Caledonia Investments : Notice of the general meeting to be held on 18 December 2024

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in doubt about what action to take, you should consult an appropriate independent professional adviser who is authorised under the Financial Services and Markets Act 2000.

If you have sold or otherwise transferred all your Ordinary Shares, please send this document, but not, if you have received one, the accompanying personalised proxy form, at once to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. If you have purchased Ordinary Shares after the date of this document, you should contact Link Group using the address set out in section 7 of the Chair's Letter, if you wish to request a new paper proxy form.

J.P. Morgan Securities plc, which conducts its United Kingdom investment banking business as J.P. Morgan Cazenove and which is authorised in the United Kingdom by the Prudential Regulation Authority and regulated in the United Kingdom by the Prudential Regulation Authority and the Financial Conduct Authority, is acting exclusively for Caledonia in connection with the Waiver Resolution and for no one else and will not be responsible to anyone other than Caledonia for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, or for giving advice in connection with any matter referred to in this circular or any other matter or arrangement referred to herein.

CALEDONIA INVESTMENTS PLC

(Registered in England and Wales under No. 235481)

Notice of General Meeting

including proposals for the renewal of the Company's authority to make market purchases of its Ordinary Shares and a waiver of the requirements of Rule 9 of the City Code on Takeovers and Mergers

Notice of a general meeting of Caledonia to be held at Cayzer House, 30 Buckingham Gate, London SW1E 6NN at 2.00 pm on 18 December 2024 (the 'General Meeting') is set out at the end of this document.

Proxy appointments for the General Meeting should be completed and returned as soon as possible and, to be valid, must be deposited so as to be received no later than 2.00 pm on 16 December 2024 with the Company's registrar, Link Group, by one of the following methods: (i) if using a paper proxy form, by post to the address provided for such purpose in the proxy form or by hand during normal business hours to Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds LS1 4DL; or (ii) online at www.signalshares.com using the Ordinary Shareholder's investor code; or (iii) electronically via the registrar's app LinkVote+ which is free to download via the Apple App Store or Google Play and compatible with smartphones and tablets; or (iv) in the case only where Ordinary Shares are held in CREST (as an alternative to methods (i), (ii) and (iii)), via the CREST Proxy Voting Service; or (v) for institutional investors, via the Proxymity platform (www.proxymity.io).

Contents

	Page
Part I - Letter from the Chair	3
Part II - Explanatory Notes on the Resolutions	10
Part III - Additional information relating to the Waiver Resolution	12
Part IV - Documents available for inspection	25
Notice of General Meeting	26
Definitions	29

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Part I - Letter from the Chair

	Caledonia Investments plc
	Registered and head office
	Cayzer House
	30 Buckingham Gate
	London SW1E 6NN
	Registered in England and Wales under
	No. 235481
26 November 2024
Directors:
David C Stewart	(Chair)
Mathew S D Masters	(Chief Executive Officer)
Robert W Memmott	(Chief Financial Officer)
Jamie M B Cayzer-Colvin1	(Executive Director)
Farah A Buckley	(Non-Executive Director)
The Hon Charles W Cayzer1	(Non-Executive Director)
Guy B Davison	(Senior Independent Non-Executive Director)
M Anne Farlow	(Non-Executive Director)
Claire L Fitzalan Howard	(Non-Executive Director)
Lynn R Fordham	(Non-Executive Director)
William P Wyatt¹	(Non-Executive Director)
1Concert Party Directors.

To Ordinary Shareholders and, for information only, holders of awards under the PSS and the Deferred Bonus Plan.

Dear Shareholder

1. Introduction and background

We are writing to outline a proposal to refresh the Company's existing authority to make market purchases of Ordinary Shares and at the same time seek approval from Independent Shareholders of a waiver from the mandatory offer requirement in the Takeover Code that may otherwise apply to the Concert Party as a result of any exercise of the Authority to Make Market Purchases. While this proposal is similar to the annual authority and waiver sought in recent years, it differs in one important respect. The approval of this waiver does not include a cap on the percentage of the Ordinary Shares that the Concert Party can hold following the exercise by the Company of the new Authority to Make Market Purchases.

This letter explains resolutions to be proposed at the General Meeting and why the Non-Concert Party Directors believe the proposal is in the best interests of the Company and are unanimously recommending that Independent Shareholders vote in favour of the Waiver Resolution.

The Company's aim is to generate long-term compounding real returns that outperform inflation by 3 per cent. to 6 per cent. over the medium to long term, and the FTSE All-Share index over 10 years. The Company is a long-term investor in both listed and private markets across three investment pools: Public Companies, Private Capital and Funds, each investing in high-quality, well-managed companies with long- term growth characteristics. The result is a well-balanced diversified portfolio of investments with a global reach. This approach has delivered long-term real returns with an average Net Asset Value per Ordinary Share total return of 9.6 per cent. per annum over the 10 years to 30 September 2024, outperforming inflation by 6.7 per cent. and the FTSE All-Share index by 3.3 per cent. over that period. However, the investment trust sector continues to face a number of headwinds which have weighed on the share price performance of trusts across the market including that of the Company. As at 31 October 2024 (being the

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date of the Company's latest published Factsheet), the Ordinary Shares traded in the market at a 39.4 per cent. discount to the Net Asset Value per Ordinary Share.

The Board believes it is important for shareholders to capture more fully the benefit from the long-term increase in Net Asset Value per Ordinary Share. In recent years, the widening of the discount has resulted in total shareholder return substantially underperforming growth in the Net Asset Value per Ordinary Share. In particular, the Board believes the Company's share price undervalues the Company's high quality and diverse portfolio, its long-term track record and its future prospects.

Alongside continuing to deliver long-term real returns, addressing the discount is a priority for the Board and the Company's management team. To help ensure the Company's investment proposition is recognised by the market, over the past year the Company has improved disclosure, expanded press engagement, revitalised its approach to investor relations and focused on increasing engagement with retail investors. These efforts will continue to be enhanced and, among other things, will include a series of events spotlighting each of the Company's investment pools, commencing with Private Capital in early 2025.

The Company has also been using its ordinary course annual authority to make market purchases of its Ordinary Shares. Between 22 March 2024 and the Latest Practicable Date, the Company purchased 1,037,224 Ordinary Shares for £35.9 million. The effect of market purchases of Ordinary Shares in recent periods has been to enhance the Company's track record of delivering long term investment performance. The Board believes that the long-term compounding investment objective of the Company makes market purchases of Ordinary Shares at wide discounts to their underlying Net Asset Value per Ordinary Share highly appealing.

Following our regular discussion with our Independent Shareholders, the Board has been carefully considering the possibility of taking steps to ensure that the Company can continue to make market purchases of Ordinary Shares. The Board continues to believe that market purchases of Ordinary Shares at the current discount to Net Asset Value per Ordinary Share are accretive to ongoing Ordinary Shareholders and believes that it is in the best interests of the Company and Ordinary Shareholders as a whole to ensure that the Company is able to continue to do so.

As a result of recent purchases of Ordinary Shares by the Company, the Concert Party's percentage of shares carrying voting rights of the Company as at the Latest Practicable Date was approximately 49.49 per cent. Accordingly, the Company's ability to buy back any further shares is severely constrained by the existing cap on the Concert Party's maximum potential percentage interest referred to below.

2. Rule 9 of the Takeover Code and the Concert Party

Under Rule 9.1 of the Takeover Code, when:

1. any person acquires an interest in shares which, taken together with shares in which that person or any person acting in concert with that person is interested, carry 30 per cent. or more of the voting rights of a company which is subject to the Takeover Code (Rule 9.1(a)); or
2. any person, together with persons acting in concert with that person, is interested in shares carrying in aggregate at least 30 per cent., but does not hold shares carrying more than 50 per cent., of the voting rights of a company which is subject to the Takeover Code, and such person or any person acting in concert with that person increases the percentage of voting rights in which that person is interested (Rule 9.1(b)),

such person is normally required to make an offer to all the remaining shareholders to acquire their shares. In certain circumstances, a company which has such a concert party may seek a waiver from this requirement.

Rule 37 of the Takeover Code extends the principle in Rule 9 of the Takeover Code so that, when a company purchases its own shares, any resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting in concert is interested will be treated as an acquisition for the purposes of Rule 9.

The Company has agreed with the Panel that a group of Ordinary Shareholders should be treated as acting in concert for the purposes of the Takeover Code. As at the Latest Practicable Date, these shareholders, being the Concert Party Directors, Cayzer Trust, the Employee Share Trust, the directors of Cayzer Trust and other members of the wider Cayzer family, details of whom are disclosed in paragraph 4.6 of Part III of this document, between them were interested in 26,541,927 Ordinary Shares, representing approximately 49.49 per cent. of the shares carrying voting rights of the Company. The Concert Party's highest percentage

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of shares carrying voting rights held in the 12 months prior to the Latest Practicable Date was approximately 49.49 per cent.

The percentage of Ordinary Shares in which the Concert Party is interested could be increased by the Company's market purchases of Ordinary Shares, which could result in members of the Concert Party being obliged to make an offer for the entire issued Ordinary Share capital of the Company. As a result, in consultation with the Panel, the Company seeks annually from the Panel and Independent Shareholders at its annual general meeting the approval of a waiver from this obligation (a 'Rule 9 Waiver') in connection with its ordinary course annual authority to make market purchases of Ordinary Shares.

Historically, the Company has requested the annual Rule 9 Waiver on the basis that the maximum percentage of Ordinary Shares in which the Concert Party could become interested as a result of the Company's market purchases of Ordinary Shares will not exceed 49.9 per cent. As such, the Company would not be able to make market purchases of Ordinary Shares which could result in the percentage of voting rights in which the Concert Party is interested exceeding 49.9 per cent without triggering an obligation for the Concert Party to make a mandatory offer under Rule 9 of the Takeover Code.

As at the Latest Practicable Date, the Concert Party's interest in Ordinary Shares represented approximately

49.49 per cent. of the shares carrying voting rights of the Company, so is approaching the level at which the Company will not be able to make any further market purchases of Ordinary Shares under the current Rule 9 Waiver without triggering an obligation for the Concert Party to make a mandatory offer under Rule 9 of the Takeover Code.

3. The Proposals

For the reasons described in section 1, having consulted with the Panel, the Company is seeking from Independent Shareholders the approval of a new Waiver Resolution that does not include a 49.9 per cent. cap on the Concert Party's maximum interest in Ordinary Shares. This would allow optionality for the Company to make additional market purchases of Ordinary Shares when the Board believes it is in the best interests of the Company to do so. An ancillary benefit is that if, and for so long as, the aggregate Concert Party holding subsequently exceeds 50 per cent., the significant time and cost of seeking an annual Rule 9 Waiver would be removed. The Concert Party is not permitted to vote on the Waiver Resolution.

As detailed further in section 5 below, the Concert Party has confirmed that it remains fully supportive of the Company's management and has no intention to make any changes to the future business or the strategic direction of the Company. If this proposal is approved by a majority of Independent Shareholders, it is not expected to affect the running of the Company, its inclusion in the FTSE 250 index or remove any rights of an Ordinary Shareholder. The Takeover Code continues to apply to the Company. The Board and the management team would remain focused on the same objective of delivering long-term, compounding returns for all Ordinary Shareholders.

4. Proposal to seek a new Authority to Make Market Purchases and revised Waiver Resolution

The Board is therefore proposing resolutions to Ordinary Shareholders to:

1. authorise the Company to purchase up to a maximum of 2,681,322 ordinary shares of 5p each, or such other number of ordinary shares as may represent a total nominal value of £134,066, which represents approximately 5 per cent. of the issued Ordinary Shares as at the Latest Practicable Date, such authority to expire on 26 May 2026 or, if earlier, at the conclusion of the 2026 AGM; and
2. waive any requirement on the Concert Party to make an offer to all shareholders of the Company which could arise as a result of an exercise of this new Authority to Make Market Purchases.

The Concert Party will not be permitted to vote on the Waiver Resolution. If the Resolutions are passed, they will replace the existing authorities granted at the 2024 AGM.

The Authority to Make Market Purchases and the Waiver Resolution are each conditional upon the other being approved. If either of the Resolutions is not approved, the Company's existing authority to make market purchases granted at the 2024 AGM, and the related Rule 9 Waiver (which contains the 49.9 per cent. cap on the Concert Party's interest in Ordinary Shares) will remain in force.

It is important for Independent Shareholders to note that, if the Waiver Resolution is passed and the maximum number of Ordinary Shares is bought back by the Company pursuant to the Authority to Make Market Purchases (and assuming that no Ordinary Shares are sold by the Concert Party), then

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the Concert Party would, in aggregate, hold Ordinary Shares carrying 52.10 per cent. of the voting share capital of the Company.

If, and for so long as, the Concert Party holds Ordinary Shares carrying over 50 per cent. of the voting rights of the Company, it may increase its percentage holding in Ordinary Shares without incurring any obligation to make an offer under Rule 9, although individual members of the Concert Party will not be able to increase their percentage interests in shares above 30 per cent. (or, if already holding between 30 and 50 per cent. of the Ordinary Shares, at all) without Panel consent (whether through market purchases by the Company or through the Concert Party acquiring further interests in Ordinary Shares).

If, and for so long as, the Concert Party's holding exceeds 50 per cent. of the voting rights of the Company, the Company will not be required to seek a further Rule 9 Waiver to make market purchases of its Ordinary Shares. The Company will still need to refresh its ordinary course authority to make market purchases of its Ordinary Shares and all Ordinary Shareholders will be able to vote on the relevant resolution.

5. Background to and reasons for the Non-Concert Party Directors' recommendation of the Waiver Resolution

The Non-Concert Party Directors have carefully considered how the interests of the Company and Independent Shareholders may be affected by these proposals.

In considering whether to recommend the Waiver Resolution to Independent Shareholders, the Non-Concert Party Directors have taken into account: (i) their belief that the ability to make market purchases of Ordinary Shares continues to be in the best interests of the Company and Ordinary Shareholders as a whole; and (ii) the potential increase in the aggregate Concert Party holding. They have also taken particular account of the following matters.

The Concert Party's intentions for the Company and the impact of the proposals on the Company

The Concert Party has confirmed that it remains fully supportive of the Company's management and has no intention to make any changes to: (i) the future business of the Company, (ii) the continued employment of the employees and management of the Company and its subsidiaries (including material changes in their employment conditions or the balance of their skills and functions); (iii) its pension scheme arrangements;

1. its fixed assets; or (v) the existing trading facilities for Ordinary Shares in the Company. The Concert Party has also confirmed to the Company that it has no intentions to make any changes in relation to the strategic direction of the Company, including in respect of its status as a listed company, the location of its place of business or its headquarters and associated functions. The Company does not carry out research and development.

As detailed in section 4 above, if, and for so long as, the Concert Party holds Ordinary Shares carrying over 50 per cent. of the voting rights of the Company, it may increase its percentage holding in Ordinary Shares without incurring any obligation to make an offer under Rule 9. Although members of the Concert Party will regularly consider their options in light of prevailing market conditions, Cayzer Trust recognises the importance of the Company maintaining HMRC-approved investment trust status and neither the Cayzer Trust, nor the Concert Party Directors (together with their controlled companies), intends to make market purchases of Ordinary Shares from shareholders outside of the Concert Party that would erode to a material extent the opportunity for wider on-market buybacks by the Company.

Investment trust status and Relationship Agreement

The Company is an HMRC-approved investment trust for the purpose of Chapter 4 Part 24 of the Corporation Tax Act 2010. The Non-Concert Party Directors believe that it is in the Company's best interests to maintain this tax status. One of the requirements for the Company to continue to benefit from this tax status is that it cannot be a 'close' company. One way in which the Company may become 'close' is if less than 35 per cent. of its issued voting share capital is in public hands.

Ordinary Shares may not be considered to be in public hands if, for example, they are held by a Director or employee benefit trust of the Company, or a 'principal member'. Any person who, together with their associates, holds voting discretion in relation to more than 5 per cent. of the voting shares in a Company may be a 'principal member' for these purposes. Certain of the Ordinary Shares held by the Concert Party are not considered to be in public hands, which includes Ordinary Shares held by Cayzer Trust as a 'principal member'. The Board is aware that, in order to avoid any inadvertent breach of the legislation,

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sufficient headroom will need to be maintained in order to ensure that at all times at least 35 per cent. of the Company's issued voting share capital is in public hands.

In 2014, the Company entered into a relationship agreement with Cayzer Trust and separately with the trustee of the Employee Share Trust. This agreement automatically terminated in July 2024 when the Listing Rules were amended to remove the requirement for a premium listed company with a controlling shareholder or shareholders (being a person or persons acting in concert who exercise or control 30 per cent. or more of the Company's voting rights) to enter into a written and legally binding agreement to ensure that the controlling shareholder undertakes to comply with certain independence provisions.

The Company and Cayzer Trust have agreed to enter into a revised relationship agreement, conditional upon the Waiver Resolution being duly passed. Under the new relationship agreement entered into between the Company and Cayzer Trust on 26 November 2024 (the 'Relationship Agreement'), conditional on the Waiver Resolution being duly passed, Cayzer Trust has agreed to, and will use its reasonable endeavours to procure that other members of the Concert Party will:

•

•

•

•

conduct all transactions and arrangements with the Company and other Group members at arm's length and on normal commercial terms;

not undertake any action, including proposing a shareholders' resolution, that would have the effect of preventing the Company from complying with its obligations under the Listing Rules;

maintain a list of the members of the Concert Party from time to time and work with the Company to provide information to support the Company's assessment of its compliance with the requirements to maintain investment trust status; and

if necessary, discuss in good faith with the Company any actions that the Company considers may be reasonably necessary to protect the Company's investment trust tax status.

The Non-Concert Party Directors consider that the Relationship Agreement will reinforce the longstanding relationship between the Company and Cayzer Trust. They consider the terms to be proportionate in the context of: (i) the confirmations given by the Concert Party and Cayzer Trust as set out above; and (ii) the alignment of interests between the Company, the Concert Party and all Ordinary Shareholders in seeking to ensure that the Company maintains its investment trust status.

Splitting of Employee Share Trust

The Company's Employee Share Trust has historically been included in the Concert Party, largely because, in addition to current and former employees, it holds Ordinary Shares to satisfy awards made to members of the Concert Party who are also current or former directors or employees of the Group under the Company's employee share schemes.

The Company has now agreed to settle a new employee share trust, The Caledonia 2024 Employee Benefit Trust, that is for the benefit of all employees but expressly excludes members of the Concert Party from the definition of 'Beneficiaries' in its terms. This means that the new employee share trust does not hold any Ordinary Shares required to satisfy awards made to members of the Concert Party. The Company has agreed with the Panel that the new employee share trust will not be a member of the Concert Party.

The Company envisages that the existing Employee Share Trust will, going forward, be used primarily to satisfy awards made to members of the Concert Party, and will itself remain a member of the Concert Party. The Employee Share Trust currently holds 133,205 Ordinary Shares, of which approximately 116,436 may be required to satisfy awards held by members of the Concert Party, that are scheduled to vest over the next five years. The 'surplus' Ordinary Shares may be used to satisfy awards held by employees who are not members of the Concert Party in the near term. The shareholding of the Employee Share Trust will then be maintained at a level necessary only to satisfy awards held by members of the Concert Party.

The Non-Concert Party Directors believe that, in addition to alleviating some of the practical challenges presented by the Company's sole employee share trust being a member of the Concert Party, this approach will give Independent Shareholders a clearer picture of the number of Ordinary Shares that are held by the Employee Share Trust to satisfy awards to members of the Concert Party.

Shareholder Consultation

The Company has carried out a consultation exercise with a significant proportion of Independent Shareholders who have historically voted at previous general meetings. During this process, the possibility

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of seeking approval of a new Waiver Resolution that does not include a 49.9 per cent. cap on the Concert Party's maximum interest in Ordinary Shares was discussed.

Summary

In making their recommendations, the Non-Concert Party Directors have carefully considered (a) the impact of the Concert Party being permitted to hold Ordinary Shares carrying over 50 per cent. of the voting rights of the Company, including the ability for the Concert Party to increase its percentage holding in Ordinary Shares without incurring any obligation to make an offer under Rule 9 (whether through market purchases by the Company or through the Concert Party acquiring further interests in Ordinary Shares); and (b) the corresponding benefit to the Company and Ordinary Shareholders as a whole of the opportunity for the Company to continue to make market purchases; and have concluded that the Resolutions are in the best interests of the Company and Ordinary Shareholders as a whole.

6. Recommendations

Resolution 1: the Authority to Make Market Purchases

The Board believes the Authority to Make Market Purchases to be in the best interests of the Company and Ordinary Shareholders as a whole. Accordingly, the Board recommends that Ordinary Shareholders vote in favour of the Authority to Make Market Purchases at the General Meeting, as the Directors and certain of their close family members and connected persons intend to do in respect of their own beneficial holdings of Ordinary Shares, which amount to approximately 3.01 per cent. of the issued Ordinary Shares.

Resolution 2: the Waiver Resolution

The Non-Concert Party Directors, who have been so advised by J.P. Morgan Cazenove, consider the waiver of the obligations that could arise on the Concert Party to make an offer under Rule 9 of the Takeover Code on the exercise of the Authority to Make Market Purchases to be fair and reasonable and in the best interests of the Independent Shareholders and the Company as a whole. In providing its advice to the Non-Concert Party Directors, J.P. Morgan Cazenove has taken into account the Non- Concert Party Directors' commercial assessments.

Accordingly, the Non-Concert Party Directors unanimously recommend that Independent Shareholders vote in favour of the Waiver Resolution, as the Non-Concert Party Directors and certain of their close family members and connected persons intend to do in respect of their own beneficial holdings of Ordinary Shares, which amount to approximately 0.17 per cent. of the issued Ordinary Shares.

In accordance with the provisions of the Takeover Code, the Concert Party is considered to be interested in the outcome of the Waiver Resolution and, accordingly, none of its members will vote on this resolution.

7. Action to be taken

You will find set out at the end of this document the notice convening the General Meeting, at which the resolutions referred to above will be proposed.

You are encouraged to lodge a proxy form for use at the General Meeting with the Company's registrar, Link Group, as soon as possible. To be valid, proxy forms must be deposited with Link Group, so as to be received no later than 2.00 pm on 16 December 2024, by one of the following methods: (i) if using a paper proxy form, by post to the address provided for such purpose in the proxy form or by hand during normal business hours to Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds LS1 4DL; or (ii) online at www.signalshares.com using your investor code; or (iii) electronically via the registrar's app LinkVote+ which is free to download via the Apple App Store or Google Play and compatible with smartphones and tablets; or (iv) in the case only where Ordinary Shares are held in CREST (as an alternative to methods (i),

1. and (iii)), via the CREST Proxy Voting Service; or (v) for institutional investors, via the Proxymity platform (www.proxymity.io). The return of a proxy form would not ordinarily preclude you from attending the General Meeting and voting in person should you wish to do so.

If you are a CREST Member and wish to appoint a proxy or proxies through the CREST Proxy Voting Service for the General Meeting and any adjournment(s) thereof, you may do so by using the procedures described in the CREST Manual. Appointing a proxy or proxies through the CREST Proxy Voting Service is more fully explained in the notice convening the General Meeting set out at the end of this document.

Please note that only Independent Shareholders are entitled to vote on the Waiver Resolution and that the votes on the Resolutions will be by way of polls. Accordingly, it is very important that a proxy

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form is duly completed by Ordinary Shareholders and returned or submitted by one of the methods described above.

Further information

Your attention is drawn to the further information set out in Parts II and III of this document.

Yours faithfully

David Stewart

Chair

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Part II - Explanatory Notes on the Resolutions

Resolution 1: Authority for the Company to make market purchases of its Ordinary Shares

Authority was granted by Ordinary Shareholders of the Company at the 2024 AGM to purchase up to a maximum of 5,437,344 Ordinary Shares, representing approximately 10 per cent. of the then issued Ordinary Shares. Ordinary Shareholders are being asked by this resolution 1, which will be proposed as a special resolution, on a poll, to grant a new authority (which will, if passed, replace the existing authority granted at the 2024 AGM) to the Company to purchase up to a maximum of 2,681,322 ordinary shares of 5p each, or such other number of ordinary shares as may represent a total nominal value of £134,066, which represents approximately 5 per cent. of the issued Ordinary Shares as at the Latest Practicable Date.

If the Authority to Make Market Purchases is passed, it will empower the Company to make market purchases on the London Stock Exchange of up to 2,681,322 ordinary shares of 5p each, or such other number of ordinary shares as may represent a total nominal value of £134,066, at a price per Ordinary Share not more than the higher of:

1. 5 per cent. above the average of the middle market quotations for Ordinary Shares during the five Business Days preceding any such purchase; and
2. the higher of:
3. 1. the price of the last independent trade in Ordinary Shares; and
   2. 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.

The Authority to Make Market Purchases will only be utilised if the Board believes that purchases of Ordinary Shares will be in the best interests of Caledonia and Ordinary Shareholders as a whole and will result in an increase in Net Asset Value per Ordinary Share. In considering whether to exercise the Authority to Make Market Purchases, the Board will take into account both the longer-term investment opportunities available to Caledonia and any discount at which the Ordinary Shares are trading in the market relative to the Net Asset Value per Ordinary Share.

The Authority to Make Market Purchases, if granted, will expire on 26 May 2026 or, if earlier, at the conclusion of the 2026 AGM of the Company.

Ordinary Shares purchased by the Company pursuant to the Authority to Make Market Purchases may be cancelled, or held in treasury and subsequently cancelled, or sold for cash, or used to satisfy share-based awards issued to employees pursuant to the PSS. Since the 2024 AGM, under the existing authority granted at that meeting, the Company has purchased 593,357 Ordinary Shares (all of which have been subsequently cancelled). No Ordinary Shares are currently held in treasury.

There are currently outstanding awards over 910,751 Ordinary Shares under the PSS and over 65,483 Ordinary Shares under the Deferred Bonus Plan, in aggregate representing approximately 1.82 per cent. of the issued Ordinary Shares as at the Latest Practicable Date. If the Authority to Make Market Purchases was exercised in full, the Ordinary Shares under award would represent approximately 1.92 per cent. of the issued Ordinary Shares. It is, however, the Board's policy, where possible, to source awards exercised under the PSS using Ordinary Shares held by an employee benefit trust (being the Employee Share Trust, The Caledonia 2024 Employee Benefit Trust or such other new employee share trust as may be created), thereby avoiding dilution of Ordinary Shareholders' holdings. Awards exercised under the Deferred Bonus Plan may only be satisfied using Ordinary Shares held by an employee benefit trust.

Resolution 2: Waiver of mandatory offer provisions set out in Rule 9 of the Takeover Code

As described in Part I of this Circular, in accordance with Rule 37 and Appendix 1 of the Takeover Code, the Panel has agreed to waive any requirement on the Concert Party to make an offer to all shareholders of the Company which could arise as a result of an exercise of the Authority to Make Market Purchases, provided that the Independent Shareholders have passed, on a poll, the Waiver Resolution.

Accordingly, Independent Shareholders are being asked to approve, on a poll, the Waiver Resolution. The members of the Concert Party will not be permitted to vote on the Waiver Resolution.

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