sinvestmentperformance.

Record date

The cut-off date on which a shareholder needs to be beneficially

entitled to a share on the company’s share register in order to

qualifyforaforthcomingdividend.

APM

Total Shareholder Return (‘TSR’)

TSRmeasuresthereturntoshareholdersthroughthemovementin

thesharepriceanddividendspaidduringthemeasurementperiod.

31Mar2024

£m

31Mar2023

£m

Managementexpenses(a) 22.9 21.3

Annualisedaveragenetassets(b) 2,841.1 2,764.4

Ongoingcharges(a)/(b)

(expressedasapercentage) 0.81% 0.77%

31Mar

2024

31Mar

2023

ClosingNAVpershare(p) 5369p 5068p a

Dividendspaidout(p) 68p 241p b

Effectofre-investingdividends(p) 6p 9p c

AdjustedNAVpershare(p) 5443p 5318p d=a+b+c

OpeningNAVpershare(p) 5068p 5041p e

NAVtotalreturn(%) 7.4% 5.5% =(d/e)-1

Annualisedaveragenetassets-

31Mar2024£m

Apr 23 2,791.4

May23 2,796.1

Jun23 2,779.3

Jul23 2,781.5

Aug 23 2,804.1

Sep 23 2,876.1

Oct23 2,854.0

Nov23 2,848.3

Dec 23 2,863.5

Jan24 2,859.4

Feb 24 2,873.7

Mar24 2,965.3

Average 2,841.1

Annualisedaveragenetassets-

31Mar2023£m

Apr 22 2,805.7

May22 2,794.8

Jun22 2,700.6

Jul22 2,733.4

Aug 22 2,780.8

Sep 22 2,781.4

Oct22 2,770.8

Nov22 2,780.6

Dec 22 2,729.2

Jan23 2,743.8

Feb 23 2,753.5

Mar23 2,798.0

Average 2,764.4

Glossary of terms and alternative performance measure (unaudited) (continued)

154 Caledonia Investments plc Annual Report 2024

Holdings over 1% of net assets at 31 March 2024

Name Pool Geography Business Value£m Netassets%

Cobepa

PrivateCapital Europe Investmentcompany 181.0 6.1

AIR-servEurope

PrivateCapital United Kingdom Forecourtvending 170.1 5.7

Stonehage Fleming

PrivateCapital Channel Islands Familyofficeservices 168.5 5.7

HighVista Strategies

Funds United States Funds of funds 139.7 4.7

LiberationGroup

PrivateCapital Channel Islands Pubs,bars&inns 135.2 4.6

CookeOptics

PrivateCapital United Kingdom Cine lens manufacturer 105.4 3.6

Microsoft Public Companies United States Software 84.3 2.8

Oracle Public Companies United States Software 83.5 2.8

Axiom Asia funds

Funds Asia Funds of funds 83.2 2.8

Watsco Public Companies United States Ventilation products 77.0 2.6

Texas Instruments Public Companies United States Semiconductors 63.6 2.1

Decheng funds Funds Asia Privateequityfunds 59.0 2.0

Fastenal Public Companies United States Industrial supplies 53.2 1.8

PhillipMorris Public Companies United States Tobacco & smoke-free products 53.1 1.8

Thermo Fisher Scientific Public Companies United States Pharma&lifesciencesservices 46.1 1.6

Hill & Smith Public Companies United Kingdom Infrastructure 45.7 1.5

AsiaAlternativesfunds Funds Asia Funds of funds 44.2 1.5

Unicorn funds Funds Asia Funds of funds 39.9 1.3

Ironbridge Funds Funds Canada Privateequityfunds 35.9 1.2

SIS PrivateCapital United Kingdom Contentservices 35.0 1.2

Stonepeak funds Funds United States Privateequityfunds 34.9 1.2

Spirax Sarco Public Companies United Kingdom Steam engineering 34.1 1.1

Boyne funds Funds United States Privateequityfunds 33.8 1.1

British American Tobacco Public Companies United Kingdom Tobacco&vaping 32.4 1.1

Moody’s Corporation Public Companies United States Financialservices 33.0 1.1

Charter Communications Public Companies United States Cable communications 32.5 1.1

Becton Dickinson Public Companies United States Medicaltechnology 28.6 1.0

CenterOakfunds Funds United States Privateequityfunds 28.3 1.0

Otherinvestments 735.2 24.9

Investmentportfolio 2,696.4 91.0

Cash and other net assets 268.9 9.0

1.Initslastauditedaccountsthecompany’sturnover,pre-taxprofitsandnetassetsattributabletoshareholderswere£82m,£21mand£2,797mrespectively.

Investmentcostis£32mandtotalrevenuerecognisedbyCaledoniaintheperiodis£8m.  

2.Investmentcostis£142mandtotalrevenuerecognisedbyCaledoniaintheperiodis£28m.

3.Investmentcostis£92mandtotalrevenuerecognisedbyCaledoniaintheperiodis£19m. 

4.Investmentcostis£51mandtotalrevenuerecognisedbyCaledoniaintheperiodis£1m.

5.Investmentcostis£138mandtotalincomerecognisedbyCaledoniaintheperiodis£3m.

6.Initslastauditedaccountsthecompany’sturnover,pre-taxprofitsandnetassetsattributabletoshareholderswere£31m,(£2)mand£38mrespectively.

Investmentcostis£97mandtotalincomerecognisedbyCaledoniaintheperiodis-£19m.

7.Investmentcostis£37mandtotalincomerecognisedbyCaledoniaintheperiodis-£nil.

Investments summary

155

Strategic report Corporate governance Financial statements

Other information

Introduction

Valuation methodology

Investmentsaremeasuredatthedirectors’estimateof

fairvalueatthereportingdate,inaccordancewithIFRS

13FairValueMeasurement.Fairvalueisthepricethat

wouldbereceivedtosellanassetinanorderly

transaction between market participants at the

measurementdate.

Publicly traded securities

Listedinvestmentsinanactivemarketarevaluedbased

ontheclosingbidpriceontherelevantexchangeonthe

reportingdate.Whenabidpriceisunavailable,theprice

ofthemostrecenttransactionwillnormallybeused.

Unquoted securities

Caledonia’svaluationmethodologyforunquotedsecurities

isderivedfromtheInternationalPrivateEquityand

VentureCapital(‘IPEV’)ValuationGuidelines(December

2022).Thisguidancecameintoeffectforperiods

beginningonorafter1January2023andsupersedes

previousguidance.

Unquoted companies

Unquotedcompanyinvestmentsarevaluedbyapplying

anappropriatevaluationtechnique,whichmakes

maximumuseofmarket-basedinformation,isconsistent

with models generally used by market participants and is

appliedconsistentlyfromperiodtoperiod,exceptwhere

achangewouldresultinabetterestimationoffairvalue.

Thevalueofanunquotedcompanyinvestmentisgenerally

crystalised through the sale or flotation of the entire

business,ratherthanthesaleofanindividualinstrument.

Therefore,theestimationoffairvalueisbasedonthe

assumed realisation of the entire enterprise at the

reportingdate.Recognitionisgiventotheuncertainties

inherentinestimatingthefairvalueofunquoted

companies and appropriate caution is applied in exercising

judgementsandinmakingthenecessaryestimates.

Thevaluationmethodologyappliesthefollowingsteps:

1. determinetheenterprisevalueusinganappropriate

valuationtechnique

2. adjusttheenterprisevalueforfactorsthatamarket

participantwouldtakeintoaccount,suchassurplus

assets,excessliabilitiesandothercontingencies

3.deductthevalueofinstrumentsrankingaheadof

thoseheldtoderivetheattributablevalue

4.apportiontheattributablevaluebetweenthe

remaining financial instruments

5.allocatetheamountsderivedaccordingtothe

holdingineachfinancialinstrument.

Valuation methods

Enterprisevalueisnormallydeterminedusingone

ofthefollowingvaluationmethodologies:

Multiples

Thismethodologyinvolvestheapplicationofanearnings

multiple to the maintainable earnings of the business

andislikelytobeappropriateforaninvestmentin

an established business with an identifiable stream

ofcontinuingearnings.

Maintainableearningsareassessedusingthelatest

availablefinancialdata.Earningsandbalancesheet

dataareadjusted,whereappropriate,forexceptional

ornon-recurringitemsandanaverageofmorethanone

year’s earnings may be used to estimate maintainable

earningsforcyclicalorvolatilebusinesses.

The earnings multiple used is most commonly earnings

beforeinterest,tax,depreciationandamortisation

(‘EBITDA’)andisdeterminedbyreferencetomarket-based

multiplesappropriateforthebusiness.Wherepossible,

anaverageofseveralappropriatemarketmultipleswill

beused.Theaimistoidentifycomparatorcompaniesthat

are similar in terms of risk and growth prospects to the

companybeingvalued.Thetransactionmultiplesofsimilar

comparator unquoted companies may also be considered

indeterminingtheearningsmultiple.

Multiplesofcomparablecompaniesmaybeadjusted

individuallyorinaggregatetoreflectpointsofdifference

betweenthecomparatorsandthecompanybeingvalued,

with reference to the risk profile and earnings growth

prospectsthatunderpintheearningsmultiple.Riskarises

fromarangeoffactors,includingthenatureofthe

company’soperations,markets,competitiveposition,

quality of management and employees and capital

structure.Otherreasonsforadjustmentmayincludethe

sizeanddiversityoftheentity,therateofgrowthof

earnings,relianceonkeyemployees,diversityofproducts

andcustomerbase,andthelevelofborrowing.

Adjustmentwillalsobeconsideredtotheextentthata

prospectiveacquirerwouldtakeaccountofadditionalrisks

associatedwithholdinganunquotedshare,includingtheir

abilitytodrivearealisationatwill.

156 Caledonia Investments plc Annual Report 2024

Net assets

The net assets methodology is likely to be appropriate for

abusinesswhosevaluederivesmainlyfromtheunderlying

valueofitsassetsratherthanitsongoingearnings,suchas

apropertyholdingcompanyoraninvestmentbusiness.It

may also be appropriate for a business that is not making

anadequatereturnonassetsandforwhichagreatervalue

can be realised by liquidating the business and selling its

assets.Athird-partyvaluationmaybeusedtogivethefair

valueofacertainassetorgroupofassets,mostcommonly

propertyassets.

Indicative offers

Weregularlyreceiveindicationsofinterestfrompotential

acquirersforourprivatecapitalassets,eitheraspartofa

structuredsaleprocessorintheformofadirectapproach.

Wherewejudgeitappropriate,theinsightgainedfrom

such approaches is incorporated into the data sets used

inarrivingatvaluations.Wherethereisanofferfrom

acrediblebuyerorbuyers,andthereisanintentionto

advancediscussions,ourpracticeistoconsiderfairvalues

derivedfromanindicativeenterprisevaluebasedonoffers

receivedwithanappropriatediscountapplied.Discounts

aim to reflect the unique uncertainty associated with the

execution of each transaction and are normally in a range

of5-20%.

Calibration and backtesting

Whenthepriceofaninitialinvestmentisdeemed

fairvalue(whichisgenerallythecaseiftheinvestment

isconsideredanorderlytransaction),thevaluation

techniques that are expected to be used to estimate

fairvalueinthefuturearecalibratedbyusingmarket

inputsatthedatetheinvestmentwasmade.Calibration

validatesthatthevaluationtechniquesusing

contemporaneous market inputs will generate fair

valueatinceptionandthereforegiveconfidencethat

subsequentvaluationsusingupdatedmarketinputswill

generatefairvalueateachfuturemeasurementdate.

Backtestingenablesthevaluertounderstandany

substantivedifferencesthatlegitimatelyoccurbetween

theexitpriceandthepreviousfairvalueassessment,

by applying the information known at exit to the

previousvaluationtechnique.Backtestingisused

tohelprefinethevaluationprocess.

Fund interests

Fund interests refer to participations in externally

managedinvestmentvehiclesthatinvestinawiderrange

ofassetsthanisfeasibleforanindividualinvestorto

valueseparately.

Open-endfunds,includinginvestmentcompanieswith

variablecapital,typicallyreportregularnetassetvalues,

whichusuallyprovideareliablebasistoestimatefair

value.Managementperiodicallyassesseswhether

reportednetassetvaluesarefairvaluebasedthrough

considerationofarangeofinformation,includingbut

notlimitedtounderlyingvaluationmethodologies,

governanceandassuranceframeworks,and

correspondencewiththird-partymanagers.Iftheprice

reportedbythefundisnotavailableatthereporting

date,thelatestavailablepriceisusedandmaybe

adjustedtotakeaccountofchangesoreventstothe

reportingdate,ifmaterial.

Closed-endfundsincludeunlistedinvestmentcompanies

andlimitedpartnerships.Fortheseinvestments,thefair

valueestimateisbasedonasummationoftheestimated

fairvalueoftheunderlyinginvestments(‘fundNAV’)

attributabletotheinvestor.FundNAVmaybeused

wherethereisevidencethatthevaluationisderived

usingfairvalueprinciples.FundNAVreportsarenormally

receivedsometimeafterthereportingdate,typically

twoorthreemonths,butsometimesuptosixmonths.

ThelatestavailablefundNAVwillnormallyprovidethe

basisofafairvalueestimate,adjustedforsubsequent

investmentsandrealisations.Adjustmentmayalsobe

necessary for features of the fund agreement not

capturedinthevaluationreport,suchasperformance

feesorcarriedinterest.ThetimingoffundNAVreports

createsariskofchangesoreventsoccurringbetween

thefundNAVandreportingdates,whichimpacts

valuation.Thisissueismonitoredcarefullyand,ifofa

materialnature,canleadtoadjustmentseitheratthe

specificfundlevelormorebroadlyacrosstherelevant

fundsaffectedbytheidentifiedchangeorevent.Ifa

decision has been made to sell the fund interest or

portionthereof,theexpectedsalepricewouldnormally

providethebestestimateoffairvalue.

Other investments

Otherinvestmentsincludepreferenceshares,loannotes

orfacilities,options,warrantsandtreasuryinstruments

that are not publicly traded and do not form part of an

investmentinanunlistedcompany.Forsuchinvestments,

appropriatevaluationtechniquesareadoptedand

usedconsistently.

Environmental, Social and Governance factors

Environmental,SocialandGovernance(‘ESG’)factors,

bothquantitativeandqualitative,mayimpactfairvalue.

OurfairestimatesthereforeincorporateESGinitiatives

andtheESGregulatoryenvironmenttotheextentthey

areknownorknowable.

157

Strategic report Corporate governance Financial statements

Other information

Introduction

Information for investors

Registrar

OurRegistraris:

LinkGroup(‘Link’)

Central Square

29WellingtonStreet

Leeds

LS14DL

Shareholderenquiries:(open9.00amto5.30pm)

03716640300or+443716440300ifcalling

fromoverseas

Sharedealingservice:(open8.00amto4.30pm)

03716640445or+443716640445ifcalling

fromoverseas

Callsto0371arechargedatthestandardgeographicrate

andwillvarybyprovider.CallsoutsidetheUnitedKingdom

arechargedattheapplicableinternationalrate.

Linkalsoprovidesanonlineservice,SignalShares,through

whichyoucanviewyourshareholdingdetails,transaction

anddividendhistories,changeyouraddress,bank

mandate and electronic communication preference and

usetheonlineproxyvotingservice.SignalSharesis

availableatwww.signalshares.com.

Financial calendar

Finaldividendex-dividenddate 27June2024

Finaldividendrecorddate 28June2024

Annualgeneralmeeting 17July2024

Finaldividendpaymentdate 1August2024

Half-yearresultsannouncement November2024

Anticipatedinterimdividendpaymentdate January2025

2025Annualresultsannouncement May2025

2025Annualreportpublication June2025

Electronic communications

Youmayelecttoreceivecommunicationsfromthe

companyelectronicallyviaitswebsiteasanalternativeto

receivinghardcopyaccountsandcirculars.Ifyouwould

liketochangeyourcommunicationpreference,youmay

dosoatwww.signalshares.comorbywritingtoLinkat

FREEPOSTSAS,LinkGroup,CentralSquare,29Wellington

Street,Leeds,LS14DL(ifyouareaUK-basedshareholder)

ortoSAS,LinkGroup,CentralSquare,29Wellington

Street,Leeds,LS14DL.Nostampisrequiredforletters

fromUKshareholders.

Share price information

The company’s ordinary shares are premium listed on the

LondonStockExchangeundertheSEDOLcodeof0163992

orTIDMcodeofCLDN.Pricesarepublisheddailyinthe

FinancialTimesunderthe‘InvestmentCompanies’heading

andinotherleadingnewspapersandcanalsobeviewed

onthecompany’swebsiteatwww.caledonia.com.

TheISINforCaledonia’sordinarysharesisGB0001639920.

Monthly net asset value

Thecompanyreleasesanetassetvalueannouncement

andpublishesafactsheetshortlyaftereachmonthend.

Thesecanbefoundonthecompany’swebsiteatwww.

caledonia.com.

Boiler room and other scams

Investmentandpensionscamsareoftensophisticatedand

difficulttospot.Shareholdersareadvisedtobewaryof

anyunexpectedoffersreceivedbyemail,postor

telephone and to check the Financial Conduct Authority’s

WarningListifanyunsolicitedcommunicationisreceived.

Visitwww.fca.org.uk/scamsmartformoreinformation.

158 Caledonia Investments plc Annual Report 2024

Directors and advisers

Chair

DavidCStewart

2,3

Executive directors

MathewSDMasters(ChiefExecutiveOfficer)

RobertWMemmott(ChiefFinancialOfficer)

JamieMBCayzer-Colvin

Non-executive directors

Farah A Buckley

2,3,4

The Hon Charles W Cayzer

GuyBDavison

1,2,4

MAnneFarlow

1,2,3,4

ClaireLFitzalanHoward

2,3,4

LynnRFordham

1,2,4

William P Wyatt

1. MemberoftheAuditandRiskCommittee

2. MemberoftheNominationCommittee

3. MemberoftheRemunerationCommittee

4. MemberoftheGovernanceCommittee

Secretary

Richard Webster

Registered office

Cayzer House

30 Buckingham Gate

LondonSW1E6NN

Registered number

RegisteredinEnglandno235481

Auditor

BDOLLP

55BakerStreet

LondonW1U7EU

Registrar

LinkGroup

Central Square

29WellingtonStreet

LeedsLS14DL

Brokers

J.P.MorganCazenove

25BankStreet

Canary Wharf

LondonE145JP

WinterfloodSecuritiesLtd

RiverbankHouse

2SwanLane

LondonEC4R3GA

Solicitors

FreshfieldsBruckhausDeringerLLP

100Bishopsgate

LondonEC2P2SR

159159

Strategic report Corporate governance Financial statements

Other information

Introduction

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160 Caledonia Investments plc Annual Report 2024

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ShareGift

WesupportShareGift,thecharitysharedonationscheme(registeredcharitynumber1052686).ThroughShareGift,shareholderswhohave

onlyasmallnumberofshares,whichmightbeconsidereduneconomictosell,areabletodonatethemtocharity.Donatedsharesare

aggregatedandsoldbyShareGift,theproceedsbeingpassedontoawiderangeofUKcharities.Seesharegift.orgorcall+442079303737

forfurtherdetails.

Updates

Ifyouwouldliketoreceiveup-to-dateinformationaboutthecompany,pleasescantheQRcodetotherightofthispagetovisitourwebsite.

Ifyouhaveasmartphone,youcanactivatetheQRcodebyopeningthecameraonyourdeviceandpointingitattheQRcode.Thiswillopen

alinktotheContactuspageonthewebsitewhereyoucansubscribetoreceiveoramendemailalertnotifications,includingfactsheets,

news,reportsand/orRNSannouncements.Tofindouthowweprocesspersonaldata,pleasereadthePrivacyPolicyavailableat

www.caledonia.com/privacy-policy.

Caledonia Investments plc

Cayzer House

30 Buckingham Gate

London SW1E 6NN

tel +44 20 7802 8080

email enquiries@caledonia.com

web www.caledonia.com