![]() 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 th #### 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 1 (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 1 (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 1 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 2 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% 0% 5% 10% CPIH 1 3% Over 10 years Caledonia NAVTR Caledonia Share Price TR FTSE All-Share TR Target return +10% +9% +6% +4% Industrials 3  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 3 ![]() 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 0% 5% 10% 15% Over 1 year Total Public Companies pool Over 3 years Over 5 years Over 10 years Capital Portfolio Income Portfolio 12% 9% 11% 9% 14% 10% 13% 10% 7% 6% 5% 6% #### 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% 0 20 40 60 80 100 120 140 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 5 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. 0% 10% 20% 30% Over 1 year Over 3 years Over 5 years Over 10 years 12% 24% 14% 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 74 86 97 117 98 145 198 225 298 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 Mar 23 Exit Invested cost Capital gain Cumulative dividends 7 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 0% 10% 5% 15% 20% Over 1 year Over 3 years Over 5 years Over 10 years 2% 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 9 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 12 #### Chief Executive Officer’s report 14 #### How we create value 18 #### Key performance indicators 20 #### Investment review 22 #### Public Companies 26 #### Financial review 38 #### Going concern and viability 62 #### Funds 34 #### Risk management 57 #### Private Capital 30 #### Sustainability 42 11 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 1 increasedfrom£44mto £63m 2 .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.       13 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 0% 5% 10% 15% CPIH 6% CPIH 4% CPIH 3% 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% +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)%. 0% 5% 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. 15 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. 17 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 19 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 0% 2% 4% 6% 8% 10% 12% 14% Caledonia NAVTRCPI-H +3% to CPI-H +6% Caledonia NAVTR Caledonia TSR FTSE All Share TR 0% 2% 4% 6% 8% 10% 12% 14% 16% 20242015 2016 2017 2018 2019 2020 2021 2022 2023 0 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 March 2014 March 2016 March 2018 March 2020 March 2022 March 2024 0 1,000 2,000 3,000 4,000 5,000 6,000 NAV/share over 10 years (p) 0% 2% 4% 6% 8% 10% 12% 14% Caledonia NAVTRCPI-H +3% to CPI-H +6% Caledonia NAVTR Caledonia TSR FTSE All Share TR 0% 2% 4% 6% 8% 10% 12% 14% 16% 20242015 2016 2017 2018 2019 2020 2021 2022 2023 0 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 March 2014 March 2016 March 2018 March 2020 March 2022 March 2024 0 1,000 2,000 3,000 4,000 5,000 6,000 Annual dividend/share over 10 years (p) 0% 2% 4% 6% 8% 10% 12% 14% Caledonia NAVTRCPIH +3% to CPIH+6% Caledonia NAVTR Caledonia TSR FTSE All Share TR 0% 2% 4% 6% 8% 10% 12% 14% 16% 20242015 2016 2017 2018 2019 2020 2021 2022 2023 0 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 March 2014 March 2016 March 2018 March 2020 March 2022 March 2024 0 1,000 2,000 3,000 4,000 5,000 6,000 NAVTR annualised 10-year rolling performance 0% 2% 4% 6% 8% 10% 12% 14% Caledonia NAVTRCPI-H +3% to CPI-H +6% Caledonia NAVTR Caledonia TSR FTSE All Share TR 0% 2% 4% 6% 8% 10% 12% 14% 16% 20242015 2016 2017 2018 2019 2020 2021 2022 2023 0 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 March 2014 March 2016 March 2018 March 2020 March 2022 March 2024 0 1,000 2,000 3,000 4,000 5,000 6,000 TSR annualised 10-year rolling performance 21 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 1 % 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 2  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% 23 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% 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% 2 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% 3 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% 4 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% 5 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% 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% 7 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% 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% 9 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% 10 Alltrademarksusedonpages24and25arethepropertyoftheirrespectiveownersandtheiruseheredoesnotimplyendorsement.   25 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 (%) 0% 5% 10% 15% 20% 1 year 3 years 5 years 10 years 12% 9% 11% 9% 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 0% 5% 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 27 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 0% 5% 10% 1 year 3 years 5 years 10 years 7% 6% 6% 5% 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$) 0 100 200 300 400 500 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 (£) 29 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 0% 10% 20% 30% Over 1 year Over 3 years Over 5 years Over 10 years 12% 24% 14% 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 1  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 31 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 8 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 33 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% 0% 10% 5% 15% 20% Over 1 year Over 3 years Over 5 years Over 10 years 2% 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 1 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 35 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 37 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 1 Total return 31Mar 2024 Totalinvestmentportfolio 2,534.7 346.3 (371.3) (45.7) 232.4 2,696.4 Otherinvestments 2 260.2 (2.9) (228.4) (10.9) 18.0 Total investments 3 2,794.9 343.4 (599.7) (45.7) 221.5 2,714.4 Net cash 221.6 227.4 Othernet(liabilities)/assets 4 (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 1 47.1 - 47.1 43.2 - 43.2 Netgainsonfairvalueinvestments-portfolio 2 - 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 1 14.7 - 14.7 - - - Net(losses)/gainsonfairvalueinvestments-otherinvestments 2 - (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 3 (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. 39 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 1  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 0 -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 0 $m Opening value Drawdowns New commitments Other Closing value 523.8 (116.1) 59.6 8.6 475.9 41 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 43 Strategic report Corporate governance Financial statements Other informationIntroduction 43 ![]() #### 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 1 Male 68% Female 32% Investment employees Male 37% Female 63% Support employees Investment and support employees 2024 1 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%) 45 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 47 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 1. Advisesandassistsin the continued developmentand implementation of our approach to ESG matters across the business 2. Seeks to ensure that ESG matters are appropriately factored into decision-making processes 3. Continues to develop understanding of climate-related matters 4. 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 49 Strategic report Corporate governance Financial statements Other informationIntroduction 49 ![]() #### 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. 51 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 2 e 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 2 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 3 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% 53 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 1 Scope Portfolio (2024) Benchmark (2024) Variancevs benchmark Portfolio (2023) Units Total carbon emissions 1and2 19,345 48,894 -60% 16,315 2 TonnesCO 2 e Carbon footprint 1and2 16 39 -58% 15 2 TonnesCO 2 e/$minvested WACI 1and2 60 95 -37% -50% TonnesCO 2 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 55 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. HR 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 57 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 59 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 61 Strategic report Corporate governance Financial statements Other informationIntroduction ![]() #### Going concern and viability 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 ![]() 63 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 66 #### Governance framework 68 #### Corporate governance report 70 #### Section 172 statement 74 #### Nomination Committee report 80 #### Audit and Risk Committee report 82 #### Directors’ remuneration report 90 #### Governance Committee report 88 #### Directors’ report 109 #### Responsibility statements 113 65 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 N A G N A G N R A G N A G N R Audit and Risk Governance Nomination Remuneration Committee chair Committee membership key Board diversity Male 7 Female 4 White 10 Asian/AsianBritish 1 67 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 ![]() 69 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 1 7 8 TJLivett 2 3 3 RWMemmott 3 5 5 JMBCayzer-Colvin 4 7 8 SJBridges 5 2 2 F A Buckley 8 8 Hon C W Cayzer 6 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. 71 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 73 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 75 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 77 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 ![]() 79 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 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 81 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 1 : 83 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. 85 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 1  £188,500 16% 2024 Auditfees £831,833 82% Non-audit fees 2  £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 87 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 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 89 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. 91 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 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 93 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. 95 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. 97 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 a RWMemmott b JMBCayzer-Colvin TJLivett c W P Wyatt d 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 1 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 2 338 203 175 n/a 234 176 153 185 n/a – Long-termincentives 3 453 521 - 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 99 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 RW Memmott b TJ Livett c 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 d - 41 - Cash 236 203 175 n/a 153 185 193 176 Total a 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 a 20 10.9 100 Capital portfolio TR b 80 12.9 100 2021 NAVTR a 20 13.1 100 Capital portfolio TR b 53.3 10.4 94 Income portfolio TR c 26.7 5.8 76 TJLivett 2019 NAVTR a 100 10.9 100 2021 NAVTR a 100 13.1 100 W P Wyatt 2019 NAVTR a 100 10.9 100 2021 NAVTR a 100 13.1 100 JMB Cayzer-Colvin 2019 NAVTR a 40 10.9 100 Funds pool TR d 60 16.0 100 2021 NAVTR a 20 13.1 100 Funds pool TR d 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 b £ MSDMasters 398,760 54,132 452,892 TJLivett a 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 a 59,423 521,275 TJLivett 248,248 b 26,943 275,191 JMBCayzer-Colvin 632,983 c 82,454 715,437 W P Wyatt 838,493 d 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 5 Total 9 2024 £’000 2023 £’000 2024 £’000 2023 £’000 2024 £’000 2023 £’000 D C Stewart 165 165 - 6 - 165 165 SJBridges 1 14 48 3 - 18 48 F A Buckley 2 49 1 - 7 - 49 1 Hon C W Cayzer 3 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 - - 8 57 53 W P Wyatt 4 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 1 - n/a 32,294 n/a 32,294 n/a TJLivett 2 - - 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 Share price at grant Shares comprised in award number 1 Receivableif minimum performance achieved 2 End of performance period 3 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 1 £’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 1 £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 1 2,852 n/a - n/a TJLivett 2 3,323 3,323 - - JMBCayzer-Colvin 3 249,435 250,024 198,554 198,554 SJBridges 4 5,309 5,309 - - F A Buckley 250 - - - Hon C W Cayzer 3 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 3 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 2 Vested but un- exercised 3 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 4 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 4 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 4 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 80 120 160 200 240 280 320 360 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 1,154 2 – 100.0 2023 MSDMasters 1 1,250 2 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 1 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 2 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 3 (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 4 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 5 (70.5) 100 – 6.1 – n/a – – n/a – – n/a F A Buckley 6 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 7 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 80 60 40 20 0 £m Personnel expenses Dividends/share purchases 2024 2023 a £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 1 Strategic report 60 Likelyfuturedevelopments in the business 1 Strategic report 60-61 Engagementwithsuppliers, customers and others 1 Corporategovernance report,Section172 statement 76-78 Greenhousegasemissions, energy consumption and energy efficiency action 1 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). Shares 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 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. © Doon Williams 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 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 Financial statements Other informationIntroduction ![]() 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 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 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 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 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 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 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 2 3 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 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 1 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 | | | | | | | | 1 1 2 1 1 1 1 1 1 1 2 1 1 1 1 2 1 1 1 3 3 3 3 3 3 3 3 4 4 4 4 1 1 1 4 4 4 4 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 1 1 1 1 1 5 5 5 5 5 5 5 5 5 5 5 5 150 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 | 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 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 p Annual dividend p Net assets £m Diluted NAV per share p Share price p 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 1 PrivateCapital Europe Investmentcompany 181.0 6.1 AIR-servEurope 2 PrivateCapital United Kingdom Forecourtvending 170.1 5.7 Stonehage Fleming 3 PrivateCapital Channel Islands Familyofficeservices 168.5 5.7 HighVista Strategies 4 Funds United States Funds of funds 139.7 4.7 LiberationGroup 5 PrivateCapital Channel Islands Pubs,bars&inns 135.2 4.6 CookeOptics 6 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 7 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 2 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 2 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 #### Page intentionally blank 160 Caledonia Investments plc Annual Report 2024 ![]() This report is printed on paper certified in accordance with the FSC® (Forest Stewardship Council®) and is recyclable and acid-free. Pureprint Group is FSC certified and ISO 14001 certified showing that it is committed to all-round excellence and improving environmental performance is an important part of this strategy. Pureprint Group aims to reduce at source the effect its operations have on the environment and is committed to continual improvement, prevention of pollution and compliance with any legislation or industry standards. Printed by Pureprint Designed and produced by www.designmotive.co.uk 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