Caledonia Investments : Audited accounts of Caledonia for the financial year ended 31 March 2022

Annual Report 2022

Year ended 31 March 2022

Introduction

• Welcome to Caledonia
  2 Group overview
  3 Performance highlights
  4 Chairman's statement
  6 Chief Executive's report
  10 Our business model
  14 Section 172 statement

18 Business review

1. Investment review

1. Quoted Equity

1. Private Capital

1. Funds

1. Financial review

1. Valuation methodology

1. Risk management

1. Going concern and viability

1. Sustainability

60 Directors' report

62 Board of directors

1. Corporate governance report

1. Nomination Committee report

1. Audit Committee report

1. Governance Committee report
2. Directors' remuneration report

1. Other governance matters

1. Responsibility statements

96 Financial statements

1. Independent auditor's report

1. Financial statements

1. Significant accounting policies

1. Notes to the financial statements

132 Other information

132 Company performance record

1. Glossary of terms and alternative performance measures

1. Information for investors

Image theme

Looking to the future and identifying new opportunities.

Introduction

Business review

Directors' report

Financial statements

Other information

Welcome to Caledonia

Caledonia is a self-managed investment trust company with net assets of £2.8bn. Our purpose is to grow net assets and dividends paid to shareholders over the long term, whilst managing risk to avoid permanent loss of capital. We achieve this

by investing in proven well-managed businesses that combine long-term growth characteristics with, in many cases, an ability to deliver increasing levels of income. We hold investments in both listed and private markets, a range of sectors and, particularly through our fund investments, we have a global reach. The success

of this strategy can be seen in the performance of Caledonia's NAV per share total return measured against the FTSE All-Share since 1987 and a record of 55 years of increasing annual dividends.

NAV total return growth since 1987

Caledonia NAV TR

FTSE All-Share TR

2,400

2,000

1,600

1,200

800

400

0	1987	1997	2002	2007	2012	2017	2022

Find out more

www.caledonia.com

Sources: Caledonia Investments plc and FTSE International Limited ('FTSE') © FTSE 2022. 'FTSE®' is a trade mark 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.

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Group overview

Caledonia is a self- managed investment trust company with net assets of £2.8bn. We hold investments in both listed and private markets, covering a range of sectors and, particularly through our fund investments, we have global reach.

All data as at 31 March 2022.

Group NAV £2,783m

(31 March 2021 £2,225m)

	Quoted Equity	£830m
	Private Capital	£782m
	Funds	£794m
	Other	£377m

Top 10 investments

1. Seven Investment Management
2. Cobehold
3. Stonehage Fleming
4. Liberation Group
5. Cooke Optics
6. Aberdeen US PE funds
7. Axiom Asia funds
8. Microsoft
9. Watsco
10. Oracle

Quoted Equity		Private Capital		Funds
Further detail		Further detail		Further detail
Turn to page 24		Turn to page 28		Turn to page 32

35-50%

Strategic asset allocation

Two concentrated portfolios of listed equities, pursuing capital and income strategies.

Capital portfolio: Mature, well- managed companies with significant presence in their market space and where assets consistently produce strong returns on capital.

Target 10% total annual return with no income constraint

Income portfolio: Mature, long-termcompanies with business models that are both resilient and have the capacity and management culture to pay sustainable dividends.

Target 7% total annual return and 3.5% yield on cost

35-45%

Strategic asset allocation

Majority and significant minority holdings in private companies, focusing principally on established UK businesses, led by sound management teams, where our target investment size of £50m to £125m provides a meaningful presence and growth capital.

Target 14% total return and 5% yield

20-30%

Strategic asset allocation

Private equity funds and fund of funds providing a broad exposure to areas of the world where it would prove more difficult for Caledonia to invest directly, predominantly in North America and Asia.

Target 12.5% total return

2 Caledonia Investments plc Annual Report 2022

Introduction

Business review

Directors' report

Financial statements

Other information

Performance highlights For the year ended 31 March 2022

• Net asset value per share total return of 27.9%
• Annual dividend per share up 3% to 64.8p
• 55th consecutive year of annual dividend increases
• Special dividend per share of 175p

Results summary

	31 March	31 March	Change
	2022	2021	%
NAV total return1	27.9%	25.9%
NAV per share	5041p	4000p	26.0
Net assets	£2,783m	£2,225m	25.1
Annual dividend per share	64.8p	62.9p	3.0
Special dividend per share	175.0p	-
1. Alternative performance measure	APM - see page 132 for details.

Performance summary

	1 year	3 years	5 years	10 years
	%	%	%	%
NAV total return1	27.9	47.8	66.2	215.1
Annualised:
NAV total return1	27.9	13.9	10.7	12.2
Total shareholder return	36.5	8.1	8.1	11.9
FTSE All-Share total return	13.0	5.3	4.7	7.2
1. Alternative performance measure	APM - see page 132 for details.

Pools - annualised returns1

	Value	1 year	3 years	5 years
	£m	return % return % return %
Quoted Equity	830	14.1	14.0		11.0
Private Capital	782	54.7	16.1		12.8
Funds	794	38.3	21.9		17.6
Cash and other	377
Net assets	2,783	27.9	13.9		10.7
1. Investment and pool returns are an alternative performance measure	APM
- see page 132 for details.

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