Year ended 31 March 2004
Annual report
2004
Performance
driven Caledonia Investments plc
Annual report 2004
Contents
01 Highlights
02 Chairman’s statement
04 Chief executive’s report
07 Objectives and strategy
08 Investment analysis
12 Investment review
24 Financial review
27 Performance record
28 The board
30 Associate directors
Financial statements
31 Directors’ report
34 Directors’ remuneration report
42 Corporate governance report
46 Directors’ responsibilities statement
47 Independent auditors’ report
48 Company statement of total return
49 Company balance sheet
50 Consolidated profit and loss account 
and total recognised gains and losses
51 Consolidated balance sheet
52 Company and consolidated cash flows
53 Accounting policies
56 Notes to the financial statements
Additional information
75 Notice of annual general meeting
76 Investor information
Caledonia invests in and actively manages 
a focused portfolio of signiﬁcant stakes 
in companies and situations where it
believes there to be good opportunities 
for building value.
Caledonia’s objective is consistently 
to achieve a long term shareholder return 
in excess of the FTSE All-Share T otal 
Return while maintaining a progressive
annual dividend. Caledonia Investments plc
Annual report 2004 01
Highlights
 Substantial outperformance against benchmark of 90% and 44% over five and ten years
 13% outperformance of NAV per share against FTSE All-Share over 12 months
 Company total return for the year of £283m (392p per share)
 4% increase in annual dividend to 27p marks 37th year of progressive annual dividends
 £108m invested and £105m of divestments
 Narrowing of share price discount to NAV from 30% to 20% over the year
Performance
10 year 5 year 3 year 1 year
%%%%
Share price total return 138.5 77.2 39.7 63.2
FTSE All-Share T otal Return 94.3 (12.7) (11.0) 31.0
T otal shareholder return outperformance 44.2 89.9 50.7 32.2
Dividend increase 66.7 22.7 12.5 3.8
Dividend increase excludes special dividends paid in 1997 and 2000 of 30p and 70p per share respectively.
Summary of the year
Change
2004 2003 % 
T otal shareholders’ funds £914.6m £651.2m 40.4
Net asset value per ordinary share 1278p 915p 39.7
Share price 1017.0p 642.5p 58.3
Discount 20.4% 29.8% 31.5
FTSE All-Share index 2197.0 1735.7 26.6
Dividends per ordinary share 27.0p 26.0p 3.8
Results are based on the company balance sheet. Net asset value per ordinary share is stated before accrued dividends.
220
180
140
100
60
99 00 01 02 03 04
Source: FTSE/Datastream
Share price total return
FTSE All-Share Total Return
Total return growth – five years
200
175
150
125
100
94 95 96 97 98 99 00 01 02 03 04
Annual dividend growth – ten years
Annual dividend
Retail Price Index Results
The first year for Caledonia as an authorised investment trust has
been highly successful with significant outperformance recorded
against its chosen benchmark. T otal shareholder returns of 77%
and 138% over five and ten years have outdistanced the FTSE
All-Share T otal Return index by 90% and 44% respectively. This
performance has been achieved by following our long established
strategy of taking significant stakes in businesses of which we
have a good understanding, with particular emphasis on identifying
high calibre management. We also take the longer term view.
We are particularly pleased that this continued outperformance is
being recognised in our share price, which over the financial year
has increased by 58% from 642.5 pence to 1017 pence. This not
only reflects the improved underlying net asset value but, just as
encouragingly, a narrowing of the share price discount from 30%
to 20%. Whilst it is always wise to acknowledge that we cannot
control our own share price, we have made determined efforts to
explain ourselves more widely to the retail investing community,
which we believe has contributed to increased investor interest
and the marked reduction in the discount.
Our good results have enabled us to recommend an increased
final dividend of 18.6 pence per share, resulting in an increase 
in our annual dividend from 26 pence to 27 pence. This is in line
with our stated aim of progressive dividend increases, which has
been unbroken for the past 37 years, and we are well positioned
for this with distributable reserves of £451m, which is unusually
high for an investment trust.
Settlement proposals
In my interim statement I explained the proposals, put to us in
June of last year, which would have resulted in the liquidation 
of the assets of Caledonia and destroyed a company that has
produced outstanding long term performance for its shareholders.
These proposals were nevertheless carefully considered by 
your board with advice from N M Rothschild & Sons and
Cazenove & Co. With the benefit of this advice, the board
unanimously concluded that the proposals were not in the best
interests of shareholders. These proposals had been formulated
by a minority group of shareholders in The Cayzer T rust Company,
a 38% shareholder in Caledonia and wholly owned by members
of the Cayzer family and related trusts. The support of a majority
in Cayzer Trust was needed for the proposals to succeed, but 
in the event they were overwhelmingly rejected and formally
withdrawn on 17 October 2003.
Caledonia Investments plc
Annual report 2004 02
Chairman’s statement
Peter Buckley
Chairman Caledonia Investments plc
Annual report 2004 03
Your board, as represented by all of its independent directors,
was quite clear that it was not in the interests of the shareholders
of Caledonia, nor its business, for this highly public dispute,
which had lasted for several years, to continue and urged the
board of Cayzer Trust to continue to seek a solution. This
subsequently led to Caledonia’s announcement, on 15 March this
year, of a proposed return of funds by way of an elective special
dividend, on up to two-ninths of all shareholdings, of an amount
based on an 18% discount to the company’s net asset value 
per share. This net asset value per share will be after making
provision for the proposed final dividend, which will be paid to 
all shareholders on all their shares, whether or not they elect to
receive the special dividend. All shares on which the special
dividend is elected will be cancelled for nil consideration through
a Court approved reduction of capital. If this proposal is approved,
this net asset value will be struck shortly before the elective
dividend is due to be paid in early July and will result in an
enhanced net asset value per share for continuing shareholders
of between 1.6% and 4.7%, depending on the level of take up of
the elective special dividend. Cayzer Trust will elect to receive its
dividend in full, which will enable it, in conjunction with existing
resources, to pay out its dissident minority group of shareholders
under the terms of an agreed settlement.
A circular setting out full particulars of the elective special dividend
proposals has been sent to shareholders. The circular also 
sets out proposals for Caledonia to renew its authority to make
market purchases of its own shares and for approval of a waiver
of the mandatory offer provisions in the City Code that might
otherwise apply to the Cayzer concert party as a consequence 
of such purchases. These would provide Caledonia with
additional flexibility in the management of its capital base and 
are more fully explained under the heading of ‘Extraordinary
general meeting’ in the directors’ report on page 31. Your board
very much hopes that these proposals will be successfully
concluded and allow management to concentrate fully on the
development of the business.
Economic and political background
It has been my custom to make brief mention of the economic
and political background in which we must exercise our
investment and commercial decisions and, in my view, if the
present Government were a listed business, most analysts would
post a ‘sell’ rating. Public expenditure has soared with few visible
benefits, taxation has risen steeply, but disguised as cleverly as
the spin merchants know how, and both business and the citizen
are becoming increasingly entangled in webs of legislation, 
which seem to encourage both blame and dependency cultures.
What surprises many is that our economy still seems in such
good shape, but when the honeymoon of tax rises to fuel the ever
increasing, but non-productive, government expenditure is over,
as surely must come, we have to earn our place in an increasingly
competitive world economy and not just within the slower
economies of Europe.
It is of considerable concern that the political leaders within
Europe continue to enlarge the European Community, with the
recent accession of ten new member states with less advanced
economies, when it is painfully obvious that the formula for 
a combined Europe is at breaking point so far as many members
of its electorate are concerned. Reality and affordability need 
to come more to the forefront, but it does seem that democracy
may temper the political pipe dreams and, so far as Britain is
concerned, the re-emergence of a credible opposition political
party, with a more balanced view on the European Union, 
is encouraging.
Board
We were pleased to welcome John May, who joined the board as
an executive director on 1 September last year. His experience
over 25 years of advising, managing and investing in both listed
and unlisted companies is well fitted to Caledonia’s business
model and he has already made a significant contribution. This
appointment partly anticipated the retirement of Sir David Kinloch,
who reached the age of 62 in January this year, but who remains
a non-executive director until the conclusion of this year’s AGM.
David, who joined British & Commonwealth shortly before the
separation from Caledonia, was a founder executive director 
of Caledonia when it took on its new life in 1988, and became
deputy chief executive in 1994. His shrewd judgement and overall
contribution during this time has been of great value to shareholders
and I would like to thank him most warmly on your behalf.
I would like to advise shareholders that, since the publication of
the revised Combined Code by the Financial Reporting Council
after the lengthy debate on the Higgs Report, your board has
introduced a Governance Committee, comprising three
independent non-executive directors. This will ensure that any
potential conflict of interest will be identified, and then addressed
only by those directors who are free of any such conflict. We
continue to review the balance and composition of the board in
the light of the revised Combined Code.
Staff
The liquidation proposals already referred to proved an unwelcome
distraction for management, incurring considerable cost, and
diverting the proper focus of creating shareholder value. As you
may imagine, the settlement proposals have been equally time
consuming, but in a much better cause. Adjusting to our new
status as an investment trust, with the increased level of reporting
which we have introduced, has also added to the work load 
and Caledonia is more complicated than the majority of
conventional investment trusts. As ever, our management team
has risen admirably to the challenges and I would like to record
the fullest thanks of the board on behalf of all the shareholders
for their unstinting efforts. We are fortunate to have a high calibre
management team, which is well suited to lead the business
forward.
Outlook
The difficult political and economic background referred to
above, combined with instability in the Middle East, make the
climate for investment judgements, as ever, most challenging.
However, we continue to identify an encouraging number of
opportunities, which we have found over the years do not always
conform with world economic trends. Such opportunities can, 
if carefully chosen, still deliver value against the trend and we
shall endeavour to succeed in this regard.
Peter Buckley
Chairman 04
Caledonia Investments plc
Annual report 2004
Chief executive’s report
Tim Ingram
Chief executive
This is the first year we are reporting our results as an investment
trust, as we believe we have been meeting all the requirements 
for this status as from 1 April 2003. However, as for all investment
trusts, this can only be confirmed by the Inland Revenue at 
a time after the end of each financial year. In the context of our
new status, it is pleasing to note that we have been awarded the
‘Brightest Newcomer’ by the Investment Trusts magazine.
Performance
The year ended 31 March 2004 has seen strong growth in the
value of our investment portfolio. Net assets per share have grown
from 915p at the beginning of the year to 1278p at 31 March 2004 –
a 40% growth. As the FTSE All-Share index has grown by 27%
over the same period, this represents outperformance in net
assets for the year of around 13%. Part of this outperformance
can be attributed to the extent to which our investments have
been in sectors which have grown at rates faster than the market
as a whole, and nearly 8% of our outperformance can be
attributed to us having, in aggregate, invested in companies that
have themselves outperformed within their sectors. Table 1 
shows an attribution summary of our performance over the year.
Table 1 – one year performance attribution
Return
%
Market (FTSE All-Share index) 26.6
Stock selection 7.9
Sector allocation 7.0
Management and other expenses (1.8)
Caledonia’s NAV per share 39.7
Notwithstanding our good one year performance, we continue to
believe that, given our long term approach, our total shareholder
return (‘TSR’) measured over five and ten year periods, gives a
better measure of how we are performing for our shareholders. 
In this respect, as table 2 shows, for our TSR over five years we
have again produced good absolute returns when the market 
as a whole has been negative, while we have also comfortably
outperformed the market over ten years. 
Table 2 – 5 and 10 year relative TSR performance
Caledonia FTSE All-Share 
TSR TSR Outperformance
T o 31 March 2004 % % %
5 years 77.2 (12.7) 89.9
10 years 138.5 94.3 44.2
This again easily puts us in the top quartile for TSR performance
when measured against the Association of Investment Trust
Companies global growth sector. Caledonia Investments plc
Annual report 2004 05
Investment activity
We believe that we have, in particular , two distinctive characteristics
inherent in our investment style that help produce this performance.
The first is the strong deal flow of investment opportunities that
are specifically presented to us as a result of our valuable
reputation as a long term supportive and constructively active
investor. In this respect, during the course of last year, our
investment committee evaluated over 170 potential and serious
new investment opportunities. We shortlist such opportunities
down to a more manageable number that are then intensively
evaluated. Considerable time is spent making sure that such
investment opportunities are suitable for our approach, and
indeed that the entry price offers good value. The most intensive
part of our appraisal is the assessment of the calibre and
capabilities of the management team. Out of all these opportunities
during the year, we invested in just seven new investments for 
a total amount of around £64m. In addition, we invested a further
£44m as follow-on funding in existing investments. Both new 
and follow-on investments are shown in table 3.
The second significant distinctive characteristic in our investment
style is our hands-on constructive involvement with each investee
company, whether they are quoted or unquoted. This, we believe,
provides more value creation than a passive investment style 
and has therefore significantly contributed to our outperformance.
In most of our major investments we have representation on the
board – as evidenced by the fact that we have a Caledonia executive
as a director on the boards of 16 of our top 20 investments.
Throughout the year, we have used these positions to influence
constructively the operations and strategies of each investee
company and in all cases maintain a close contact with the
management of all of our major investee companies.
Table 3 – New and follow-on investments
Total
Amount holding
Investment £m % Category Business
New investments
Eddington Capital 15.8 50.0
1
Unquoted Fund of hedge funds management company, plus investment in fund
Marketform 15.1 26.8 Unquoted Managing agent and insurance company
SVB Holdings 14.0 5.3 Quoted Insurance company
Melrose Resources 6.0 6.7 Quoted Oil and gas company
MORI 5.8 16.0 Unquoted Opinion poll and market research company
Oval 4.5 34.0 Unquoted Commercial lines insurance broker
Tribal Group 2.3 1.6 Quoted Support services company
63.5
Follow-on investments
Polar Capital funds 14.4 24.6
2
Unquoted Investment in various new funds launched by Polar Capital
Easybox 9.0 99.2 Unquoted Self storage business in Spain and Italy
Paladin Resources 4.1 11.1 Quoted Oil and gas company
Savills 3.3 3.8 Quoted Estate agency business
Other 13.5 Includes drawdowns by various private equity funds
44.3
107.8
1. Holding in the management company.
2. Holding in the management company was unchanged.
Although we are long term investors, we are not ‘forever’ investors
and believe that there comes a time when it is appropriate for 
us to divest. During the year, we realised nearly £105m from such
divestments, which are listed in table 4.
Table 4 – Divestments
£m
ICAP 26.4
Meinl European Land 14.1
Offshore Logistics/Bristow
1
12.9
Polar Capital funds 11.9
Ionian fund 9.1
Bateman Chapman 6.0
Compco 3.7
Quintain Estates & Development 2.3
Other 18.3
104.7
1. Redemption of loan note on maturity plus receipt from capital reduction.
Naturally we seek to maximise returns when we realise an
investment. However , care is taken to ensure that we do not damage
our valuable reputation as a long term supportive investor. Caledonia Investments plc
Annual report 2004 06
Chief executive’s report
continued
Liquidity
The chairman’s statement has explained the background to, and
brief details of, the recent proposal to pay an elective special
dividend. More details of this are contained in our shareholder
circular dated 19 May 2004. As the circular explains, based 
on valuations at 30 April 2004, the maximum estimated cash
requirement for this proposal would be £158m. In this context, 
as at the same date, Caledonia had committed term bank
facilities of £200m. This means that, notwithstanding the
potential cash requirements of the proposal, we are well placed
to take advantage of new investment opportunities.
Shareholders
In line with my comments last year, we have been continuing 
to make company presentations to private client fund managers
and brokers in order to broaden the market for our shares. 
As a result, the percentage of our shares held by retail investors
has increased.
Over the long term, our ability to increase the net asset value per
share should provide the main component of shareholder returns.
Nonetheless, we are fully aware of the desire of our shareholders
also to see a narrowing of the discount of our share price
compared with net assets per share. It is therefore pleasing to
note that, whereas this discount was 30% at 31 March 2003, 
by 31 March 2004 the discount had narrowed to 20% and has
further narrowed since then. We plan to continue our efforts to
expand our appeal to retail investors during the current year.
Recent activity
Since the year end, we have invested about £50m. Table 5 lists
our most significant recent investments.
Our most significant divestment has been the sale of our stake 
in Radio Investments, which should realise £14m.
The future
We are continuing to see a strong flow of good business
opportunities where our long term active approach is valued and
can create outperformance. However, as in the past, we will be
highly selective in choosing in which companies to invest and will
be careful not to overpay.
By carefully selecting the right opportunities where there are
strong management teams, by continuing our active involvement
in investee companies and through divesting when appropriate,
we seek to maintain our distinctive performance. 
Tim Ingram 
Chief executive
Table 5 – Significant investments since the year end
Total
Amount holding
Investment £m % Category Business
Cobepa 20.0 10.0 Unquoted Belgium-based investment company
Oval 10.5 34.0 Unquoted Commercial lines insurance broker (follow-on investment)
Incisive Media 8.3 6.8 Quoted Business publishing
Tribal Group 5.0 5.0 Quoted Support services for the UK public sector (follow-on investment) Caledonia Investments plc
Annual report 2004 07
Objectives and strategy
Objectives
Caledonia aims to achieve a long term total shareholder return 
in excess of the FTSE All-Share, while maintaining a progressive
annual dividend, through a focused portfolio of significant stakes
in companies where it believes there to be good opportunities 
for building value.
Caledonia measures its performance over the long term by
comparing its total shareholder return against the FTSE All-Share
T otal Return index over five and ten year periods.
Strategy
Caledonia’s strategy is to invest in and actively manage
significant stakes in 30 to 40 companies and situations where 
it believes there to be good opportunities for building value.
Active management will usually be achieved by working closely
and constructively with the investee management, often through
board representation, as a long term supportive shareholder. 
Risk is managed by holding a diversified portfolio, with at least
50% of the portfolio in quoted securities or liquid assets.
Caledonia self-manages its portfolio, using in-house expertise, 
as well as using third party managers who specialise in particular
asset classes or geographical areas.
Caledonia seeks new investments with a typical size of £10m 
to £25m. Although Caledonia usually aims to have an influential
minority stake it will, on occasion, be prepared to take a controlling
interest where it believes that this will maximise shareholder
value. When considering an investment opportunity, particular
care is taken in appraising the capabilities and commitment of
the management team of the prospective investee company. 
The anticipated total return from the investment, the strategy in
relation to it, and the overall risks, are carefully analysed as part
of the investment process.
Caledonia will invest part of its portfolio in third party managed
funds. Again, a core skill is its ability to assess the capabilities
and commitment of the fund management team and Caledonia
will often seek to obtain a significant stake in the management
company, thereby potentially enhancing returns to shareholders.
Caledonia seeks to work closely and constructively with the
management of companies that it has backed and to make
available the considerable experience of its own team to help the
investee company’s management to address the business issues.
The strategy for each investment, including the returns and the
timing of eventual disposal, is reviewed regularly. Investments 
are realised when it is believed that the funds released can
provide better long term returns, but in a manner consistent with
Caledonia’s reputation as a supportive long term investor.
Whilst the source of funding for new investments generally comes
from its own resources, Caledonia may at times seek to enhance
returns by taking on moderate levels of gearing.
Tight control is exercised over costs, notwithstanding Caledonia’s
active and participative management style. Cost containment is
significantly aided by managing the large majority of investments
through the in-house management team.
Competitive advantages
Caledonia believes that its history and strategy deliver the
following key competitive advantages:
 Favoured access – Caledonia’s long established and
valuable reputation as a supportive long term investor
attracts a strong deal flow of opportunities not always
available to others, which enables it to be highly selective 
in its investments.
 Long experience – Caledonia’s management team has long
experience of proactively working with the management
teams of investee companies to identify and promote
business growth opportunities.
 Self-management – Caledonia’s portfolio is largely self-
managed, thereby reducing third party fees and ensuring
that performance gains accrue to Caledonia’s shareholders.
Where investments are made in managed funds, Caledonia
seeks to secure a stake in the asset management business,
to enhance further potential returns.
 Progressive dividends – Caledonia has a substantial level 
of distributable reserves to support its progressive dividend
policy for the foreseeable future. Caledonia Investments plc
Annual report 2004 08
Investment analysis
Significant holdings
Proportion of
Country of T otal total assets 
Name incorporation Nature of business £m %
Close Brothers
1,2
UK Merchant banking 203.2 21.8
Kerzner International
1,2
Bahamas Resorts owner/operator 143.9 15.4
British Empire Securities
1,2
UK Investment trust 76.6 8.2
Quintain Estates & Development
1
UK Property holding/development 38.3 4.1
Paladin Resources
1
UK Oil and gas exploration 37.4 4.0
Rathbone Brothers
1,2
UK Fund management 34.9 3.7
Aberforth Partnership fund
3
UK Managed fund 32.9 3.5
Polar Capital
2,4
and funds
3
UK Fund manager and funds 28.0 3.0
Offshore Logistics/Bristow
1,2
USA/UK Helicopter services 20.9 2.3
ISIS Asset Management
1,2
UK Fund manager 19.2 2.0
Eddington Capital
2,5
and fund
3
UK Fund manager and funds 17.7 1.9
SVB Holdings
1,2
UK Insurance 15.5 1.7
Marketform
2
UK Insurance 15.1 1.6
Amber Industrial
2
UK Specialty chemicals 12.8 1.4
Edinmore
2
UK Property trading 12.7 1.4
A G Barr
1
UK Soft drinks 12.0 1.3
Radio Investments
2
UK Local radio 11.3 1.2
Wallem
2
Cayman Shipping services 10.7 1.2
Easybox
2
Luxembourg Self storage 10.6 1.1
Savills
1,2
UK Property agency 10.0 1.1
Sterling Industries
2
UK Engineering 10.0 1.1
Melrose Resources
1
UK Oil and gas exploration 9.7 1.0
The Sloane Club
2
UK Residential club owner/operator 9.3 1.0
Buckingham Gate
2
UK Property holding 9.3 1.0
Other investments 87.7 9.4
T otal investments 889.7 95.4
Net liquid assets
6
43.1 4.6
T otal assets 932.8 100.0
Dividend accrual (13.4)
Loan notes (4.8)
Shareholders’ funds 914.6
1. Equity securities listed on the UK or overseas stock exchanges.
2. Board representation.
3. Advisory committee representation.
4. Included £6.1m for the management company and £21.9m of funds.
5. Included £0.7m for the management company and £17.0m of funds.
6. Included £3.3m of net liquid assets held in subsidiary holding companies and £3.9m of own shares.
The table above shows all holdings representing 1% or more of total assets. Caledonia Investments plc
Annual report 2004 09
Investment analysis
Asset distribution
Sector
£m %
 Financial 302.8 32.5
 Leisure and media 176.7 18.9
 Industrial and services 129.3 13.9
 Property 84.8 9.1
 Managed general funds 188.7 20.2
Others 7.40.8
 Net liquid assets 43.1 4.6
932.8 100.0
Category
£m %
 Equities – quoted 640.4 68.7
 Equities – unquoted 87.7 9.4
 Loans and fixed income 59.2 6.3
 Private equity LPs 52.9 5.7
 Hedge and other funds 49.5 5.3
 Others 43.1 4.6
932.8 100.0
Currency
£m %
 Pounds sterling 803.1 86.1
 US dollar 97.2 10.4
 Euro 17.3 1.9
 Other 15.2 1.6
932.8 100.0
Based on the currency of the investment, net of currency hedges.
Geography
£m %
 United Kingdom 706.3 75.7
 Continental Europe 25.8 2.8
 North America 182.0 19.5
 Asia and Far East 17.4 1.9
 Latin America 1.3 0.1
932.8 100.0
Based on country of domicile or underlying spread for funds. Caledonia Investments plc
Annual report 2004 10
Investment analysis
Sector weighting
Sector weighting against the FTSE All-Share
Portfolio
FTSE All-Share
FTSE
Portfolio All-Share
£m%%
 Financial 302.8 34.0 24.1
 Leisure and media 176.7 19.9 11.7
 Industrial and services 129.3 14.6 20.9
 Property 84.8 9.5 4.6
 Managed general funds 188.7 21.2 2.5
 Others 7.4 0.8 36.2
889.7 100.0 100.0
Based on Caledonia’s grouping of the FTSE industry sectors.
Caledonia organises its investments into sectors, based on groupings of the FTSE industry sectors. The FTSE industry sectors are
allocated to the Caledonia sectors. UK listed securities are classified according to their standard listing sector. Other securities are
classified according to the FTSE sector they would probably be included in if they were listed. The Caledonia sectors are as follows: 
Financial
Banks
Insurance
Life assurance
Speciality and other finance
Leisure and media
Beverages
Leisure, entertainment and hotels
Media and photography
Tobacco 
Managed general funds
Investment companies
Industrial and services
Aerospace and defence
Automobiles and parts
Chemicals
Electronic and electrical equipment
Engineering and machinery
Oil and gas
Steel and other metals
Support services
Transport
Property
Construction and building materials
Forestry and paper
Real estate
Other
Electricity
Food and drug retailers
Food producers and processors
Gas distribution
General retailers
Health
Household goods and textiles
Information technology hardware
Mining
Personal care and household products
Pharmaceuticals and biotech
Software and computer services
T elecommunication services
Utilities other
The following chart shows the weighting of Caledonia’s portfolio by sector in relation to the equivalent FTSE industry grouping: Caledonia Investments plc
Annual report 2004 11
Investment analysis
Holdings by sector
Equity Quoted Unquoted Loans and Private equity Hedge and Proportion of
interest equities equities fixed income partnerships other funds T otal total assets
Name % £m £m £m £m £m £m %
Financial
Close Brothers 17.6 203.2–––– 203.2 21.8
Rathbone Brothers 11.3 34.9–––– 34.9 3.7
ISIS Asset Management 6.3 19.2–––– 19.2 2.0
SVB Holdings 5.3 10.0 – 5.5 – – 15.5 1.7
Marketform 26.8 – 7.6 7.5 – – 15.1 1.6
Polar Capital 24.6 – 4.4 1.7 – – 6.1 0.7
Oval 34.0 – 3.0 1.5 – – 4.5 0.5
Eddington Capital 50.0 – 0.1 0.6 – – 0.7 0.1
Other investments – 3.6––– 3.6 0.4
267.3 18.7 16.8 – – 302.8 32.5
Leisure and media
Kerzner International
1
20.2 143.9–––– 143.9 15.4
A G Barr 9.4 12.0–––– 12.0 1.3
Radio Investments 39.5 – 10.6 0.7 – – 11.3 1.2
The Sloane Club 100 – 9.3––– 9.3 1.0
Other investments – 0.2––– 0.2 –
155.9 20.1 0.7 – – 176.7 18.9
Industrial and services
Paladin Resources 11.1 37.4–––– 37.4 4.0
Offshore Logistics/Bristow 5.8 16.3 4.6––– 20.9 2.3
Amber Industrial 100 – 0.9 11.9 – – 12.8 1.4
Wallem 74.4 – 10.7––– 10.7 1.2
Easybox 99.2 – – 10.6 – – 10.6 1.1
Sterling Industries 100 – 9.7 0.3 – – 10.0 1.1
Melrose Resources 6.7 9.7–––– 9.7 1.0
Other investments 6.9 1.4 7.6 1.3 – 17.2 1.8
70.3 27.3 30.4 1.3 – 129.3 13.9
Property
Quintain Estates & Development 7.0 38.3–––– 38.3 4.1
Edinmore 100 – 3.7 9.0 – – 12.7 1.4
Savills 3.8 10.0–––– 10.0 1.1
Buckingham Gate 100 – 8.5 0.8 – – 9.3 1.0
Other investments – 8.1 1.5 – 4.9 14.5 1.5
48.3 20.3 11.3 – 4.9 84.8 9.1
Managed general funds
British Empire Securities 19.7 76.6–––– 76.6 8.2
Aberforth Partnership fund 25.5––– 32.9 – 32.9 3.5
Polar Capital funds –––– 21.9 21.9 2.3
Eddington Capital fund –––– 17.0 17.0 1.8
Other investments 14.6 1.3 – 18.7 5.7 40.3 4.4
91.2 1.3 – 51.6 44.6 188.7 20.2
Non-categorised investments 7.4–––– 7.4 0.8
T otal investments 640.4 87.7 59.2 52.9 49.5 889.7 95.4
Net liquid assets 43.1 4.6
T otal assets 932.8 100.0
Dividend accrual (13.4)
Loan notes (4.8)
Shareholders’ funds 914.6
1. Included £3.7m representing the value of hedges against US$150m of currency exposure. Caledonia Investments plc
Annual report 2004 12
Caledonia has a history of success
with investments in financial
services and our active involvement
in the development of many
financial services businesses has
given us an extensive knowledge
of this sector. Our weighting 
of 34% is greater than the FTSE 
All-Share weighting of 24% and
reflects our belief in the sector’s
long term prospects. Over the
year, the value of our holdings in
financial services companies has
risen by 60%, compared with an
increase of 27% in this sector of
the FTSE All-Share.
Investment review
Financial
Close Brothers
valuation: £203.2m; holding: 17.6%
Close Brothers is the largest independent quoted merchant 
bank in the UK. Caledonia has been a supportive shareholder 
in Close Brothers since 1986, a fact that highlights both our long
term investment approach and our ability to identify sound
management. Caledonia plays an active role at Close Brothers
with a non-executive directorship. The success of this investment
has resulted in it becoming our largest holding by value. Over the
year, the performance of the shares has been strong, rising 64%
and far outstripping the rise in the FTSE All-Share index of 27%.
In addition, Close Brothers paid a dividend of 26p per share for
its financial year to 31 July 2003 out of earnings per share before
goodwill amortisation of 41.0p.
Close Brothers released its interim results for 2004 at the
beginning of March. The results demonstrated the continued
steady organic growth of its lending activities and, following the
end of the long bear market, the improved fortunes and outlook
for its investment banking operations. Overall, group operating
profits before taxation and goodwill amortisation rose by 46% to
£57.8m and earnings per share before amortisation of goodwill
rose by 44% to 27.7p.
Banking profits, which represented around 52% of group
operating profits, rose by 10% compared with the same period 
a year earlier. The loan book grew by 11% and bad debt charges
remained stable. Meanwhile, investment banking profits more
than doubled compared with the first half of 2003. The asset
management division saw funds under management grow to
£5.0bn at the end of January 2004, with net new funds totalling
£300m. Within corporate finance, activity improved in mergers
and acquisitions, and market making profits doubled, reflecting
the strong rise in the equity market and increased private client
confidence. Caledonia Investments plc
Annual report 2004 13
Rathbone Brothers
valuation: £34.9m; holding: 11.3%
This has been a good year for Rathbones, one of the UK’s leading
private client discretionary fund management businesses. Over
our year to 31 March 2004, the share price rose by 68%, making 
it one of our best performing investments. The company
announced an unchanged dividend of 26p per share for its year
ending 31 December 2003. Caledonia originally identified
Rathbones as an investment opportunity, because of its strong
and highly regarded management, and in 1995 we bought a stake
of 8%. We have a representative on the board.
In the year ending 31 December 2003, Rathbones’ funds under
management grew by 28% to £6.8bn. This compared with a rise
in the FTSE 100 index of 13.6% over the same period. During the
year, the company had particular success in attracting mandates
from charities and its excellent investment performance has
continued to attract funds into its unit trust business, where
funds under management at its year end stood at over £500m.
These encouraging trends, together with a focus on managing
costs in the business, led to a 12.4% increase in earnings per
share before goodwill amortisation to 38.1p.
ISIS Asset Management
valuation: £19.2m; holding: 6.3%
ISIS is one of the ten largest UK fund management businesses
and aims to be one of the top five by 2007. Caledonia has been 
a significant investor in ISIS and its forerunners – Ivory & Sime
and Friends, Ivory & Sime – since 1994. A Caledonia director has
been the chairman since 1995. Funds under management have
grown from £3.0bn in 1994 to £63.5bn at the end of December
2003. Like many asset management companies, the shares have
risen strongly since the stock market bottomed in March 2003,
increasing in value by 45% during the year to 31 March 2004. The
company paid an unchanged dividend for its 2003 financial year
of 11p per share.
During 2003, ISIS saw a significant improvement in its financial
performance, with earnings per share before amortisation of
goodwill and exceptional items increasing by over 15% to 12p.
Operating margins increased from 28.2% to 32.7%, reflecting 
in part the company’s focus on cost control as well as the
successful integration of Royal & SunAlliance Investments, 
which it acquired in 2002.
2003 saw a number of initiatives to grow the business. 
A combination of improved investment performance, underpinned
by focused advertising and significant profile building exercises
in the media, has resulted in a number of ISIS retail funds being
added to the recommendation lists of leading independent
financial advisers. ISIS also successfully launched a new listed
investment company, the ISIS Property Trust, which invests
directly in UK commercial properties. More recently, the company
has signed heads of agreement to acquire an equity stake in
Cardinal Capital Partners, which is a new business focused 
on the rapidly growing sector of alternative investments. Caledonia Investments plc
Annual report 2004 14
Investment review
Financial
SVB Holdings
valuation: £15.5m; holding: 5.3%
SVB is a Lloyd’s insurance business, focusing on longer tail
speciality lines, such as financial institutions cover, directors’ 
and officers’ liability and professional indemnity, as well as
shorter tail property insurance, aviation re-insurance and some
marine risks. Its shares are listed on the London Stock Exchange,
but have traded at a discount to net tangible assets since the
events of 11 September 2001. Premium rates turned up sharply
after those losses and SVB has benefited from this.
Before May 2003, Caledonia had no exposure to the insurance
underwriting sector, but believed that there were good
opportunities available. We agreed to act as a cornerstone
investor in SVB’s placing and open offer in May 2003, and
following a further strengthening of its management team last
summer, bought further shares in the market, taking the total 
cost to £9.1m. In November 2003, we subscribed £4.9m towards
its £50m sterling convertible bond issue.
SVB announced its results for 2003 in mid March, which were 
in line with market expectations, in spite of making substantial
further additions to underwriting reserves for 2001 and prior years.
Caledonia has had board representation since January 2004.
Marketform
valuation: £15.1m; holding: 26.8%
Established in the 1980s, Marketform is an unquoted Lloyd’s
insurance business with substantial management ownership. 
It specialises in medical malpractice and other specialist classes
of liability underwriting business for clients outside the USA.
Marketform manages the business of a consortium of medical
malpractice underwriters on a fee and profit commission basis
and participates in the consortium through Syndicate 2468, 
for which it is also the managing agent. Premium rates for
Marketform’ s classes of business hardened after 11 September 2001.
In autumn 2003, Caledonia became a minority shareholder
through an investment of £15m in equity and loan capital
designed to enable Marketform to take additional underwriting
capacity in advantageous market conditions. Caledonia has 
two representatives on the board. Results for 2003 have been 
in line with expectations and the outlook for premium rates
remains attractive.
Polar Capital
valuation: £6.1m (£28.0m including funds); holding: 24.6%
In January 2001, Caledonia co-founded Polar Capital with three
highly respected fund managers. Our ability to help them in
formulating the Polar Capital structure, obtaining FSA approvals
and recruitment of its key personnel, illustrates well our ability 
to play a constructive role in the formation of a business that has
shown impressive growth. Funds under management have grown
substantially over the year and totalled US$2.2bn at the year end.
Polar Capital is a research driven fund management company,
providing a highly entrepreneurial environment for talented
managers within a structure that offers a level of marketing,
administrative and operational support normally only found in
much larger organisations. With 29 investment professionals 
on the staff, Polar Capital manages US$0.7bn in hedge funds 
and the balance in long-only funds. Polar Capital’s funds under
management can be broken down as follows: US$1.0bn in
technology funds, US$0.8bn in the Japanese portfolio and
US$0.4bn in various European and UK products.
Caledonia owns 24.6% of the company, with the staff owning the
balance, and is represented on the board of the management
company and the boards of its funds. As a result of the success
and profitability of the business, the value of our investment
increased from £3.6m to £6.1m during the year. The cost of our
investment in Polar Capital was £2.4m. Caledonia Investments plc
Annual report 2004 15
Oval
valuation: £4.5m; holding: 34.0%
UK commercial insurance broking is a fragmented industry with
many participants. Oval is a company formed to bring together
the best of these, buying regional broking businesses for a
mixture of cash and its own shares, whilst retaining the value 
of local relationships. A growing market share should enable the
group to benefit from economies of scale and better terms of
trade from insurers.
RP Hodson, a substantial commercial broking and financial
services business based in Wakefield, was Oval’s first
acquisition, completed in October 2003. Oval’s second
acquisition, signed in April 2004, is Bland Bankart, a leading
commercial broker with offices in Leicester, Nottingham,
Birmingham, Luton and London.
Caledonia has participated in Oval by subscribing a total of £15m
for ordinary shares and convertible loan stock, 30% of which was
called up at 31 March 2004. Caledonia has two representatives
on the Oval board.
Eddington Capital
valuation: £0.7m (£17.7m including funds); holding: 50.0%
Eddington Capital was established in 2003 and is another
example of Caledonia co-founding a business in the fund
management arena. As a specialist in high return fund of hedge
funds, Eddington Capital launched its flagship Triple Alpha Fund
on 1 September 2003, which Caledonia seeded with £15m. So
far, the performance of the Triple Alpha Fund has been promising,
increasing by 13.5%, net of all fees, in the first seven months.
Eddington Capital, based in London, is a joint venture between
its management and Caledonia. Caledonia is represented on 
its board. Caledonia Investments plc
Annual report 2004 16
Investment review
Leisure and media
Caledonia has experience of the
leisure and media sector through
its involvement in the hospitality,
print and broadcasting industries.
Our confidence in the long term
prospects of this sector has led 
to a weighting greater than the
FTSE All-Share index, at 20%
compared with 12%. Over the
year, our holdings have increased
in value by 49%, compared with
an increase in the leisure and
media companies in the FTSE 
All-Share index of 40%.
Kerzner International
valuation: £143.9m; holding: 20.2%
Kerzner International (‘KI’) is a leading developer, owner and
operator of luxury resort hotels worldwide. Caledonia backed the
management team when Sun International Hotels (now KI) was
founded in 1994. Over the year, the shares have risen by 95% 
in dollar terms and, during the year, we have offset some of the
negative impact of a weaker dollar by partially hedging our
exposure. Caledonia has had board representation since the outset.
KI recently reported a strong set of results for the year ended 
31 December 2003. Adjusted earnings per share were US$2.36,
an increase of 15% over the previous year, due primarily to
Paradise Island, Mohegan Sun and a lower interest expense. 
At Paradise Island in the Bahamas, the company’s flagship
operation, KI achieved record gross revenue and EBITDA for the
second consecutive year.
KI owns 50% of Trading Cove Associates, which receives a 5%
participation in the gross revenues of the recently expanded
Mohegan Sun Casino complex in Connecticut, USA, owned by
the Mohegan Tribe. Gross revenues grew strongly in 2003, rising
by 14%. KI’s share of the fees was US$35.7m.
In February 2004, KI announced the official opening of the
One&Only Palmilla, which is its latest addition to the One&Only
brand. The company has transformed one of the best-known
properties in the Los Cabos region of Mexico into an unparalleled
six-star destination.
In addition to good trading results with continued growth shown
by the first quarter’s figures, KI has a number of important
developments in the pipeline. A further US$800m expansion is
planned for Paradise Island and in Dubai, where the One&Only
Royal Mirage management contract continues to perform well, 
a new Atlantis, The Palm, Jumeirah, is planned in conjunction
with a local partner. This new Atlantis would comprise a 1,000
room hotel together with an extensive water theme park.
In the UK, KI was recently granted a gaming licence to enable 
it to move forward with its first casino, in Northampton. It also
holds a 37.5% interest in the BLB consortium which has bid for
Wembley plc. Caledonia Investments plc
Annual report 2004 17
A G Barr
valuation: £12.0m; holding: 9.4%
A G Barr is a Scottish-based manufacturer, marketer and
distributor of soft drinks, which includes well known brands such
as Irn-Bru, Tizer and Orangina. Profits for its year to 31 January
2004 improved by a satisfactory 13% to £13.8m, due to the good
summer and tighter cost control. Earnings per share rose by
14.0% to 49.9p and the dividend increased by 10.4% to 25.5p.
Cash increased substantially to £25m during the year, reflecting
not only excellent trading, but lower investment than usual,
although the company anticipates increasing capital expenditure
to provide efficiencies for the future. The share price rose 34%
over our year to 31 March.
Caledonia has a long association with the management, where 
a number of changes have recently taken place. Robin Barr,
chairman and chief executive for 26 years, has divided these
roles, remaining chairman and appointing a new chief executive.
Radio Investments
valuation: £11.3m; holding: 39.5%
Caledonia has been a cornerstone investor in Radio Investments
since 1989 and throughout this period has had board
representation. Caledonia currently provides Radio Investments’
non-executive chairman. Investing in Radio Investments
provided Caledonia with an indirect interest in Capital Radio, 
the UK’s largest commercial radio operation. In 1998, Radio
Investments placed its stake in Capital Radio, realising a profit 
on cost of over £40m, part of which was distributed to
shareholders. Radio Investments currently has interests in 
22 smaller radio stations and has become a market leader in the
independent local radio sector. Recent trading has been healthy
with Radio Investments returning to profitability in the 18 month
period to March 2004. This was driven by a combination of 
cost containment and good revenue growth in an improving
advertising environment. In the near term, Radio Investments
should benefit from further increases in advertising spending 
and it is well positioned to take part in any consolidation in the
radio sector.
Since the year end, the sale of Radio Investments has been
announced, by means of an accelerated IPO. Following
completion, Caledonia expects to receive about £13.6m, net 
of costs, for its shareholding in the company.
The Sloane Club
valuation: £9.3m; holding: 100%
The Sloane Club is a residential members club, based in the heart
of Chelsea. Caledonia bought the Club in 1993 on a long lease,
both as a property investment and because of its trading
potential. It has been enlarged and modernised and currently 
has a membership of around 3,750. In January of this year, 
a £1m programme to upgrade the rooms and install air
conditioning was commenced, with completion planned for the
summer season. Caledonia provides the chairman of The Sloane
Club and is actively involved in its management.
T owards the end of the year, the financing structure of The Sloane
Club was changed, with the Club taking on bank borrowing of
£14.0m and returning funds to Caledonia, thereby reducing our
equity value by this amount. In addition, there was a small
reduction in valuation reflecting the downturn in activity.
Whilst membership has remained stable, profitability has been
adversely affected by a slowdown in the number of overseas
visitors. In common with many clubs, The Sloane Club has
reciprocal arrangements with overseas clubs, however, their
members are being deterred from visiting London by a
combination of the strength of sterling and the perceived risk 
of terrorist activity. Caledonia Investments plc
Annual report 2004 18
Investment review
Industrial and services
Caledonia’s experience in the
industrial and services sector
dates back many decades, giving
us the expertise to work closely
with management teams. Despite
this, good opportunities in this
sector have been difficult to find
and, as a result, only 15% of our
investments are in this sector,
compared with 21% for the FTSE
All-Share index. However, we 
have made follow-on investments
in activities where we see value
opportunities. Over the year, 
our holdings have increased in
value by 12%, compared with an
increase in the industrial and
services companies in the FTSE
All-Share index of 22%.
Paladin Resources
valuation: £37.4m; holding: 11.1%
Paladin is an independent oil and gas producer with assets 
in the UK, Norwegian and Danish sectors of the North Sea,
Indonesia and Tunisia. Caledonia developed an association with
the management of Paladin in the early 1990s when they
successfully developed, and eventually sold, Clyde Petroleum.
The management have set demanding targets for both production
and reserves and have strategically positioned the company as
the natural partner for oil majors wanting to dispose of assets. 
A targeted exploration programme supplements this strategy.
Paladin completed another highly successful year with pre-tax
profit rising from £66.0m to £84.8m. This translated into a 15%
rise in earnings per share to 8.92p. Caledonia took the opportunity
to increase its shareholding to 11.1%, by participating in Paladin’s
placing and open offer in January 2004, the proceeds of which
contributed towards the US$153m purchase of a package of
North Sea interests from BP and Amerada Hess.
Paladin’s share price has risen by 46% during our year to 
31 March 2004 and the company recently increased its full year
dividend by 5% to 1.575p per share for its financial year ended 
31 December 2003.
Offshore Logistics/Bristow
valuation: £20.9m; holding: 5.8%
Offshore Logistics/Bristow is the world’s largest provider of
helicopter transportation services to the oil and gas industry.
Caledonia has been connected with this industry for many years,
initially through Bristow Helicopters, which, since 1996, has been
associated with Offshore Logistics, the NYSE listed helicopter
operator. During the year to 31 March 2004, the company’s
shares rose by 28%. Caledonia has board representation.
In February this year, Offshore Logistics reported diluted earnings
per share of US$0.86 for the three quarters to 31 December 2003,
compared with US$1.39 for the comparative period, after
charging US$0.28 per share of reorganisation and recapitalisation
costs and after US dollar weakness on non-dollar denominated
revenues. In an extremely competitive industry, with powerful 
and demanding customers, the company is taking further steps
to maintain its pre-eminent position through new fleet introductions,
customer and safety orientated initiatives and a drive for
increased efficiencies.
During the year, loan stock of £6.5m was repaid and we received
a further £6.4m following a capital reorganisation of Bristow.
These repayments reduced the net carrying value of our investment.
Amber Industrial
valuation: £12.8m; holding: 100%
Amber is a specialty chemicals business, traditionally focusing
on silicone compounding, aerosol products and specialist
industrial consumables. However, Amber is currently in
discussions to sell its aerosol division and this sale should be
concluded by the early part of the summer. There has also been
further expansion within the silicone division, with the acquisition
of Engineered Polymers Inc, and the building of a new facility 
in Richmond, Virginia.
Trading profits were down by 40%, however this included some
significant one-off costs related to stock write-offs, the expansion
of the silicones division and the potential sale of the aerosol
division. As a result, Amber’s valuation has been reduced to £12.8m. Caledonia Investments plc
Annual report 2004 19
Wallem
valuation: £10.7m; holding: 74.4%
Wallem is a leading diversified shipping services business based
in Hong Kong. Its activities encompass ship and cargo broking,
ship management and ship agency services. Caledonia’s
investment in Wallem was made in 1992, following a long
association with the Wallem management. The valuation of this
investment has risen by over £3m during the year, reflecting its
strong operating performance in buoyant markets.
Wallem is geographically well positioned to take advantage of 
the rapid growth in Chinese trade. The company produced good
results in its last financial year ended 30 September 2003 and
against a background of a very active shipping sector, it is
producing strong results in its current financial year. The
continued global economic recovery, coupled with Wallem’s 
long standing presence in Asia, augurs well for the company.
Easybox
valuation: £10.6m; holding: 99.2%
Easybox is a self storage business currently operating in Italy 
and Spain, which was established by Caledonia in 2000 with a
49.6% joint venture partner . The management team had previously
successfully developed Abacus Self Storage, a Caledonia
subsidiary which was sold in 1998 for a substantial profit. During
the year, Caledonia bought out the joint venture partner.
Whilst individual sites are trading well, Easybox itself has yet 
to reach critical mass and is seeking further sites, which is
continuing to prove difficult. During the year, it added one site in
Milan, taking the total number of facilities to six, and is currently
appraising a further site in Rome.
Sterling Industries
valuation: £10.0m; holding: 100%
Sterling Industries is the holding company for three core
businesses. Sterling Hydraulics is a manufacturer of hydraulic
valves primarily used in construction and off-road machinery.
Process Combustion Corporation is a specialist thermal
engineering company providing thermal solutions for pollution
control and Bloom Burners is a manufacturer of burners for the
iron, steel and aluminium industries.
Trading has been stronger at Sterling Hydraulics with the
beginnings of a recovery in demand. Process Combustion has
also had a successful year, incorporating two small but strategic
acquisitions and winning further projects for the current year.
Bloom has had a difficult year with the steel industry starting off
in a very depressed state, but now with strong steel prices, mills
are working flat out, which bodes well for the current year. The
investment in a new facility in China is on course and Bloom
China recently won its first local order.
Melrose Resources
valuation: £9.7m; holding: 6.7%
During the year, we have built up a shareholding in this oil and
gas exploration and production company. Melrose operates
principally in Bulgaria and Egypt, but also owns stakes in US 
oil fields.
Over the past 12 months, Melrose announced significant
exploration successes in Egypt, which have been rapidly brought
on stream. An aggressive drilling programme is in place for 2004
to take advantage of these successes and expand the Egyptian
operations. In Bulgaria, where the company has interests in 
three 100% owned concessions, work has recently finished 
on a pipeline and onshore process plant, with first production
expected in April 2004. Further exploration will be undertaken in
Bulgaria throughout the year. In the US, Melrose is concentrating
on developing its working interests, with an eye to a step change
in production over the next two to three years.
For 2003, Melrose announced a small profit on turnover of £7m
and earnings per share of 6.3p, compared with a loss of 13.6p 
in 2002. Production during the year increased 127% to 2,600
barrels of oil equivalent per day at year end and there was a 46%
increase in reserves to 42m barrels of oil equivalent. Caledonia Investments plc
Annual report 2004 20
Investment review
Property
Caledonia’s history of property
investment has gained us valuable
knowledge of this sector. We
invest in both property assets and
in property management teams.
Our weighting in property
companies is 9%, compared with
5% in the FTSE All-Share index,
which represents quoted property
companies only and not
properties held through
unquoted vehicles. Over the year,
our holdings have increased in
value by 40%, compared with an
increase in the property
companies in the FTSE All-Share
index of 56%.
Quintain Estates & Development
valuation: £38.3m; holding: 7.0%
Quintain is a property investment and development company
with a proven track record. It specialises in commercial
properties with challenging financial characteristics. The shares
have performed strongly during the year, rising by 87% and
outperforming both the FTSE All-Share index and the FTSE
property sector index. 
T wo of Quintain’s special projects are at the Greenwich Peninsula
and Wembley, which, combined, make one of the largest urban
regeneration programmes in the UK. At Wembley, Quintain owns
55 acres surrounding, but not including, the new National Stadium
and at the Greenwich Peninsula it owns 18.5 acres of land as well
as a 49% stake in Meridian Delta, which has rights to develop 
the 190 acre site.
Edinmore
valuation: £12.7m; holding: 100%
Edinmore is a wholly owned property trading company with a
profit sharing arrangement with the management. Edinmore has
established an excellent reputation, which brings opportunities
not always available to others. Caledonia provides loan funding
and is actively involved in investment decisions.
During the year, Edinmore bought £19m of new properties and
resold £18m which, net of costs and management fees,
generated a pre-tax return to Caledonia of £1.6m. The bulk of the
remaining trading stock is expected to be sold in the second half
of the current year. Caledonia Investments plc
Annual report 2004 21
Savills
valuation: £10.0m; holding: 3.8%
Savills is a property agency and advisory company. Recognising
the strength and calibre of the management team, and the
potential for value creation, Caledonia built up its stake mainly in
early 2003. During our financial year, the shares performed very
strongly, rising by 213%.
Savills’ results for its financial year to 31 December 2003 showed
a strong growth in the business, with operating profits of £36.5m
up 25% on the previous year.
One of Caledonia’s directors is a non-executive director of Savills.
Buckingham Gate
valuation: £9.3m; holding: 100%
Caledonia acquired 30 Buckingham Gate in 2001 for its
headquarters as the scale of our activities had outgrown the
former City office. The property is a seven floor office building
and is in a prime West End location. Caledonia occupies four
floors, with the remaining space let out. As well as being our 
head office, this allows us to let space, and thereby provide easy
access, to some of our investee companies.
During the year, external loan finance of £6.5m was put in place
for this investment, to repay a loan from Caledonia, thereby
reducing the valuation of our investment. In addition, an external
valuation of the building caused a further small reduction in value. Caledonia Investments plc
Annual report 2004 22
Investment review
Managed general funds
Caledonia has particular expertise
in identifying, supporting and
encouraging asset management
teams, which we often back 
with an investment in the
management company as well 
as in the managed fund. Our
weighting of 21% in managed
general funds is greater than the
2% of investment companies that
make up the FTSE All-Share index,
as a substantial proportion of our
interests in managed funds are
structured as limited partnerships
or offshore investment funds.
Over the year, our holdings have
increased in value by 53%,
compared with an increase in 
the managed general funds
companies in the FTSE All-Share
index of 40%.
British Empire Securities 
valuation: £76.6m; holding: 19.7%
British Empire Securities is a UK investment trust whose
objective is to achieve capital growth through a focused portfolio
of investments, particularly in companies whose share prices
stand at a discount to estimated underlying asset value.
Caledonia has actively backed British Empire Securities and its
management since 1991, when we took a significant stake in the
company. Since that date we have had board representation.
British Empire Securities is the best performing investment trust
over five years, in terms of share price total return, in the AITC
global growth sector. The trust trades on a very low discount to
its net asset value, which at the end of March 2004 was 4.8%
compared with 15.2% for the global growth sector as a whole. 
The net asset value of British Empire Securities rose by 50.8%
and its total shareholder return was 61.3% for the year ended 
31 March 2004. This compared with a total shareholder return 
of 31.0% for the FTSE All-Share index.
The company recently announced that it had won two industry
awards. It achieved first place in Investment Week’s Investment
Trust of the Year Awards – Global including US category and it
also achieved first place in the Global category of the Moneywise
investment trust awards 2004.
Aberforth Partnership fund
valuation: £32.9m; holding: 25.5%
This limited partnership has a remit to acquire significant
shareholdings in smaller UK listed companies and to work with
boards and managements to release latent value. At launch in
March 2001, Caledonia committed £25m to this £163m geared
fund and the full commitment was drawn down by 31 March
2003. The net cost of our original investment was reduced to
£19m by March 2004 as a result of realisations by the partnership
and distributions to the limited partners.
As at 31 March 2004, the fund had investments in twelve
companies and, based on realised and unrealised gains, had
generated an IRR of some 26% since launch, significantly
outperforming the FTSE All-Share index. Caledonia is represented
on the advisory committee. Caledonia Investments plc
Annual report 2004 23
Polar Capital funds
valuation: £21.9m (£28.0m including holding in manager)
Caledonia has an investment in both Polar Capital and a number
of its investment funds. Our investment in the management
company is described on page 14 and our investments in the
Polar Capital funds are described below.
The majority of our Polar Capital fund investments are in hedge
funds, which aim to generate a positive return substantially
above the market risk free rate, irrespective of market conditions.
These funds have performed well, returning between 12% 
and 24% over the year. During the year, and in anticipation of 
a weakening dollar, we have moved out of US dollar and into
sterling denominated funds. We also invested an additional
£2.7m in the new European hedge fund.
We also hold a £5.9m investment in the long-only Global
T echnology Fund, which increased in value by 106% over the
year, substantially outperforming the NASDAQ 100.
Eddington Capital fund
valuation: £17.0m (£17.7m including holding in manager)
Caledonia has an investment in both Eddington Capital and in its
Triple Alpha Fund. Our investment in the management company
is described on page 15 and our £15.0m investment in the Triple
Alpha Fund is described below.
The Eddington Capital Triple Alpha Fund uses a multi-strategy
fund of hedge funds approach and seeks to return 20% per
annum net to investors. Fund selection is both qualitative and
quantitative and aims to combine exceptional fund managers
with intelligent portfolio construction.
The performance of the Triple Alpha Fund has been promising,
increasing net asset value by 13.5%, net of all fees, in the first
seven months. Caledonia Investments plc
Annual report 2004 24
Jonathan Cartwright
Finance director
Financial review
As at 1 April 2003, Caledonia had completed the substantial
restructuring needed to enable the company to be managed in
accordance with the requirements for authorised investment 
trust status. However, as with all investment trusts, compliance
can only be confirmed by the Inland Revenue after the end of
each financial year. In order to provide financial information that
is comparable with other investment trusts, presentation and
accounting policy changes have been made. Some of these
changes took effect in the last annual report, and some appear
this year for the first time.
For the reasons discussed below, we believe that the company
statement of total return and company balance sheet are the
most relevant statements for reporting our performance as an
investment trust company. Therefore, this review discusses the
financial results of the company as well as summarising the
performance of the group.
Presentation of the financial statements
Caledonia is an investment trust company, but we are relatively
unusual among our peers because we hold trading subsidiaries
as part of our investment portfolio. Our ownership of subsidiaries
requires us to prepare consolidated financial statements, but the
accounting rules prevent us from including subsidiaries in those
statements at valuation. The consolidated balance sheet would
not, therefore, give a presentation of our investment portfolio
consistent with other investment trusts. However, the company
balance sheet does allow us to show the entire portfolio
(including subsidiaries) at valuation and is, therefore, considered
to be the most relevant statement in presenting our financial
position. Actual proceeds from the disposal of any individual
investment will inevitably depend on market and economic
conditions prevailing at the time.
The company statement of total return is presented as part of the
audited financial statements for the first time. Comparatives for
the year to 31 March 2003 have been presented, but on a pro
forma basis only, as Caledonia was not an investment trust
company during 2003. The comparatives show the position had
Caledonia been an investment trust company during that period,
but exclude the effect of the restructuring.
A further change in presentation has been made this year. In
previous years, Caledonia, as a trading and investment company,
took the view that entities over which it exercised significant
influence were associated undertakings and were accounted for
using the equity method. On its conversion to an investment trust
company on 1 April 2003, we reviewed this treatment. Only those
entities through which the company carries out its own business
and over which the company exercises significant influence are
regarded as associated undertakings. Caledonia now views 
all other entities that were previously classed as associated
undertakings as part of the investment portfolio. As required by
FRS 9, these investments are not accounted for by the equity
method, but held at valuation. Caledonia Investments plc
Annual report 2004 25
Company total return
Company total return for the year was £282.8m, or 391.5p per
share, compared with a pro forma loss of £183.2m, or –254.0p
per share, last year.
Realised capital profits of £20.1m included profits of £21.0m 
and £8.2m on the sale of ICAP and of Meinl European Land
respectively. This was offset by losses of £5.1m and £3.5m on 
the sale of London Forfaiting and the Ionian fund investments, 
as the portfolio was rationalised following the strategic review
that took place in 2002. Unrealised capital gains of £254.2m
reflected substantial rises in the value of investments. Of
particular note, the valuation of Close Brothers rose by £79.4m
and Kerzner International by £60.5m, the latter after taking
account of US$150m of forward currency contracts. These 
were taken out to enable us to the hedge part of our US dollar
investment in Kerzner International against the expected
weakening of the US dollar.
Income from investments of £21.5m rose marginally from last
year’s figure of £20.0m. This reflected maintained or increased
dividends from our principal investments.
Management costs rose to £9.1m from £8.3m last year. This
movement included increased bonuses, reflecting the company’s
substantial outperformance.
Other corporate costs of £2.5m comprised the costs incurred 
in relation to the liquidation proposals promoted by a minority 
of shareholders in The Cayzer Trust Company, which were
subsequently withdrawn, and also the costs of a proposed
elective special dividend, details of which are contained in 
a circular sent to shareholders. These matters are referred to in
the chairman’s statement and under the heading of ‘Settlement
proposals’ below.
Interest payable of £1.0m compared with £0.2m last year,
principally due to interest on a loan from a subsidiary undertaking.
The total taxation charge (revenue and capital) for the year
amounted to £0.4m, compared with a £14.0m credit last year.
Last year’s credit included the release of the provision against
unrecognised losses amounting to £17.9m and a £5.5m charge
associated with the restructuring.
Group profit and loss and other gains and losses
Overall, profit before tax for the year to 31 March 2004 totalled
£6.1m, compared with £23.6m reported last year. The main
component of this difference is the reclassification of associated
undertakings to portfolio investments and the consequent
replacement of the equity accounted share of income from
associates with dividend and interest income.
The group operating loss for the year was £11.5m, compared
with £9.4m last year. The main factors were a reduced profit at
Amber of £0.4m, compared with £1.9m last year, and a £1.3m
loss from Easybox, which included business development costs
and which became a subsidiary during the year. Against these
losses was the saving of last year’s restructuring costs of £4.0m,
offset by costs of the liquidation and settlement proposals,
referred to above, of £2.5m.
There was no profit on the sale of operations, compared 
with £4.9m last year – principally on the dilution of interests 
in associates.
Income from investments of £17.3m were double last year’s
figure of £8.7m, as dividend and interest income from former
associates, amounting to £8.6m this year, is now included under
this heading. Interest receivable is £1.1m, substantially down 
on last year’s number as the group was more fully invested in the
2004 financial year than in 2003. Interest payable of £0.8m was
substantially down on last year’s figure of £9.5m, but last year’s
figure included £9.3m of interest payable by former associates. 
Group realised and unrealised gains and losses mirror those of
the company except for small differences where the company
figures include realised and unrealised gains and losses 
on subsidiaries.
The total taxation charge (revenue and capital) for the year
amounted to £2.6m, compared with a £2.8m credit last year. 
Last year’s tax credit included the release of a provision against
unrecognised losses of £17.9m, a £5.5m charge associated with
the restructuring, share of associates tax of £4.5m and tax on
investment sales of £3.9m, which were not a feature of the 2004
tax charge.
Dividend
An interim dividend of 8.4p per share has been paid and the
directors have recommended a final dividend of 18.6p per share,
making a total of 27.0p per share for the year at a cost of £19.4m.
This is a 3.8% increase over the total dividend for 2003 of 26.0p
per share. The final dividend will be payable to all shareholders
on all of their shares, whether or not they elect to receive the
special dividend referred to below.
Cash flow and balance sheet
The difference between company and group net funds reflects
the net funds held by trading subsidiaries and intra-group
transactions.
The company’s net funds at the year end were £34.0m compared
with £26.9m at the start of the year, an increase of £7.1m.
Significant outflows were incurred in respect of investment
purchases totalling £107.3m and dividend payments of £19.1m.
Investment purchases included £15.8m in Eddington Capital and
its Triple Alpha hedge fund, £15.1m in Marketform and £14.0m 
in SVB Holdings. Significant inflows arose from investment sales
of £105.3m, including £26.4m from ICAP , £14.1m from Meinl
European Land and £12.9m from Offshore Logistics/Bristow, 
and capital distributions of £20.5m.
The group’s net funds at the year end were £8.2m compared 
with £43.2m at the start of the year, a decrease of £35.0m. Most
of the cash flows were similar to those of the company. However,
the principal difference is due to new bank financing of £14.0m
for The Sloane Club and £6.5m for Buckingham Gate and the
addition of £10.4m of bank loans with the acquisition of Easybox. Caledonia Investments plc
Annual report 2004 26
Financial review
continued
Settlement proposals
On 15 March 2004, the company announced outline proposals
for a return of funds to ordinary shareholders. On 19 May 2004, 
a circular was sent to all shareholders detailing the proposals.
Subject to a number of conditions being met, all Caledonia
ordinary shareholders will be offered the opportunity to receive 
a special dividend on terms that they give up part of their
shareholdings. The special dividend will be set at a fixed discount
of 18% to Caledonia’s net asset value calculated on the date 
and according to the methodology set out in the circular. Those
who elect to receive the special dividend, which may be on 
a maximum of up to two out of every nine ordinary shares, will
have those shares on which they have elected to receive the
special dividend cancelled for nil consideration. Further details
are given in note 34 to the financial statements, on page 74.
Treasury management
The function of group treasury is to manage the group’s overall
cash position and the risk arising from the uncertainty of financial
exposures, and to provide treasury services to group companies.
The group’s treasury operations and risk management are
governed by formal treasury policies, approved by the board. 
The activities of group treasury are routinely reported to the board.
Credit risk
The group’s objective is to limit the risk of loss arising from
default by counterparties. This is achieved by limiting exposure
to single entities and by spreading risk across a number of
counterparties. Group treasury may only create exposures with
counterparties meeting predetermined standards, within financial
limits. These standards are arrived at by reference to the major
credit rating agencies, and the board formally approves both the
standards and financial limits.
Interest rate risk
Interest rate risk arises on the fluctuations in value of financial
instruments because of changes in market interest rates. In
respect of treasury assets and liabilities, group treasury manages
the exposure to changes in interest rates, principally by using 
a balance of term deposits, certificates of deposit and other
instruments, together with fixed term borrowings to agreed levels
of gearing, all of varying maturity. Interest rate derivatives are only
used to hedge specific liabilities, such as loans to finance
property investments or where specifically required in agreed
borrowing arrangements. These are considered on a case by
case basis and can only be undertaken with the approval of the
executive management committee.
Liquidity risk
The group’s objective is to ensure that funding is available 
to meet its requirements, whilst minimising borrowing costs 
and securing an advantageous return on liquid funds. This is
facilitated by the central co-ordination of treasury transactions
through the group’s bankers and an internal set-off arrangement
of individual company overdrafts with other group liquidity. 
The management of liquid funds is undertaken within internal
guidelines stipulated for the maintenance of the company’s
investment trust status. It includes the placing of short term
deposits and the purchase of certificates of deposit and other
instruments.
At the year end, the group held net cash and short term deposits
of £54.8m (2003 – £48.5m) and had committed undrawn facilities
of £214.7m (2003 – £50.0m), together with undrawn overdraft
facilities of £12.7m (2003 – £12.0m). Short term borrowings
totalled £4.3m (2003 – £0.4m).
Of the £215.6m of committed undrawn facilities at the year end,
£150.0m was arranged during the year in anticipation of the
settlement proposals, to ensure that Caledonia is well positioned
to meet its obligations under the proposals, if agreed by
shareholders.
Foreign currency risk
The group’s exposure to foreign currency risk arises primarily
from holding investments and treasury assets and liabilities
denominated in foreign currencies. Although the group is based
in the UK, it is a significant and long term investor in US dollar
assets and has investments in Europe, the Far East and other
parts of the world. There is also exposure through UK
investments that invest abroad. The group’s net assets will reflect
the impact of currency movements on individual investments,
unless specifically hedged.
The executive management committee has overall responsibility
for the management of the group’s foreign exchange risk. Actual
currency exposures, measured as percentages of net asset value
on a regular basis, must not exceed limits formally approved 
by the board. 
Group treasury is responsible for managing the foreign exchange
risk arising on treasury assets and liabilities. Where possible, 
it arranges to net exposures within the group and to minimise 
the net external exposure. Group treasury does not undertake
speculative transactions. It does not enter into forward contracts
or purchase or sell derivatives without there being an asset or
liability to hedge and without the prior approval of the executive
management committee.
The group also has a small amount of transactional currency
exposure. Such exposure arises from sales or purchases by 
an operating unit in currencies other than the unit’s functional
currency. Where these are material, it is the group’s policy to
hedge using forward currency contracts.
Jonathan Cartwright
Finance director Caledonia Investments plc
Annual report 2004 27
The following table shows Caledonia’s cumulative total return and annual dividends over the last ten years:
Cumulative performance based on 1994
Share Annual Special
price dividend dividend Share price FTSE All-Share Annual Retail
Years ended 31 March p/share p/share p/share total return T otal Return dividend Price Index
1994 663.0 16.2 – 100 100 100 100
1995 640.0 17.0 – 100 103 105 104
1996 750.0 18.0 – 121 129 111 106
1997 770.0 19.0 30.0 127 153 117 109
1998 879.0 20.5 – 158 209 127 113
1999 732.5 22.0 – 135 223 136 115
2000 771.5 23.0 70.0 146 245 142 118
2001 797.5 24.0 – 171 218 148 121
2002 847.5 25.0 – 187 211 154 123
2003 642.5 26.0 – 146 118 161 126
2004 1017.0 27.0 – 238 194 167 130
Compound annual returns
5 year 12.1 (2.7) 4.2 2.4
10 year 9.1 6.9 5.2 2.6
The following table shows Caledonia’s share price, net asset value and discount for each month of the year ended 31 March 2004:
Cumulative performance based on 
Net asset Share Discount March 2003
value price FTSE share price Net asset Share FTSE
Month p/share p/share All-Share to NAV % value price All-Share
Mar 2003 915 642.5 1735.72 29.8 100 100 100
Apr 2003 942 731.5 1891.50 22.3 103 114 109
May 2003 1052 811.5 1968.83 22.9 115 126 113
Jun 2003 1084 841.0 1971.26 22.4 118 131 114
Jul 2003 1115 890.0 2045.82 20.2 122 139 118
Aug 2003 1154 922.0 2064.74 20.1 126 144 119
Sep 2003 1161 912.5 2027.72 21.4 127 142 117
Oct 2003 1192 921.5 2125.37 22.7 130 143 122
Nov 2003 1186 964.0 2146.72 18.7 130 150 124
Dec 2003 1200 948.0 2207.38 21.0 131 148 127
Jan 2004 1243 998.0 2187.10 19.7 136 155 126
Feb 2004 1272 1066.0 2243.41 16.2 139 166 129
Mar 2004 1278 1017.0 2196.97 20.4 140 158 127
Performance record Caledonia Investments plc
Annual report 2004 28
The board
Mark Davies Michael Wyatt Peter Buckley Tim Ingram Sir David Kinloch
Peter Buckley – chairman
A member of the Institute of Chartered Accountants of Scotland,
he became a director of Caledonia in 1976, held the position of
chief executive from 1987 to 2002 and was appointed chairman
in 1994. He is a non-executive director of Close Brothers Group,
Offshore Logistics and Kerzner International. Age 61.
Tim Ingram – chief executive
After an early career in international banking, he was finance
director and later chief executive of First National Finance
Corporation from 1992 and a managing director of Abbey National
from 1996 to 2002. He was approved chief executive of Caledonia
in 2002. He is also a non-executive director of Sage Group and
Savills. Age 56.
Jonathan Cartwright – finance director
After qualifying as a chartered accountant with KPMG, he worked
for Hanson, serving as group financial controller and finance
director of Imperial Foods and other Hanson subsidiaries. He
joined Caledonia in 1989 and was appointed finance director in
1991. He is a non-executive director of Offshore Logistics. Age 50.
Charles Cayzer – executive director
Having gained experience of merchant banking, commercial
banking and corporate and project finance with Baring Brothers,
Cayzer Irvine & Co and Cayzer Ltd, he was appointed a director
of Caledonia in 1985. He is also chairman of The Sloane Club,
Easybox and Edinmore. Age 47.
John May – executive director
Appointed an executive director in September 2003, he worked
for the Hambros Group for over 20 years until 1999, where he was
an executive director of Hambros Bank and joint managing
director of Hambro Countrywide. He then ran his own private
equity investment and consultancy business. He is a non-
executive director of British Empire Securities, Oval and
Marketform. Age 49. Caledonia Investments plc
Annual report 2004 29
Jonathan Cartwright Charles Cayzer James Loudon John May David Thompson Charles Allen-Jones
James Loudon – non-executive deputy chairman
Appointed a non-executive director of Caledonia in 1995 and
non-executive deputy chairman in 2001, he was group finance
director of Blue Circle Industries from 1987 to 2001. He is 
a non-executive director of James Hardie Industries NV and
Lafarge Malayan Cement Berhad. He is also a director of 
Lafarge UK Pension Trustees and is a governor of the 
University of Greenwich. Age 61.
Charles Allen-Jones – senior independent
non-executive director
Appointed a non-executive director of Caledonia in 2001, he was
a partner of Linklaters, the international law firm, for 33 years,
including five years as senior partner until his retirement in 2001. 
He is also a non-executive director of Hongkong Land Holdings
and a Trustee of the British Museum. Age 64.
Mark Davies – non-executive director
Appointed a non-executive director of Caledonia in 2002, he
founded Inter Commodities in 1972, became chief executive 
of Gerrard Group in 1995 and was an executive director of 
Old Mutual Financial Services (UK) from 2000 until his retirement
in 2001. He is a director of Fleming Family & Partners and
chairman of FF&P Asset Management and chairman of Thornhill
Acquisitions. Age 55.
Sir David Kinloch – non-executive director
A member of the Institute of Chartered Accountants of Scotland,
he joined Caledonia as a director in 1988 and held the position 
of deputy chief executive from 1994 until his retirement as an
executive director in January 2004. He is also non-executive
chairman of ISIS Asset Management and the Wallem Group. 
Age 62.
David Thompson – non-executive director
Appointed a non-executive director of Caledonia in 2003, he is
chairman of The Wolverhampton & Dudley Breweries, having
served as its managing director from 1986 to 2001. He is also 
a non-executive director of The JP Morgan Fleming Smaller
Companies Investment Trust, Persimmon, The Income & Growth
Trust and Tribal Group. Age 49.
Michael Wyatt – non-executive director
After a career in the Army from 1955 to 1969, he was a director of
British & Commonwealth Holdings from 1981 to 1987. Appointed
an executive director of Caledonia in 1975, he served as deputy
chairman from 1994 until 2001, and became a non-executive
director in 2002. Age 66. Caledonia Investments plc
Annual report 2004 30
Associate directors
T ony Carter Jamie Cayzer-Colvin Graeme Denison Jonathan Hale T ony Hambro Paul Whiteley Will Wyatt
T ony Carter
He joined Caledonia in 1989 after working for Westminster Bank,
British & Commonwealth Holdings and the Bricom Group. He
was appointed an associate director in 1998 and has overall
responsibility for group tax matters. Age 54.
Jamie Cayzer-Colvin
After a short service commission in the Army, he worked for
Whitbread and GEC. He joined Caledonia in 1995, working at
Amber before becoming an investment executive in 1999. 
He was appointed an associate director in 2002 and is chairman
of Amber Industrial and a non-executive director of Rathbone
Brothers, Polar Capital Partners and The Sloane Club. Age 39.
Graeme Denison
A qualified chartered secretary, he joined Caledonia in 1989 after
working in the publishing and construction industries. He was
appointed group company secretary in 1992 and an associate
director in 1998. Age 43.
Jonathan Hale
After qualifying as a chartered accountant with Arthur Andersen
& Co, he worked for National T elecom and Alcatel before joining
Caledonia in 1990. Responsible for group treasury and VAT , 
he was appointed an associate director in 2002. Age 41.
T ony Hambro
After a 17 year banking career at Samuel Montagu and Grindlays
Bank, in 1984 he set up his own corporate finance consultancy,
mainly involved in post-Big-Bang stockbroking consolidation.
From 1994 to 2002, he was an executive director of Ockham
Holdings. He joined Caledonia as an associate director in July
2003, having provided consultancy services to the company
since November 2002. Age 56.
Paul Whiteley
After qualifying as a chartered accountant with Coopers &
Lybrand, he worked for Laporte before joining Caledonia in 1989.
He was appointed group finance manager in 1992 and an
associate director in 1998. Age 45.
Will Wyatt
After holding a regular commission in the Army, he worked for
Close Brothers Corporate Finance for three years before joining
Caledonia in 1998 as a project manager for Sterling Industries. 
He became an investment executive in 2000 and was appointed
an associate director in 2002. He is a non-executive director 
of Amber Industrial, Sterling Industries and MORI. Age 35. Caledonia Investments plc
Annual report 2004 31
Directors’ report
The directors present their report and accounts for the year ended 31 March 2004. This report should be read in conjunction with the
directors’ remuneration report and the corporate governance report.
Principal activities and results
Caledonia is an investment trust company. A review of the activities of the company and its operating subsidiaries, together with the
results for the year, is given in the chairman’s statement, the chief executive’s report, the investment review and the financial review,
which should be regarded as part of this report.
With effect from 1 April 2003, the company has been managing its affairs, so as to enable it to comply with the requirements for
approval as an authorised investment trust. Approval as an investment trust is granted retrospectively by the Inland Revenue for each
financial year of a company for which such status is sought. An application for approval for the year ended 31 March 2004 will be
made subsequent to the approval of these accounts by members of the company.
Annual general meeting
The notice of the annual general meeting to be held on 14 July 2004 set out on page 75  contains three items of special business.
Resolution 2 seeks shareholders’ approval of the directors’ remuneration report in compliance with the Directors’ Remuneration
Report Regulations 2002. The directors’ remuneration report, which is set out on pages 34 to 41, explains the company’s overall policy
on directors’ remuneration and provides details of the remuneration paid to directors for the year ended 31 March 2004.
Resolution 9 will be proposed, as in previous years, to renew the authority last granted on 18 July 2003 to allot unissued ordinary
shares in the capital of the company. Whilst they do not have any present intention of exercising this authority, the directors would 
be authorised to allot shares up to a nominal amount of £1,210,224, representing approximately 33.33% of the company’s issued
ordinary share capital as at 19 May 2004. The authority, if granted, will last until the next annual general meeting.
Resolution 10 seeks to renew the directors’ ability to issue ordinary shares for cash in connection with a rights issue or other than pro
rata to existing shareholders. In the case of an issue of ordinary shares other than pro rata to existing shareholders, the authority will
be limited to a nominal amount of £181,533, which represents approximately 5% of the issued ordinary share capital as at 19 May 2004.
The authority, if granted, will last until the next annual general meeting.
Extraordinary general meeting
The company is seeking shareholders’ approval at an extraordinary general meeting convened for 11 June 2004 (‘EGM’) for an
authority to make market purchases of up to 7,260,000 of its own ordinary shares, being approximately 10% of the company’s issued
ordinary share capital, at a price per ordinary share not more than 5% greater than the average of the middle market quotations for
such shares during the five business days preceding any such purchase, nor less than 5 pence, being the nominal value of an ordinary
share. The company has stated that it will not make market purchases of its own shares where to do so would result in the voting
rights of the concert party that is deemed to exist by virtue of the Cayzer family interests in the company (‘Concert Party’) exceeding
49.9%. At 19 May 2004, being the date of this report, the total voting rights of the Concert Party stood at 48.62%. The company is also
seeking shareholders’ approval at the EGM of a waiver by the Panel on Takeovers and Mergers of the obligation that could arise on
the Concert Party under the City Code on Takeovers and Mergers to make a general offer for the company following an increase in the
voting rights of the Concert Party as a result of the company making market purchases of its own shares. If granted, this waiver will
enable the company to make market purchases of its shares provided that such purchases do not increase the total voting rights of
the Concert Party to over 49.9%. Without this waiver, the company will only be able to use the power to make market purchases of 
its own ordinary shares provided that any such purchases do not increase the percentage voting rights of the Concert Party either to
above its highest percentage in the previous 12 months or by more than 1% over the previous 12 months, after taking into account
any purchases made by the Concert Party during that period.
It will be the directors’ intention to use this power only in circumstances where they believe, after careful consideration, that such 
a purchase would be in the best interests of shareholders and would result in an increase in net asset value per ordinary share. 
In considering whether to exercise this power, the directors will also take into account both the longer term investment opportunities
available to the company and the discount at which its shares are trading in the market relative to their underlying net asset value.
The authority to make market purchases, if granted at the EGM, will expire on 1 January 2006 or, if earlier, at the conclusion of the next
annual general meeting following the annual general meeting to be held on 14 July 2004.
Since 1 December 2003, the company has been able to hold shares acquired by way of market purchases as treasury shares rather
than having to cancel them. However, the company does not currently have the requisite power in its articles of association to reissue 
any shares held in treasury on a non pre-emptive basis. In order to be able to take full advantage of the flexibility offered by treasury
shares, the company is seeking shareholders’ approval at the EGM to a minor amendment to its articles of association such that the
provisions which enable the board to allot shares on a non pre-emptive basis, subject to shareholder approval, will also apply to the
reissue of treasury shares. If this amendment is approved, the authority granted by resolution 10 to issue shares on a non pre-emptive
basis will also apply to the reissue of shares held in treasury.
In accordance with the guidelines issued by the Investment Committees of the Association of British Insurers and National
Association of Pension Funds Ltd, the directors confirm their intention that no more than 7.5% of the issued ordinary share capital
should be allotted for cash or, if the shareholder approval referred to above is granted, reissued from treasury, on a non pre-emptive
basis during any rolling three year period. Caledonia Investments plc
Annual report 2004 32
Directors and their interests
The directors of the company are shown on page 77. All of the directors served throughout the year, with the exception of Mr J M May,
who was appointed on 1 September 2003. Sir David Kinloch will retire from the board at the conclusion of the annual general meeting
on 14 July 2004.
Mr C M Allen-Jones, The Hon C W Cayzer and Mr T C W Ingram retire by rotation at the annual general meeting and, being eligible,
offer themselves for re-election. From 30 June 2004, Mr J R H Loudon will have served as a director for over nine years. Accordingly, 
he will also retire at the annual general meeting in accordance with the recommendations of the revised Combined Code published 
in July 2003 and, being eligible, offers himself for re-election. Neither The Hon C W Cayzer, nor Mr T C W Ingram, has a contract of
service that cannot be determined within one year. Neither Mr C M Allen-Jones, nor Mr J R H Loudon, both of whom are non-executive
directors, has any entitlement to compensation in the event of their ceasing to be directors.
Following formal individual performance evaluation and a review of the structure, size and composition of the board as a whole, 
the Nomination Committee confirms that the non-executive directors proposed for re-election each continue to demonstrate strong
commitment to their roles and that through their knowledge, skills and experience, as evidenced by their biographies that appear 
on page 29, they continue to provide an effective contribution to the functioning of the board and its committees. The Nomination
Committee therefore believes that both of the non-executive directors proposed for re-election should be re-elected.
The interests of the directors and their families in the ordinary share capital of the company at 31 March 2004 were as follows:
Beneficial Non-beneficial
2004 2003 2004 2003
No No No No
P N Buckley 582,325 562,325 265,198 236,107
T C W Ingram 50,981 37,000 – –
J H Cartwright 12,810 6,810 – –
The Hon C W Cayzer 107,737 107,737 – –
J M May 2,600 – – –
J R H Loudon 9,442 9,442 9,930 14,330
C M Allen-Jones 7,500 7,500 – –
M E T Davies – – – –
Sir David Kinloch 15,334 3,334 – –
D G F Thompson 2,000 2,000 – –
M G Wyatt 276,500 276,500 – –
Comparative figures are at 31 March 2003 or at date of appointment if later.
The Caledonia Investments plc Employee Share Trust acquires and holds shares in the company for subsequent transfer to 
employees exercising options under the company’s executive share option schemes. By virtue of the provisions of the Companies 
Act 1985, each executive director, as a potential beneficiary, is deemed to have an interest in any shares in the company held by the
trust. At 31 March 2004, the trust held 524,150 shares (2003 – 542,150 shares).
Details of the directors’ options to acquire ordinary shares in the company at 31 March 2004 are set out in the directors’ remuneration
report on pages 38 and 39. There have been no changes in directors’ interests shown above notified up to the date of approval of 
these accounts.
The register of directors’ interests (which is open to inspection) contains full details of the directors’ shareholdings and options.
Substantial interests
The company has been notified of the following interests amounting to 3% or more of the issued ordinary share capital as at 19 May 2004:
Number of ordinary shares % of class issued
The Cayzer Trust Company Ltd 27,661,762 38.1
BriT el Fund Trustees Ltd 5,379,641 7.4
The interest of The Cayzer Trust Company Ltd (‘Cayzer Trust’) comprised a direct holding of 27,417,126 shares (37.8%) and an interest
in a further 244,636 shares (0.3%) arising by virtue of voting and pre-emption arrangements entered into between Cayzer Trust and 
a minority group of its shareholders.
The interest of BriT el Fund Trustees Ltd (‘BriT el’) included 5,021,468 shares (6.9%) in which Hermes Focus Asset Management Ltd
(‘Hermes’) is interested as general partner of various partnerships managed by Hermes SLP Ltd and Lens Investors (UK) LLC. Hermes
and Hermes SLP Ltd are both subsidiaries of Hermes Pensions Management Ltd, which is ultimately owned by BriT el, a company
controlled by the trustees of the BT Pension Scheme.
Directors’ report
continued Caledonia Investments plc
Annual report 2004 33
The following have also notified the company of common interests in its shares arising by virtue of their interests in partnerships
managed by Hermes. These interests are all included in the 5,021,468 shares in which Hermes is interested, as referred to above:
Number of ordinary shares % of class issued
Bradford Metropolitan District Council 2,438,114 3.4
Devon County Council 4,042,843 5.6
Essex County Council 2,435,114 3.4
Merseyside Pension Fund 2,438,114 3.4
Ontario Municipal Employees Retirement System 2,438,114 3.4
In addition to the above, Merseyside Pension Fund has notified the company of a direct holding of 195,000 shares (0.3%).
Cayzer Trust, certain directors of Caledonia, the Caledonia Investments plc Employee Share Trust and other members of the wider
Cayzer family are deemed to form a concert party for the purposes of the City Code. At 19 May 2004, this concert party was interested
in 35,306,734 shares, representing 48.62% of the issued ordinary share capital of the company.
Employees
Group companies are encouraged to develop their own consultative policies. These include regular meetings held between local
management and employees to allow a free flow of information and ideas.
The group gives full and fair consideration to applications for employment from disabled persons, having regard to their aptitudes 
and abilities, and group companies make every effort to treat disabled persons equally with others. Where existing employees become
disabled, it is the group’s policy to provide continuing employment under normal terms and conditions and to provide training and
career development and promotion to disabled employees wherever appropriate.
Customers and suppliers
The group’s policy in relation to all of its suppliers is to settle the terms of payment when agreeing the terms of the transaction. The
group will abide by those terms provided that it is satisfied that the supplier has provided the goods or services in accordance with 
the agreed terms and conditions. The group does not follow any code or statement on payment practice and Caledonia itself does 
not have any trade creditors.
Charitable donations
Group companies support chosen community and charitable causes local to their areas of operation. Overall, the group made
charitable donations during the year amounting to £102,000.
Auditors
A resolution will be proposed at the annual general meeting to reappoint KPMG Audit Plc as auditors of the company. A description 
of how the Audit Committee ensures the objectivity and independence of the auditors is set out on page 43.
By order of the board
G P Denison
Secretary
19 May 2004 Caledonia Investments plc
Annual report 2004 34
This report has been prepared to comply with the Directors’ Remuneration Report Regulations 2002 (the ‘Regulations’). The tables
included in the statements below on directors’ remuneration, pensions and share options have been audited.
The Remuneration Committee
The Remuneration Committee is a standing committee of the board consisting solely of independent non-executive directors. 
Its current membership comprises Mr M E T Davies (chairman), Mr C M Allen-Jones and Mr J R H Loudon. Mr P N Buckley, 
Mr T C W Ingram, Mr D G F Thompson and Major M G Wyatt also attended certain meetings of the Committee by invitation, although
none were present when their own remuneration was discussed.
The Committee, whose written terms of reference are published on the company’s website and are available on request from the
company secretary, has been established for the following purposes:
1. to determine and agree with the board the framework and broad policy for the remuneration of the executive directors and such
other members of the executive management as it is requested by the board to consider and to review the on-going
appropriateness and relevance of the remuneration policy;
2. to approve the design of, and determine targets for, any performance related pay schemes operated by the company and to
approve the total annual payments made under such schemes;
3. to review the design of all share incentive plans for approval by the board and shareholders and, for any such plans, to determine
each year whether awards will be made and, if so, the overall amount of such awards, the individual awards to executive directors
and other senior executives and the performance targets to be used;
4. within the terms of the agreed policy, to determine the total individual remuneration packages of each executive director (and if
requested by the board, other senior executives) including, where appropriate, bonuses, incentive payments, share options and
other awards;
5. to determine the policy for and scope of pension arrangements, service agreements, termination payments and compensation
commitments for executive directors and, if requested by the board, other senior executives; and
6. to review and assess annually the remuneration trends across the company.
References to executive directors also include the chairman.
In determining such policies and individual remuneration packages, the Committee has given full consideration to the provisions 
of section 1.B.1 of the Combined Code published in 1998.
During the year, the Committee received advice from Hay Group, a firm of independent remuneration consultants appointed by the
company, assessing the comparability of the company’s remuneration policies and individual remuneration packages with the
marketplace and from Freshfields Bruckhaus Deringer in relation to directors’ service contracts. Hay Group only advised in relation 
to the remuneration of executive directors and senior management and Freshfields Bruckhaus Deringer are the company’s main legal
advisers. The Committee also consulted with the chairman and chief executive in relation to the remuneration of all of the executive
directors other than their own. Internal support was provided to the Committee by the company secretary.
Remuneration policy for executive directors
The company’s policy on executive directors’ remuneration is to provide remuneration packages which are sufficiently competitive 
to attract, retain and motivate executive directors of the quality needed to manage and grow the company successfully, and in
particular to deliver the company’s financial aim of achieving consistently over the longer term, using five and ten year measurements,
a total shareholder return in excess of the FTSE All-Share T otal Return. The company’s objective for the year to 31 March 2005 
and subsequent financial years is to continue to weight total remuneration more towards performance related elements, with
proportionately lower basic salaries, but with potential for higher performance related awards subject to more demanding
performance criteria. In this way, the company believes that the remuneration of its executive directors will be further aligned with 
the performance of the company and therefore with the interests of shareholders.
The Regulations require that the directors’ remuneration report contains a statement on the company’s policy on directors’
remuneration for the following financial year and for financial years subsequent to that. Whilst it is intended that the policy statement
set out in this report should continue to apply for the year to 31 March 2005 and for subsequent years, and the Committee is able 
to state its remuneration policy for the year to 31 March 2005 with reasonable certainty, it is less certain that this policy will continue
without amendment in subsequent financial years. This is because 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. Any changes in policy for financial years after 31 March 2005 will be described in future directors’ remuneration
reports, which will continue to be subject to shareholder approval. All statements in this report in relation to remuneration policy for
years after 31 March 2005 should be read in this light.
Directors’ remuneration report Caledonia Investments plc
Annual report 2004 35
Policy on individual components of executive directors’ remuneration
Basic salary and benefits
Basic salary is determined by the Remuneration Committee by reference to the experience and responsibilities of the director
concerned and taking into account external market research. The company’s policy is to pay salaries and other benefits which are
competitive, but not excessive, in relation to the marketplace. The company provides a range of benefits, such as company cars, 
life insurance, permanent health insurance, and private medical cover. Company cars are however being phased out and replaced 
by cash alternatives.
Bonus
The company operates a discretionary annual bonus scheme for executive directors, which takes into account both the performance
of individual directors and of the company over the short and medium term. The policy for the year ended 31 March 2004 was that
bonuses of up to a maximum of 60% of basic salary may be awarded, dependent on the level of the outperformance of Caledonia’s
net asset value per share (with dividends added back) over the FTSE All-Share T otal Return index, measured over 1 and 3 years, and
on the individual director’s performance. Any such awards are subject to the overriding discretion of the Remuneration Committee.
The Remuneration Committee may also award bonuses outside the terms of the company’s annual bonus scheme. No bonus
payments are pensionable.
Pensions
The company’s policy on pension provision is to provide a means whereby executive directors either receive a pension at retirement
age from the company, or are funded to operate their own money purchase pension plans or other arrangements. The executive
directors, other than Mr T C W Ingram and Mr J M May, participate in the Caledonia Pension Scheme, which is a defined benefits
scheme and is contributory for employees who joined the company after 1 April 1988, but which is now closed to new members. 
The scheme provides a pension of up to two-thirds of final pensionable salary on retirement dependent on length of service and also
provides for dependants’ pensions and lump sums on death-in-service. All of the executive directors participating in the scheme,
other than Mr J H Cartwright, transferred into the scheme from The Union-Castle Line Superannuation Scheme which was non-
contributory, and this status has been preserved. Mr Ingram and Mr May do not participate in any company pension scheme, but
instead a fixed percentage of basic salary is paid into personal pension arrangements or as a cash supplement, which is inclusive 
of associated income tax and national insurance costs. The percentage of basic salary is 25% for Mr Ingram and 10% for Mr May.
It is the company’s policy that any future executive directors recruited from outside the company will be funded to operate their own
pension arrangements and that the company will not offer participation in any defined benefits arrangements.
Share options
A key objective of the company’s remuneration policy is to motivate executive directors to deliver long term shareholder value. The
Remuneration Committee believes that this is best achieved through the grant of share options in addition to annual salary and bonus,
as these provide the opportunity to build a meaningful shareholding in the company and link individual reward with corporate
performance over the longer term.
It is the policy of the Remuneration Committee to grant options to directors and other senior employees at a level commensurate 
with their individual duties and responsibilities. The maximum exercise price of options that can be granted to any executive under 
the company’s share option schemes is equal to four times total annual emoluments. Option grants are phased and no options are
granted at a discount. The Remuneration Committee may establish special arrangements for individual executive directors where it
considers it necessary to do so to secure their appointment. Special option terms were agreed with Mr T C W Ingram and Mr J M May
in connection with their recruitment to the company, as described on page 40. Caledonia Investments plc
Annual report 2004 36
Directors’ remuneration report
continued
Policy on executive directors’ service contracts
It is the policy of the company that no executive director should be offered a service contract that cannot be determined within one
year or which contains provision for predetermined compensation in excess of one year’s total emoluments. All existing directors’
service contracts comply with this policy.
Policy on external non-executive directorships held by executive directors
It is the company’s policy to allow executive directors to hold external non-executive directorships unrelated to the company’s
business, provided that the time commitment 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 in certain circumstances. Details of any such fees
retained by executive directors are disclosed on page 37.
Policy on non-executive directors’ remuneration and terms of appointment
It is the company’s policy that non-executive directors should be appointed for fixed periods of no more than three years (from the
next general meeting following their initial appointment in the case of new non-executive directors) and that re-appointment at the end
of such periods should not be automatic. Non-executive directors are paid an annual fee determined by the board as a whole within
the overall limit contained in the articles of association, but do not receive any other benefits for their service as non-executive
directors from the company. The basic fee for non-executive directors was £26,000 (2003 – £25,000) and fees of £3,000 per annum
(2003 – £nil) were paid for the chairmanships of the Audit and Remuneration Committees. Non-executive directors may also be paid
additional fees agreed by the board where they have performed services that, in the opinion of the board, are over and above their
normal duties.
The company is entitled to terminate a non-executive directors’ appointment at any time without compensation.
Performance graph
The graph below shows the company’s total shareholder return (‘TSR’) against that of the FTSE All-Share T otal Return index for the
five financial periods ending on 31 March 2004 and has been prepared in accordance with the Regulations. TSR has been calculated
assuming that all dividends are reinvested on their ex-dividend date. The FTSE All-Share T otal Return index has been chosen as it is
the benchmark by which the company measures its delivery of shareholder value over the longer term.
220
180
140
100
60
99 00 01 02 03 04
Source: FTSE/Datastream
Caledonia total shareholder return
FTSE All-Share Total Return
Total shareholder return – five years Caledonia Investments plc
Annual report 2004 37
Statement on directors’ remuneration (audited)
T otal emoluments of the directors were as follows:
2004 2003
£’000 £’000
Fees 145 118
Salaries 1,436 1,303
Benefits 124 107
Performance related bonuses 921 563
2,626 2,091
Gains on exercise of share options 100 90
2,726 2,181
The emoluments of individual directors were as follows:
Fees and T otal Total
salaries Benefits Bonuses 2004 2003
£’000 £’000 £’000 £’000 £’000
Executive
P N Buckley 276 27 166 469 511
T C W Ingram 335 19 201 555 398
Sir David Kinloch
1
275 18 224 517 467
J H Cartwright 234 25 140 399 348
The Hon C W Cayzer 162 25 97 284 249
J M May
2
154 10 93 257 –
Non-executive
J R H Loudon 26 – – 26 25
C M Allen-Jones 34 – – 34 25
M E T Davies
3
29–– 29 21
Sir David Kinloch
1
4–– 4 –
D G F Thompson
4
26–– 26 2
M G Wyatt 26–– 26 25
J Burnett-Stuart
5
–––– 19
L A W Evans
6
–––– 1
1,581 124 921 2,626 2,091
1. Became a non-executive director with effect from 1 February 2004.
2. Appointed on 1 September 2003.
3. Appointed on 27 May 2002.
4. Appointed on 3 March 2003.
5. Retired on 31 December 2002.
6. Died on 14 April 2002.
Benefits mainly comprised cars or cash alternatives, fuel for private mileage and private medical cover. The fees in respect of 
Mr L A W Evans for 2003 were paid to Lazard & Co Services Ltd. Included in the 2004 bonus for Sir David Kinloch was an amount of
£58,875 paid outside the terms of the company’s annual bonus scheme. This was an award made to Sir David by the Remuneration
Committee in recognition of his stewardship of the company’s interest in ISIS Asset Management and his contribution to the
development of that company’s business.
In addition to the amounts shown above, Mr T C W Ingram was paid an amount of £42,265, before tax, in lieu of contributions to his
personal money purchase pension arrangements as described in the statement on directors’ pensions below. Certain executive
directors also hold external non-executive directorships unrelated to the company’s business, where it has been agreed that they 
may retain the fees arising therefrom. Mr T C W Ingram is a non-executive director of Sage Group, for which he receives an annual 
fee of £30,000. Mr Ingram was appointed to the board of Sage Group before he joined Caledonia. Sir David Kinloch was receiving 
an annual fee of £11,000 as a non-executive director of JPMorgan Fleming Chinese Investment Trust at the time he ceased to be an
executive director of Caledonia on 1 February 2004. He has since retired from the board of this investment trust. Mr J M May is
chairman of Covenant Healthcare, which pays a fee of £20,000 per annum for his services to a private company owned by Mr May 
and his wife. Mr May was appointed to this position prior to his joining Caledonia. Caledonia Investments plc
Annual report 2004 38
Directors’ remuneration report
continued
Statement on directors’ pensions (audited)
Pension benefits accrued by directors during the year under the company’s defined benefits scheme were as follows:
Transfer value
of increase in Change in
Increase in accrued pension transfer value
Accrued Increase in accrued pension over the year, Transfer value of Transfer value of over the year,
pension accrued pension during the year, net of director’s accrued pension accrued pension net of director’s
at 31.03.04 during the year net of inflation contributions at 31.03.04 at 31.03.03 contributions
Name (1) £ pa (2) £ pa (3) £ pa (4) £ (5) £ (6) £ (7) £
P N Buckley 225,649 11,023 5,443 92,379 3,829,722 3,566,839 262,883
J H Cartwright 86,770 9,156 7,138 75,603 1,032,844 709,210 314,274
The Hon C W Cayzer 64,166 4,813 3,270 36,126 708,894 504,051 204,843
Sir David Kinloch 218,611 14,327 10,693 182,628 3,733,705 3,481,561 252,144
1. Except for Sir David Kinloch, the accrued pensions were the amounts that would be paid at normal retirement age, ignoring any revaluation, if the director left service at the
relevant date. Sir David Kinloch retired on 31 January 2004 and his pension has been calculated as at that date.
2. The increase in accrued pension, net of inflation, in column (3) is calculated by subtracting the pension accrued to 31 March 2003, multiplied by the increase in the Retail
Prices Index for the year to 31 March 2004, or earlier date of retirement, from the accrued pension to 31 March 2004, or earlier date of retirement.
3. The transfer value shown in column (4) represented the value of the increase in accrued pension during the year, as set out in column (3), minus director’s contributions.
4. The change in transfer value over the year shown in column (7) (calculated as column (5) less column (6) and any directors’ contributions) reflected the impact on transfer
values of factors beyond the control of the company and the directors, such as movements in stock markets. These can cause transfer values at different points in time 
to fluctuate significantly. Disclosed changes in value may therefore be subject to a large degree of volatility and may even be negative.
5. The transfer values have been calculated in accordance with the guidance note ‘GN11’, published by the Institute of Actuaries and Faculty of Actuaries.
During the year, the company made contributions to a money purchase personal pension plan for the benefit of Mr T C W Ingram of
£29,700, being the maximum amount permitted for this tax year under Inland Revenue limits. In accordance with his service contract,
Mr Ingram elected to receive the balance of his agreed pension entitlement by way of cash payment of £42,265, before tax, in lieu of
pension contribution. The company also made contributions to a money purchase pension plan for the benefit of Mr J M May of
£15,606, in respect of the period from the date of his appointment on 1 September 2003.
Statement on directors’ share options (audited)
The directors’ options to acquire ordinary shares in the company as at 31 March 2004 were as follows:
Number of options
Opening Closing Exercise Market price Exercisable
Grant date balance Granted Exercised Lapsed balance price at exercise from date Expiry date
P N Buckley
31.07.96 7,000––– 7,000 745.0p – 31.07.99 31.07.06
16.07.97 6,000––– 6,000 677.5p – 16.07.00 16.07.07
02.09.98 100,000––– 100,000 740.0p – 02.09.01 02.09.08
26.07.99 9,000––– 9,000 757.5p – 26.07.02 26.07.09
19.07.00 8,500––– 8,500 722.5p – 19.07.03 19.07.10
24.07.01 12,500––– 12,500 810.0p – 24.07.04 24.07.11
143,000––– 143,000
T C W Ingram
05.07.02 166,000––– 166,000 782.5p – 05.07.05 05.07.12
20.11.03 – 35,400 – – 35,400 945.0p – 20.11.06 20.11.13
166,000 35,400 – – 201,400
Sir David Kinloch
29.07.93 12,000 – (12,000) – – 495.0p 877.5p
19.07.94 15,000––– 15,000 693.0p – 19.07.97 19.07.04
22.06.95 3,000––– 3,000 653.0p – 22.06.98 22.06.05
18.04.96 79,000––– 79,000 781.0p – 18.04.99 18.04.06
31.07.96 5,000––– 5,000 745.0p – 31.07.99 31.07.06
16.07.97 6,000––– 6,000 677.5p – 16.07.00 16.07.07
02.09.98 8,000––– 8,000 740.0p – 02.09.01 02.09.08
26.07.99 8,000––– 8,000 757.5p – 26.07.02 26.07.09
19.07.00 17,500––– 17,500 722.5p – 19.07.03 19.07.10
153,500 – (12,000) – 141,500 Caledonia Investments plc
Annual report 2004 39
Number of options
Opening Closing Exercise Market price Exercisable
Grant date balance Granted Exercised Lapsed balance price at exercise from date Expiry date
J H Cartwright
29.07.93 6,000 – (6,000) – – 495.0p 877.5p
19.07.94 5,000––– 5,000 693.0p – 19.07.97 19.07.04
22.06.95 3,000––– 3,000 653.0p – 22.06.98 22.06.05
18.04.96 31,500––– 31,500 781.0p – 18.04.99 18.04.06
31.07.96 10,000––– 10,000 745.0p – 31.07.99 31.07.06
16.07.97 12,000––– 12,000 677.5p – 16.07.00 16.07.07
02.09.98 8,000––– 8,000 740.0p – 02.09.01 02.09.08
26.07.99 8,500––– 8,500 757.5p – 26.07.02 26.07.09
19.07.00 10,500––– 10,500 722.5p – 19.07.03 19.07.10
24.07.01 24,000––– 24,000 810.0p – 24.07.04 24.07.11
05.07.02 3,500––– 3,500 782.5p – 05.07.05 05.07.12
20.11.03 – 24,800 – – 24,800 945.0p – 20.11.06 20.11.13
122,000 24,800 (6,000) – 140,800
The Hon C W Cayzer
29.07.93 8,100 – (8,100) – – 495.0p 877.5p
19.07.94 1,500––– 1,500 693.0p – 19.07.97 19.07.04
22.06.95 3,000––– 3,000 653.0p – 22.06.98 22.06.05
18.04.96 35,500––– 35,500 781.0p – 18.04.99 18.04.06
31.07.96 3,500––– 3,500 745.0p – 31.07.99 31.07.06
16.07.97 6,000––– 6,000 677.5p – 16.07.00 16.07.07
02.09.98 5,000––– 5,000 740.0p – 02.09.01 02.09.08
26.07.99 5,500––– 5,500 757.5p – 26.07.02 26.07.09
19.07.00 6,000––– 6,000 722.5p – 19.07.03 19.07.10
24.07.01 8,500––– 8,500 810.0p – 24.07.04 24.07.11
05.07.02 2,500––– 2,500 782.5p – 05.07.05 05.07.12
20.11.03 – 17,100 – – 17,100 945.0p – 20.11.06 20.11.13
85,100 17,100 (8,100) – 94,100
J M May
20.11.03 – 56,000 – – 56,000 945.0p – 20.11.06 20.11.13
– 56,000 – – 56,000
M G Wyatt
18.04.96 17,900––– 17,900 781.0p – 18.04.99 18.04.06
31.07.96 1,500––– 1,500 745.0p – 31.07.99 31.07.06
16.07.97 3,000––– 3,000 677.5p – 16.07.00 16.07.07
02.09.98 6,000 – – (6,000) – 740.0p
26.07.99 6,000 – – (6,000) – 757.5p
34,400 – – (12,000) 22,400
There have been no changes in directors’ options to acquire ordinary shares up to the date of this report. Caledonia Investments plc
Annual report 2004 40
Directors’ remuneration report
continued
Statement on directors’ share options (unaudited)
The company has two executive share option schemes – an original scheme established in 1988 and which expired in April 1998 for
the purposes of new option grants, and a 1998 scheme approved by shareholders in July 1998, under which option grants
commenced in September 1998.
Under the terms of both schemes, options may be exercised between three and ten years after the date of grant, although only one
third of the shares comprised in an option may be exercised after three years from grant, with the remaining two thirds becoming
exercisable six years after grant. Options may only be exercised if a performance target is met.
All targets for options granted under the original scheme, which related to the company’s earnings per share growth or the
performance of its adjusted net asset value per share against external benchmarks, have now been achieved. For options granted
from 1998 to 2001 under the 1998 scheme, the target requires the company’s adjusted net asset value per share to outperform either
the Retail Price Index by 3% per annum, or the average of the increases in the FTSE 250 and the FT Investment Companies indices,
over a consecutive three year period prior to exercise. For options granted in 2002 and 2003, the performance target is as above,
except that the FTSE All-Share index is used as the reference index rather than the FTSE 250 and FT Investment Companies indices.
Since the year end, the Remuneration Committee has resolved to apply more demanding performance targets for future option grants
under the 1998 scheme. These will require that 50% of the shares comprised in an option will vest if the company’s net asset value 
per share outperforms the Retail Price Index by 3% per annum over the relevant measurement period, with the other 50% vesting if
the company’s net asset value per share outperforms the FTSE All-Share index over the relevant measurement period. The performance
measure has to be achieved either over the first three years, or over the first four years, after the date of grant. If the performance
measure is not achieved four years after the date of grant, the options will lapse.
The performance targets have been met for all options granted under the 1998 scheme from 1998 to 2001. The Remuneration
Committee has selected the targets referred to above because it believes they provide an appropriate benchmark of the company’s
longer term performance.
Included in Mr Ingram’s options granted on 5 July 2002 are options over 83,000 shares granted outside the 1998 scheme and on the
following special performance-related terms. As in the case of options granted under the 1998 scheme, only one third of the shares
under these special options are exercisable three years after grant, with the remaining two thirds becoming exercisable six years after
grant. The special options are subject to a stretching performance condition requiring Caledonia’s total shareholder return (share 
price growth plus the value of reinvested dividends – ‘TSR’) to outperform the FTSE All-Share T otal Return index (‘Index’) over the
measurement period, which commenced on the date of grant. A tranche will vest in full if Caledonia’s TSR exceeds that of the Index
by an average of at least 2% per annum over the relevant measurement period. If Caledonia’s TSR equals that of the Index, none of
that tranche will be exercisable and there will be proportionate vesting of a tranche if Caledonia’s TSR exceeds that of the Index by 
an average of between zero and 2% per annum. For the one third tranche, the performance measure will be first applied three years
after grant, with two re-test opportunities four and five years after grant. For the two thirds tranche, the performance measure will be
first applied five years after grant, with two re-test opportunities six and seven years after grant. If Mr Ingram remains in service until
retirement at age 62, the option will remain exercisable until ten years from grant if the performance conditions are met. Otherwise, 
Mr Ingram must normally be in employment to be able to exercise the options. The shares required to satisfy Mr Ingram’s special
options will be transferred from the Caledonia Investments plc Employee Share Trust. The remaining terms of the special options 
are based on the rules of the 1998 scheme, and include provisions that any benefits obtained from the special options will not be
pensionable and that the terms of the special options will not normally be capable of amendment to the advantage of the option
holder without the prior approval of shareholders in general meeting.
Mr May joined the company on 1 September 2003. In accordance with the terms of his recruitment, there are included in Mr May’s
options granted on 20 November 2003 options over 28,000 shares granted outside the 1998 scheme. The performance conditions 
and other terms of these options are the same as those set out above for Mr Ingram (save that Mr May’s options are not subject 
to preservation on retirement in the manner described above for Mr Ingram). These options were in addition to options over 28,000
shares granted to Mr May on the same date under the 1998 scheme. The Remuneration Committee is satisfied that this special option
arrangement, which is subject to more stringent performance conditions than those which apply to the 1998 scheme, is appropriate
and aligns Mr May’s interests with those of shareholders. As this was a special arrangement to facilitate, in unusual circumstances, 
Mr May’s recruitment as an executive director, shareholders’ approval was not required by virtue of paragraph 13.13A of the Listing
Rules. The circumstances were unusual because the Remuneration Committee considered it essential to secure Mr May’s services 
by providing him with a performance-related option package on these special terms. The Remuneration Committee also considered 
it appropriate that Mr Ingram and Mr May should be subject to similar long-term incentive arrangements.
At 31 March 2004, the market price of the company’s shares was 1017.0p (2003 – 642.5p) and the range during the year was 642.5p 
to 1081.0p. Caledonia Investments plc
Annual report 2004 41
Statement on directors’ service contracts and non-executive directors’ letters of appointment
Executive directors have service contracts with Caledonia Group Services Ltd, a wholly-owned subsidiary of the company, details 
of which are summarised below:
Name Date of contract Notice period Unexpired term
P N Buckley 11.06.02 12 months Rolling 12 months
T C W Ingram 11.06.02 12 months Rolling 12 months
J H Cartwright 11.06.02 12 months Rolling 12 months
The Hon C W Cayzer 11.06.02 12 months Rolling 12 months
J M May 01.09.03 12 months Rolling 12 months
During the year, Sir David Kinloch was also employed by Caledonia Group Services Ltd under a service contract dated 11 June 2002,
which terminated on his retirement from full time employment on 31 January 2004.
Directors’ service contracts contain provisions whereby the company may in its discretion terminate the contract without notice and
make a payment in lieu of notice to the director and whereby a liquidated sum is payable by the company in the event of termination
within one year following a change of control. Any such payment in lieu of notice or liquidated sum would be equivalent to no more
than one year’s total emoluments.
The service contracts of the directors, other than Mr Ingram’s and Mr May’s, also contain provisions whereby, in the event of a payment
in lieu of notice or payment of a liquidated sum on termination, the director concerned would also be entitled to an increase in his
pensionable service equivalent to the unexpired period of notice under his contract.
Non-executive directors do not have service contracts, but are appointed under letters of appointment which provide for termination
without notice or compensation.
The directors’ remuneration report was approved by the board on 19 May 2004 and signed on its behalf by:
M E T Davies
Chairman of the Remuneration Committee Caledonia Investments plc
Annual report 2004 42
Corporate governance report
The board recognises the importance of good corporate governance and this report describes how the company has applied the
principles of good corporate governance as set out in the Combined Code issued in 1998 (‘Combined Code’).
The company has complied throughout the year with the provisions set out in section 1 of the Combined Code.
On 23 July 2003, the Financial Reporting Council published a revised Combined Code (‘Revised Code’), which is applicable to the
company’s financial year which commenced on 1 April 2004. Caledonia is not formally required to report on how it has applied the
principles of the Revised Code, or complied with its provisions, until the company’s 2005 annual report, however, where steps have
already been taken to achieve compliance, these are described in this report.
The company is also a member of the Association of Investment Trust Companies (‘AITC’), which has published its own Code of
Corporate Governance. The provisions of the AITC Code differ in certain respects from those of the Revised Code, which the
company regards as its corporate governance benchmark, however the board believes that the company complies with the broad
principles set out in the AITC Code, to the extent that they are applicable to a self-managed trust.
The board
Overall responsibility and operation
The board as a whole is responsible for the group’s objectives and policies and the management of its resources. It has eleven
scheduled meetings a year, but also convenes at additional times when required. The board has adopted a Schedule of Authorities
which sets out matters specifically reserved to it for decision, which include strategy, material capital and revenue transactions and
changes in business activities, treasury policies, risk management and internal policy limits relating to the company’s investment
activities. The Schedule of Authorities also sets out the authorities that are delegated to board committees and to executive
management.
All directors receive appropriate and timely information to ensure that they are properly briefed in advance of board meetings and
have unlimited access to the company secretary and other senior management should further information be required. Non-executive
directors have access to independent professional advice at the company’s expense where they judge it necessary to discharge their
responsibilities as directors.
Appointment, induction and training
All new directors appointed by the board are required to seek election by shareholders at the next general meeting of the company
following their appointment and subsequently all directors are required to retire by rotation at least every three years. Any non-
executive director who has served on the board for over nine years is subject to annual re-election. On appointment, new directors are
offered induction and training considered appropriate by the board and subsequently as necessary. The company secretary provides
details of, and where requested arranges attendance at, external courses to assist in directors’ professional development. 
Board composition
At the date of this report, the board comprised 11 directors, although Sir David Kinloch will retire from the board at the conclusion 
of annual general meeting on 14 July 2004. Excluding the chairman, four of the directors were executive and six non-executive. The
non-executive directors considered by the board to be independent were Messrs C M Allen-Jones, M E T Davies, J R H Loudon and 
D G F Thompson. Sir David Kinloch and Major M G Wyatt, who were both previously executive directors, were not considered to be
independent. On 30 June 2004, Mr J R H Loudon will have served on the board for over nine years and as a result will no longer meet
the Revised Code’s definition of independence. For this reason, the board will cease to consider him as independent from that date,
although the board does not regard his length of tenure, or his genealogical ties with the wider Cayzer family, as in any way affecting
his ability to exercise independent judgement in his contribution and commitment to the board and its committees. Collectively, the
directors bring a wide range of experience, skills and expertise to the stewardship of the company, as evidenced by their individual
biographies, which appear on pages 28 and 29.
The board is led by the chairman, Mr P N Buckley, whose responsibilities have been agreed and set out in writing in the Schedule of
Authorities adopted by the board. The chairman’s primary role is to ensure that the board and individual directors are able to operate
efficiently by setting the agenda, style and tone of board discussions to promote constructive debate and effective decision making.
He has overall responsibility for monitoring the development needs of the board as a whole and of individual directors and for
ensuring that the performance of the board, its committees and individual directors are evaluated at least once a year. In conjunction
with the chief executive, the chairman is also responsible for ensuring effective communication with shareholders and that board
members develop an understanding of the views of major investors. The latter is achieved by providing the board with briefings
following meetings with major shareholders and through feedback reports from the company’s financial and public relations advisers
and brokers following results presentations, road shows and meetings with institutional shareholders and private client stockbrokers.
The chief executive, Mr T C W Ingram, heads the executive management team and is primarily responsible for the implementation of
the board’s policies and strategies and for managing the activities of the company other than in relation to those matters specifically
reserved to the board or delegated to its committees. His responsibilities have also been agreed and set out in writing in the Schedule
of Authorities adopted by the board. Except where the board gives specific direction otherwise, the chief executive may delegate any
of these matters to other members of the executive management team or to executive committees, but ultimately he is accountable 
to the board for the overall performance of the company.  Caledonia Investments plc
Annual report 2004 43
A strong independent non-executive representation on the board is headed by the senior independent non-executive director, 
Mr C M Allen-Jones. The role of the non-executive directors, as set out in their letters of appointment, is to challenge constructively,
and contribute to, the development of strategy, to scrutinise the performance of management in meeting agreed goals and objectives
and monitor their performance, to satisfy themselves that financial information is accurate and that financial controls and systems 
of risk management are robust and defensible, to determine appropriate levels of remuneration for executive directors and to have 
a prime role in senior management appointments and succession planning. 
A division of power and authority at board level is achieved through the balance of executive and non-executive directors described
above. In addition, a Governance Committee, comprising the senior independent non-executive director and two other independent
non-executive directors, has been formally established to review corporate governance and conflict of interest issues relating to the
company and the board. The Governance Committee has authority to recommend that any director abstains from participation in any
decision of the board or any of its committees where it believes that a conflict of interest could, or could be perceived to, arise.
Through this structure the board safeguards against any individual or small group of individuals being able to dominate the board’s
decision taking.
Board committees
The board has delegated certain specific areas of responsibility to the following standing committees, the terms of reference of which
are published on the company’s website and are available from the company secretary on written request. The current membership 
of these committees is noted on page 77.
The Nomination Committee, chaired by Mr P N Buckley, is responsible for the regular review of the structure, size and composition
(including the skills, knowledge and experience) of the board and for giving consideration to succession planning for executive
directors and, if requested by the board, for other senior executives. It is responsible for identifying and nominating, using external
search consultants where necessary, candidates to fill board vacancies as and when they arise and for keeping under review the
leadership needs of the company, both executive and non-executive. It reviews annually the time required of non-executive directors
and ensures that they receive formal letters of appointment setting out clearly what is expected of them in terms of time commitment,
committee service and involvement outside board meetings.
The Remuneration Committee, chaired by Mr M E T Davies, is responsible for the review of executive remuneration policy, further
details of which are included in the directors’ remuneration report set out on pages 34 to 41. Within that policy, the Committee
determines the remuneration packages of executive directors and reviews those of other senior executive management. It is also
responsible for the design and grant of awards under the company’s share incentive schemes and for the determination of the policy
for and scope of pension arrangements, service agreements, termination payments and compensation commitments for executive
directors and, if requested by the board, for other senior executives.
The Audit Committee, chaired by Mr C M Allen-Jones, is responsible for the monitoring of the integrity of the financial statements 
of the company and any announcements relating to the company’s financial performance and for reviewing any significant financial
reporting judgements contained in them. It also reviews the company’s systems of internal financial control and considers annually
whether an internal audit function is required. The Audit Committee believes that, in the context of the company’s business as an
investment trust, the key issues on which it has to satisfy itself are the integrity of the application of the company’s policy for the
valuation of its investments, particularly those which are unquoted, and the robustness of the group’s internal financial controls. 
The valuations of the company’s unquoted investments are subject to formal six monthly reviews by an internal challenge committee
independent of the investment executives and observed by the external auditors, and a formal report on the effectiveness of the
group’s internal financial control is prepared annually for the board by the group financial controller. It is the Audit Committee’s current
opinion that, in view of these control processes, the size of the entities controlled by Caledonia and the relatively straightforward
control considerations in relation to other investments, a separate internal audit function is not necessary.
It is also the Audit Committee’s responsibility to review and monitor the independence and objectivity of the external auditors and 
the effectiveness of the audit process and to develop and implement policy on the engagement of the external auditor to supply 
non-audit services. On an annual basis, the Committee considers and makes a recommendation to the board as to the appointment,
re-appointment or removal of the external auditors. The Committee has reviewed the independence and objectivity of the external
auditors, including their system of quality controls, and has satisfied itself that there are no issues of concern in relation thereto. 
The Committee has also approved a schedule of specific non-audit activities which may not be undertaken by the external auditors, 
within the broad principles that the external auditors should not audit their 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 auditors.
The Revised Code recommends that at least one member of the Audit Committee should have recent and relevant financial experience.
The Audit Committee considers that Mr J R H Loudon, who was formerly group finance director of Blue Circle Industries plc, has such
financial experience.
The Governance Committee, chaired by Mr C M Allen-Jones, keeps under review corporate governance issues relating to the
company and is responsible for the monitoring and review of 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 which are likely to, or could appear 
to, affect his judgement. Where it concludes that such criteria are not satisfied with regard to any director, it may make such
recommendations to the board as it may think fit, including that the director abstains from participating in any decision of the board 
or any of its committees on the matter concerned. Caledonia Investments plc
Annual report 2004 44
Corporate governance report
continued
Attendance at meetings
The following table identifies the number of board and committee meetings held in the year to 31 March 2004 and the attendance
record of individual directors.
Nomination Remuneration Audit Governance
Board Committee Committee Committee Committee
1
Number of meetings in the year 11
2
2522
Attendances by
P N Buckley 11 2 – – –
J R H Loudon 10 2 5 2 –
T C W Ingram 11––––
J H Cartwright 11––––
The Hon C W Cayzer 11––––
J M May 6
3
––––
C M Allen-Jones 11 2522
M E T Davies 10 2 5 – 2
Sir David Kinloch 10––––
D G F Thompson 11 2 – 1 2
M G Wyatt 11––––
1. Established on 12 November 2003.
2. Scheduled board meetings.
3. Appointed on 1 September 2003 and therefore could have attended a maximum of seven scheduled board meetings.
Board evaluation
Since the year end, procedures for the annual evaluation of the effectiveness of the board and its committees and of the performance
of individual directors have been implemented. The evaluation of the board as a whole and of its committees is led by the chairman 
and conducted by seeking individual board member’s responses to a preset list of questions. The evaluation of the performance of 
the chairman is led by the senior independent non-executive director and involves discussion with other members of the board of 
their views on his performance. The evaluation of the performance of the chief executive is undertaken by the chairman and the non-
executive directors. The performance of the non-executive directors is reviewed by the chairman, the chief executive and the senior
independent non-executive director, with the senior independent non-executive director absent in respect of his own performance
appraisal. The performance of the executive directors, other than the chief executive, is undertaken by the Remuneration Committee
as part of the annual salary review process.
The results of the evaluation of the board as a whole and of its committees for the year ended 31 March 2004 were presented in 
a report to the Nomination Committee and the board. The Nomination Committee reviewed the size, structure and composition of 
the board in the light of this report. Caledonia Investments plc
Annual report 2004 45
Internal control
The board has overall responsibility for the group’s system of internal control, although the review of internal financial controls is
delegated to the Audit Committee. The group’s system of internal control is designed to manage, rather than eliminate, risk. It is
recognised that such a system can only provide reasonable, but not absolute, assurance against material misstatement or loss. The
board confirms that the system of internal control operated by the group accords with the guidance issued in September 1999 by the
Institute of Chartered Accountants of England and Wales (the Turnbull Committee guidelines) and has been in place throughout the
year and up to the date of approval of these accounts.
Major business risks facing group companies, including social, ethical and environmental issues, are identified in conjunction with
operating management and procedures agreed to control these as appropriate. Risks facing the group’s material investments are
identified and evaluated through board representation or regular contact.
Key risks identified are regularly monitored at group level by members of the executive management committee, who have clear
mandates to assess and report on risk in their particular areas of responsibility. From these assessments, an ongoing risk profile of 
the group’s activities is updated half-yearly and reviewed by the board. The board is also provided quarterly with a list of the key risk
issues identified by executive management at that particular time. All of the company’s larger investments are reviewed at least
annually by the board and the smaller portfolio holdings reviewed at least annually by an executive investment committee.
Specific control procedures are in place to ensure that the company continually monitors and complies with the requirements for
investment trust status. The board receives monthly compliance reports evidencing that the company is meeting the various tests for
investment trust status and also confirming that the investment activities undertaken by executive management are within the overall
policy limits set by the board. A compliance committee comprising the company secretary (chairman), the finance director and three
associate directors has been established, which meets weekly to review the company’s investment trust status and to monitor and
approve all investment activity from an investment trust compliance perspective. The group financial controller also attends such
meetings.
Financial performance is continuously measured by comparing total shareholder returns and net asset value movements against the
FTSE All-Share index. Performance statistics are reported monthly to the board. Income and expenses are monitored by the board
against an approved annual budget and regularly updated forecasts. Valuations of unquoted investments are subject to a rigorous 
six monthly review process undertaken by a challenge committee independent of the investment executives and observed by the
external auditors.
Since the year end, the directors have conducted their annual review of the operation and effectiveness of the group’s system 
of internal control.
Going concern
The directors confirm that they are satisfied that the group has adequate resources to continue in business for the foreseeable future.
For this reason, they continue to adopt the going concern basis in preparing the accounts.
Relations with shareholders
The company welcomes dialogue with institutional shareholders in order to achieve a mutual understanding of objectives. The 
chief executive and the finance director seek meetings with larger institutional shareholders and private client stockbrokers after the
announcement of year end and interim results. The annual general meeting also provides a forum for investors to meet the directors,
both formally and informally.
The chairmen of the Audit and Remuneration Committees will be available to answer questions at the annual general meeting 
of the company. Caledonia Investments plc
Annual report 2004 46
Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state
of affairs of the company and of the group as at the end of the financial year and of the profit or loss for that period. In preparing those
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 applicable accounting standards have been followed, subject to any material departures disclosed and explained 
in the financial statements
 prepare the financial statements on a going concern basis unless it is inappropriate to assume that the group will continue 
in business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the company and to enable them to ensure that the accounts comply with the Companies Act 1985. They have 
a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent 
and detect fraud and other irregularities.
Directors’ responsibilities statement Caledonia Investments plc
Annual report 2004 47
Independent auditors’ report
to the members of Caledonia Investments plc
We have audited the financial statements on pages 48 to 74. We have also audited the information in the directors’ remuneration
report that is described as having been audited.
This report is made solely to the company’s members, as a body, in accordance with section 235 of the Companies Act 1985. Our
audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them 
in an auditor’s report and for no other purpose. T o the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the annual report and the directors’ remuneration report. As described on page 46, this
includes responsibility for preparing the financial statements in accordance with applicable United Kingdom law and accounting
standards. Our responsibilities, as independent auditors, are established in the United Kingdom by statute, the Auditing Practices
Board, the Listing Rules of the Financial Services Authority, and by our profession’s ethical guidance.
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and
the parts of the directors’ remuneration report to be audited have been properly prepared in accordance with the Companies Act 1985.
We also report to you if, in our opinion, the directors’ report is not consistent with the financial statements, if the company has not
kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information
specified by law regarding directors’ remuneration and transactions with the group is not disclosed.
We review whether the statement on page 42 reflects the company’s compliance with the seven provisions of the Combined Code
specified for our review by the Listing Rules, and we report if it does not. We are not required to consider whether the board’s
statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the group’s corporate
governance procedures or its risk and control procedures.
We read the other information contained in the annual report, including the corporate governance report and the unaudited part of the
directors’ remuneration report, and consider whether it is consistent with the audited financial statements. We consider the implications
for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. 
Basis of audit opinion
We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination,
on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the part of the directors’
remuneration report to be audited. It also includes an assessment of the significant estimates and judgements made by the directors
in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group’s circumstances,
consistently applied and adequately disclosed. 
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order 
to provide us with sufficient evidence to give reasonable assurance that the financial statements and the parts of the directors’
remuneration report to be audited are free from material misstatement, whether caused by fraud or other irregularity or error. In
forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements and the
parts of the directors’ remuneration report to be audited.
Opinion
In our opinion:
 the financial statements give a true and fair view of the state of affairs of the company and the group as at 31 March 2004 
and of the profit of the group for the year then ended; and
 the financial statements and the parts of the directors’ remuneration report to be audited have been properly prepared in
accordance with the Companies Act 1985.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
London
19 May 2004 Caledonia Investments plc
Annual report 2004 48
Company statement of total return
at 31 March 2004
Pro forma Pro forma Pro forma
Revenue Capital Total Revenue Capital Total
2004 2004 2004 2003 2003 2003
Note £m £m £m £m £m £m
Gains/(losses) on investments
Realised – 20.1 20.1 – 17.1 17.1
Unrealised – 254.2 254.2 – (221.8) (221.8)
– 274.3 274.3 – (204.7) (204.7)
Income 01 21.5 – 21.5 20.0 – 20.0
Administrative expenses 02 (9.1) – (9.1) (8.3) – (8.3)
Costs of liquidation and settlement proposals 05 (2.5) – (2.5) –––
Restructuring costs 05––– (4.0) – (4.0)
Return before finance costs and tax 9.9 274.3 284.2 7.7 (204.7) (197.0)
Interest payable 07 (1.0) – (1.0) (0.2) – (0.2)
Return before tax 8.9 274.3 283.2 7.5 (204.7) (197.2)
Tax on ordinary activities 08 – (0.4) (0.4) 1.5 12.5 14.0
Return attributable to shareholders 8.9 273.9 282.8 9.0 (192.2) (183.2)
Return per ordinary share 10
Basic 12.3p 379.2p 391.5p 12.5p -266.5p -254.0p
Diluted 12.3p 378.4p 390.7p 12.5p -266.5p -254.0p
Company reconciliation of movement in shareholders’ funds
2004 2003
Note £m £m
Revenue return 8.9 9.0
Capital return 273.9 (192.2)
T otal return 282.8 (183.2)
Dividends 09 (19.4) (18.8)
Purchase of own shares – (3.4)
Movement in the year 263.4 (205.4)
Opening balance 651.2 856.6
Closing balance 914.6 651.2
Dividends per ordinary share 09 27.0p 26.0p
The accounting policies and notes on pages 53 to 74 form part of these financial statements. Caledonia Investments plc
Annual report 2004 49
Company balance sheet
at 31 March 2004
2004 2003
Note £m £m
Fixed assets
Investments 13 896.9 656.4
Current assets
Debtors 15 12.4 5.5
Short term deposits 32.8 38.9
Cash at bank and in hand 6.0 1.4
51.2 45.8
Creditors falling due within one year
Short term borrowings 16 – (8.6)
Other creditors 17 (18.5) (28.1)
(18.5) (36.7)
Net current assets 32.7 9.1
T otal assets less current liabilities 929.6 665.5
Creditors falling due after more than one year
Long term borrowings 16 (4.8) (4.8)
Amounts due to subsidiary undertaking (10.2) (9.5)
(15.0) (14.3)
Net assets 914.6 651.2
Capital and reserves
Called up share capital 20 4.0 4.0
Share premium account 20 1.3 1.3
Non-distributable reserves 21 458.0 184.1
Distributable reserves 21 451.3 461.8
T otal shareholders’ funds 914.6 651.2
Net asset value per ordinary share 22
After accrued final dividend 1260p 897p
Before accrued final dividend 1278p 915p
The financial statements on pages 48 to 74 were approved by the board on 19 May 2004 and were signed on its behalf by:
Tim Ingram Jonathan Cartwright
Chief executive Finance director
The accounting policies and notes on pages 53 to 74 form part of these financial statements. Caledonia Investments plc
Annual report 2004 50
2004 2003
Note £m £m
Turnover 125.8 132.1
Operating loss 03 (11.5) (9.4)
Share of operating profit of associates – 26.1
Amortisation of goodwill on acquisition of associates – (0.4)
T otal operating loss (11.5) 16.3
Profit on sale of operations 06 – 4.9
Loss on ordinary activities before investment income (11.5) 21.2
Income from investments 01 17.3 8.7
Interest receivable 01 1.1 3.2
Interest payable 07 (0.8) (9.5)
Profit on ordinary activities before tax 6.1 23.6
Tax on profit on ordinary activities 08 (2.2) (5.7)
Profit on ordinary activities after tax 3.9 17.9
Minority interests (equity) (0.1) (0.4)
Profit for the financial year 3.8 17.5
Dividends 09 (19.4) (18.8)
Loss charged for the financial year 21 (15.6) (1.3)
Earnings per ordinary share 10
Basic 5.3p 24.2p
Diluted 5.3p 24.2p
Dividends per ordinary share 09 27.0p 26.0p
Consolidated statement of total
recognised gains and losses
for the year ended 31 March 2004
2004 2003
Note £m £m
Gains/(losses) on investments
Realised 21.3 17.1
Unrealised 270.4 (75.7)
Revaluation of former associates transferred to investments (21.3) –
Exchange differences (3.7) (15.9)
Share of results of associates – (13.7)
Tax on sales of investments 08 (0.4) 8.5
Minority interests (equity) (0.1) 0.1
Other recognised gains and losses 266.2 (79.6)
Profit for the financial year 3.8 17.5
T otal recognised gains and losses 270.0 (62.1)
The accounting policies and notes on pages 53 to 74 form part of these financial statements.
Consolidated profit and loss account
for the year ended 31 March 2004 Caledonia Investments plc
Annual report 2004 51
Consolidated balance sheet
at 31 March 2004
2004 2003
Note £m £m
Fixed assets
Intangible assets 11 4.9 5.3
Tangible assets 12 84.1 59.4
Investments in associates 13 – 288.5
Investments other 13 834.9 255.5
923.9 608.7
Current assets
Stocks 14 26.4 20.4
Debtors 15 36.6 32.7
Short term deposits 40.2 43.9
Cash at bank and in hand 14.6 4.6
117.8 101.6
Creditors falling due within one year
Short term borrowings 16 (4.3) (0.4)
Other creditors 17 (50.0) (47.2)
(54.3) (47.6)
Net current assets 63.5 54.0
T otal assets less current liabilities 987.4 662.7
Creditors falling due after more than one year
Long term borrowings 16 (42.3) (4.9)
Provision for liabilities and charges
Deferred taxation 18 (1.5) (1.4)
943.6 656.4
Minority interests
Equity (0.8) (0.6)
Non-equity (0.3) (0.3)
942.5 655.5
Capital and reserves
Called up share capital 20 4.0 4.0
Share premium account 20 1.3 1.3
Capital redemption reserve 21 1.2 1.2
Revaluation reserve 21 270.7 21.2
Profit and loss account 21 665.3 627.8
T otal shareholders’ funds 942.5 655.5
The financial statements on pages 48 to 74 were approved by the board on 19 May 2004 and were signed on its behalf by:
Tim Ingram Jonathan Cartwright
Chief executive Finance director
The accounting policies and notes on pages 53 to 74 form part of these financial statements. Caledonia Investments plc
Annual report 2004 52
Company Group
2004 2003 2004 2003
Note £m £m £m £m
Net cash inflow from operating activities 25 3.1 34.5 (0.2) 12.4
Dividends from associates – – – 9.2
Servicing of finance
Interest paid (1.0) (5.3) (0.7) (0.2)
Dividends paid to minority shareholders – – (0.1) (0.2)
(1.0) (5.3) (0.8) (0.4)
Taxation
UK tax paid (1.3) (1.8) (1.3) (5.8)
Overseas tax paid – – (0.5) (0.8)
(1.3) (1.8) (1.8) (6.6)
Capital expenditure and financial investment
Purchase of investments (107.3) (27.3) (96.7) (47.7)
Sale of investments 125.8 2.6 109.2 35.4
Liquidation of subsidiary undertakings 6.9 15.9 – –
Purchase of tangible fixed assets – – (6.6) (3.3)
Sale of tangible fixed assets – – 0.4 0.3
25.4 (8.8) 6.3 (15.3)
Acquisitions and disposals
Purchase of subsidiary undertakings – – (9.2) (0.2)
Cash acquired with subsidiary undertakings – – 0.6 –
Sale of subsidiary undertakings – – – 7.0
Acquisition of associated undertakings – – – (12.4)
Sale of associated undertakings – – – 1.1
– – (8.6) (4.5)
Equity dividends paid (19.1) (18.1) (19.1) (18.1)
Net cash inflow before management of liquid resources and financing 7.1 0.5 (24.2) (23.3)
Management of liquid resources 26 6.1 18.0 3.7 21.5
Financing
Repayment of short term loans – – (0.3) –
Repayment of long term loans – – – (0.4)
Issue of long term loans – – 27.4 –
Purchase of own shares – (3.4) – (3.4)
Issue of shares by subsidiary undertakings – – 0.1 0.3
– (3.4) 27.2 (3.5)
Increase in cash in the year 13.2 15.1 6.7 (5.3)
Reconciliation of net cash flows to movement in net funds
Company Group
2004 2003 2004 2003
Note £m £m £m £m
Increase in cash in the year 13.2 15.1 6.7 (5.3)
Cash inflow from increase in debt – – (27.1) 0.4
Cash inflow from decrease in deposits (6.1) (18.0) (3.7) (21.5)
Change in net funds resulting from cash flows 27 7.1 (2.9) (24.1) (26.4)
Acquisitions – – (10.4) 4.6
Exchange differences – – (0.5) (2.1)
Movement in net funds in the year 7.1 (2.9) (35.0) (23.9)
Opening balance of net funds 26.9 29.8 43.2 67.1
Closing balance of net funds 34.0 26.9 8.2 43.2
The accounting policies and notes on pages 53 to 74 form part of these financial statements.
Company and consolidated cash flows
for the year ended 31 March 2004 Caledonia Investments plc
Annual report 2004 53
Accounting policies
Basis of preparation
The accounts have been prepared under the historical cost convention, modified to include the revaluation of investments, and 
in accordance with applicable accounting standards.
Investment trust companies generally report under the Statement of Recommended Practice – Financial Statements of Investment
Trust Companies (‘IT SORP’), dated January 2003 and published by the Association of Investment Trust Companies. The IT SORP
assumes, however, that an investment trust is also an investment company and can take advantage of the special provisions given 
to investment companies under company law and accounting standards. Caledonia is not an investment company and, in these
circumstances, the IT SORP states that an investment trust company should prepare its financial statements in accordance with the
normal rules contained in Schedule 4 to the Companies Act 1985 and accounting standards.
Caledonia recognises, however, that presenting information that is comparable with other investment trusts is important to investors.
It therefore augments its financial statements with the information and disclosures required by the IT SORP in respect of the
performance of the holding company. This is because the holding company balance sheet (unlike that of the group) can reflect full 
net asset value, and the movement in this figure is a key measure of Caledonia’s performance. A statement of total return on an 
IT SORP basis is also presented to explain this movement.
The company converted to an investment trust company on 1 April 2003. The comparative figures in the company’s statement of 
total return have been prepared on a pro forma basis to reflect the estimated results of the company had it been an investment trust
company throughout the previous year. These are derived from a combination of the company profit and loss account and the
company statement of total recognised gains and losses, adjusted to reflect the estimated position if the company had been an
investment trust company throughout the previous year. In particular, investments that were held by subsidiary undertakings for most
of the year and transferred to the company before the year end (or would have been so transferred if they had not been realised during
the year) are imputed to the company for the whole of the previous year (or up to the date of sale). Therefore, any investment income
arising from those investments and movements in valuation have been imputed to the company. Likewise, any costs incurred by
subsidiary investment holding companies, which were no longer operating as such at the previous year end, have been imputed to the
company. The effect of the reorganisation carried out during the previous year in order to enable the company to achieve investment
trust status has been eliminated, except for the net costs associated with undertaking the reorganisation.
On its conversion to an investment trust company on 1 April 2003, the company reviewed the treatment of investments over which it
had significant influence or joint control. Only those entities through which the group carried out its own business were regarded as
associated undertakings or joint ventures. Where investments were held as part of a portfolio, the value of which was through their
marketable value as part of a basket of investments, they were not regarded as associated undertakings or joint ventures, but were
stated in accordance with all other investments at valuation. On 1 April 2003, therefore, former associated undertakings that were 
no longer regarded as associated undertakings were transferred to other investments, based on the share of net assets retained,
including any related goodwill, and revalued to market value at that date.
Basis of consolidation
The consolidated financial statements consolidate the results of the company and all of its subsidiary undertakings drawn up to 
31 March each year. The results of subsidiary undertakings acquired or sold during the year are included in the financial statements
from the date of acquisition or to the date of sale. As permitted by section 230 of the Companies Act 1985, the profit and loss account
of the company has not been included in these financial statements.
In the company financial statements, investments in subsidiary undertakings are stated in accordance with the ‘valuation of
investments’ and ‘income’ policies outlined below. Subsidiary undertakings include equity and loan interest elements.
Joint ventures and associated undertakings
Entities through which the group carries out its own business, in which the holdings are intended to be held for the long term and 
over whose operating and financial policies it exerts significant influence, are treated as joint ventures or associated undertakings 
and accounted for using the gross equity method or equity method as appropriate.
Investments in which the group has a long term interest and over whose operating and financial policies it exerts significant influence,
but which are held as part of an investment portfolio, the value of which is through their marketable value as part of a basket of
investments, are not regarded as joint ventures or associated undertakings. The directors believe that equity accounting for such
investments, that may come within the Companies Act definition of associated undertakings, would not give a true and fair view 
of the income from investment activities of the group, since this is better measured by the inclusion of dividends and interest income.
It is impracticable to quantify the effects of this departure. The treatment adopted is in accordance with FRS 9: Associates and 
Joint Ventures. Caledonia Investments plc
Annual report 2004 54
Valuation of investments
Investments are included according to the following guidelines, which have been drawn up having regard to the British Venture 
Capital Association (‘BVCA’) guidelines.
Quoted investments, for which an active market exists, are valued at mid-market price.
Unquoted equity investments are valued by the directors on a number of bases depending on the nature of each investment. 
Early-stage investments will generally be valued at cost, less a provision if performance is substantially below expectations, for one
year or until the investment starts to earn significant maintainable profits. Investments earning significant maintainable profits are
generally valued using an earnings multiple, based on current year profit after tax and an earnings multiple for a comparable quoted
company or sector average. A discount will be applied to recognise the absence of a ready market on which the holding can be sold.
The liquidity discount will normally be 30%, but may be reduced to 10% if an initial public offering or realisation is imminent. For 
some asset-backed businesses, such as where there is a significant property element, the earnings multiple method of valuation is
inappropriate, and a net realisable asset basis is applied. It may also be appropriate to use the net realisable asset basis of valuation 
if this results in a higher valuation than the earnings method, or the company is incurring losses. A third party valuation, such as an
independent valuation report or a material arm’s length transaction, will provide prima facie evidence of fair value and will usually take
precedence over other methods.
Unquoted fixed income shares and loan investments are valued at the lower of cost or recoverable amount. Investments in unquoted
funds are valued at the net asset value of the fund, with an appropriate adjustment where the net asset value has not been calculated
in accordance with BVCA guidelines.
Realised surpluses or deficits on the disposal of investments are taken to the realised capital reserve of the company, and unrealised
surpluses and deficits on the revaluation of investments are taken to the unrealised capital reserve as explained further below.
Income
Dividends receivable from equity shares are brought into account on the ex-dividend date or, where no ex-dividend date is quoted,
when the company’s right to receive payment is established. Fixed returns on non-equity shares and debt securities are recognised
on a time apportionment basis so as to reflect the effective yield on the shares and debt securities. Other returns are recognised when
the right to the return is established.
Expenses
Expenses are accounted for on an accruals basis and are charged to the revenue account except that expenses which are incidental
to the acquisition or disposal of an investment are included within the cost of the investment or deducted from the disposal proceeds
of the investment.
Taxation
The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences
between the treatment of certain items for accounting and taxation purposes. Any charge for taxation on the disposal of investments
is dealt with in the capital reserve.
Deferred taxation is recognised in respect of all timing differences between the treatment of certain items for taxation and accounting
purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS 19. In particular, FRS 19
does not allow deferred tax to be provided in respect of investment revaluations. No discounting is applied.
Foreign currency
In the company financial statements, transactions denominated in foreign currencies are recorded in the local currency at actual
exchange rates as at the date of the transaction or, where appropriate, at the rate of exchange in a related forward exchange contract.
Monetary assets and liabilities denominated in foreign currencies at the year end are reported at the rates of exchange prevailing 
at the year end or, where appropriate, at the rate of exchange in a related forward exchange contact. Any gain or loss arising from 
a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in capital reserve or 
in the revenue account depending on whether the gain or loss is of a capital or revenue nature respectively.
In the consolidated financial statements, assets, liabilities and results of subsidiaries accounting in foreign currencies are translated
into sterling at the rates of exchange ruling at the balance sheet date. The exchange differences arising on retranslating opening net
assets are taken directly to reserves. All other translation differences are taken to the profit and loss account, with the exception of
differences on the revaluation of fixed asset investments denominated in foreign currencies, which are taken directly to reserves.
Accounting policies
continued Caledonia Investments plc
Annual report 2004 55
Capital reserves
The following are accounted for in the realised capital reserve of the company:
– gains and losses on the realisation of investments
– realised exchange differences of a capital nature
– expenses and finance costs, together with the related taxation effect, charged to this reserve in accordance with the above policies
– realised gains and losses on transactions undertaken to hedge an exposure of a capital nature.
The following are accounted for in the unrealised capital reserve of the company:
– increases and decreases in the valuation of investments held at the year end
– unrealised exchange differences of a capital nature
– unrealised gains and losses on transactions undertaken to hedge an exposure of a capital nature.
Goodwill
Goodwill arising on acquisitions is capitalised and amortised over its estimated useful economic life. Negative goodwill arising on
acquisitions is capitalised and written back through the profit and loss account in the period in which the non-monetary assets
acquired are recovered.
Up to 31 March 1998, depending on the circumstances of each acquisition, goodwill arising on acquisitions was either set off directly
against reserves or amortised through the profit and loss account over the directors’ estimate of its useful life. Goodwill previously
eliminated against reserves was not reinstated on implementation of FRS 10.
Depreciation
Depreciation is provided on all tangible fixed assets, other than freehold land and assets in the course of construction, at rates
calculated to write off the cost less estimated residual value of each asset evenly over its expected useful life, as follows:
Freehold and leasehold properties 50 years or the period of lease if shorter
Plant and machinery 5 to 25 years
Fixtures, fittings and equipment 3 to 10 years
Stocks
Stocks are stated at the lower of cost and net realisable value. Cost is determined on a first-in, first-out basis and includes production
overheads as appropriate. Net realisable value is the estimated price at which stocks could be sold in the normal course of business,
after allowing for all further costs of completion and sale.
Payments received on account are deducted from work in progress. Where such receipts exceed the valuation, the excess is taken 
to creditors.
Leases
Rentals payable and receivable under operating leases are charged or credited to the profit and loss account on a straight line basis
over the terms of the leases.
Pensions
The group principally operates defined benefits pension schemes in the UK and USA. Contributions to the schemes are charged 
to the profit and loss account so as to spread the cost of pensions over the working lives of the employees within the schemes. 
In addition, contributions are made to grouped personal pension plans and other arrangements, which are charged to the profit and
loss account when payable. The transition rules of FRS 17 have been applied in drawing up these financial statements.
Long term contracts
Profit on long term contracts is taken as the work is carried out if the final outcome can be assessed with reasonable certainty. The
profit is calculated on a prudent basis to reflect the proportion of the work completed at the year end and full provision is made for 
all foreseeable losses.
Turnover
Turnover represents the amounts derived from the provision of goods and services which fall within the group’s ordinary activities,
stated net of value added tax. Caledonia Investments plc
Annual report 2004 56
Notes to the financial statements
01 Income
Company Group
Pro forma
2004 2003 2004 2003
£m £m £m £m
Income from investments
UK listed investments
Dividends 11.9 13.1 12.1 5.9
Overseas listed investments
Interest 0.2 0.4 0.2 0.4
Unlisted investments
Dividends 1.6 0.7 2.8 0.5
Interest 1.1 0.9 1.2 0.9
Other 0.3 0.5 0.3 0.5
Income from group undertakings
Dividends 3.7 1.2 – –
Interest 1.0 1.0 – –
Private equity partnerships 0.7 0.5 0.7 0.5
20.5 18.3 17.3 8.7
Interest income
Interest on bank deposits 0.9 1.7 1.0 2.6
Exchange gains 0.1 – 0.1 0.6
1.0 1.7 1.1 3.2
T otal income 21.5 20.0 18.4 11.9
02 Administrative expenses
Company
Pro forma
2004 2003
£m £m
Management charge from Caledonia Group Services
Staff costs (note 4) 5.5 4.5
Other administrative expenses 2.5 3.3
Depreciation 0.3 0.3
8.3 8.1
Irrecoverable VAT 0.6 –
Other 0.2 0.2
9.1 8.3
Caledonia Group Services, a wholly owned subsidiary undertaking, provided management services to the company. Caledonia Investments plc
Annual report 2004 57
03 Operating loss
Group
2004 2003
£m £m
Turnover 125.8 132.1
Changes in stocks and in work in progress (14.9) (0.4)
Other operating income 2.2 2.0
Raw materials (41.4) (32.5)
Staff costs (42.2) (42.8)
Depreciation and amortisation (7.4) (7.1)
Other operating charges before exceptional items (31.1) (56.7)
Exceptional items (note 5) (2.5) (4.0)
Operating loss (11.5) (9.4)
Results for both the current and prior years are from continuing operations. There were no material acquisitions or discontinued
operations during the year.
Operating loss was stated after charging/(crediting) the following: 
Group
2004 2003
£m £m
Auditors’ remuneration
Audit services 0.4 0.4
Non-audit services
Taxation 0.1 –
Due diligence 0.2 0.2
Other 0.1 0.1
Depreciation of owned assets 5.6 5.1
Amortisation and impairment of goodwill 1.8 2.0
Operating lease rentals
Plant and machinery 0.6 0.3
Other (mainly properties) 0.7 0.8
Exchange losses 0.5 –
Net rental income from land (0.1) (0.2)
Exchange gains – (0.6)
04 Staff costs
Company Group
Pro forma
2004 2003 2004 2003
£m £m £m £m
Wages and salaries 4.4 3.6 34.8 36.2
Social security costs 0.7 0.4 4.9 4.6
Other pension costs 0.4 0.5 2.5 2.0
5.5 4.5 42.2 42.8
Average number of employees (including executive directors) 41 39 1,582 1,720
The staff costs shown for the company represent those costs incurred by Caledonia Group Services and charged to the company.
The above figures include director’s emoluments, details of which are shown in the directors’ remuneration report on page 37. Caledonia Investments plc
Annual report 2004 58
Notes to the financial statements
continued
05 Exceptional items
The exceptional item in 2004 comprised £2.5m of costs relating to the review of a proposal to liquidate the company, which was
subsequently withdrawn, and the formulation of proposals for the return of funds to shareholders. This is described in more detail 
in note 34 – Post balance sheet events
The exceptional item in 2003 comprised £4.0m of costs associated with the restructuring of the group undertaken during the year 
in order for Caledonia to achieve investment trust status as from 1 April 2003.
06 Profit on sale of operations
Group
2004 2003
£m £m
Group profit on sale of operations – 6.3
Provision against loans to associates – (1.4)
– 4.9
07 Interest payable
Company Group
Pro forma
2004 2003 2004 2003
£m £m £m £m
Bank loans and overdrafts – – 0.6 –
Loan notes 0.2 0.2 0.2 0.2
Subsidiary undertakings 0.8 – – –
Share of associates’ interest payable – – – 9.3
1.0 0.2 0.8 9.5
08 Taxation 
Company
Pro forma Pro forma Pro forma
Revenue Capital Total Revenue Capital Total
2004 2004 2004 2003 2003 2003
£m £m £m £m £m £m
UK corporation tax
Current tax on profits of the period (1.3) 0.6 (0.7) (1.5) (0.1) (1.6)
Restructuring costs relating to conversion– – – – 5.5 5.5
Adjustments in respect of previous periods 1.3 (0.2) 1.1 –––
– 0.4 0.4 (1.5) 5.4 3.9
Deferred tax
Release of provision against unrealised losses – – – – (17.9) (17.9)
Tax on profit on ordinary activities – 0.4 0.4 (1.5) (12.5) (14.0) Caledonia Investments plc
Annual report 2004 59
08 Taxation (continued)
Group
Profit and Other gains Profit and Other gains
loss account and losses T otal loss account and losses T otal
2004 2004 2004 2003 2003 2003
£m £m £m £m £m £m
UK corporation tax
Current tax on profits of the period 0.3 0.6 0.9 2.1 3.9 6.0
Restructuring costs relating to conversion – – – – 5.5 5.5
Adjustments in respect of previous periods 1.2 (0.2) 1.0 (0.4) – (0.4)
1.5 0.4 1.9 1.7 9.4 11.1
Foreign tax
Current tax on profits of the period 0.6 – 0.6 0.6 – 0.6
Adjustments in respect of previous periods – – – (0.1) – (0.1)
0.6 – 0.6 0.5 – 0.5
T otal current tax 2.1 0.4 2.5 2.2 9.4 11.6
Deferred tax
Origination and reversal of timing differences 0.1 – 0.1 (1.0) – (1.0)
Release of provision against unrealised losses – – – – (17.9) (17.9)
0.1 – 0.1 (1.0) (17.9) (18.9)
2.2 0.4 2.6 1.2 (8.5) (7.3)
Share of associates’ taxation – – – 4.5 – 4.5
Tax on profit on ordinary activities 2.2 0.4 2.6 5.7 (8.5) (2.8)
Factors affecting the revenue tax charge for the period
The tax assessed for the period is lower than the standard rate of corporation tax in the UK of 30%. The difference is explained 
as follows:
Company Group
Pro forma
2004 2003 2004 2003
£m £m £m £m
Profit on ordinary activities before taxation 8.9 7.5 6.1 23.6
Profit on ordinary activities at the standard rate of 
corporation tax in the UK of 30% (2003 – 30%) 2.7 2.2 1.8 7.1
Effects of
Expenses not deductible for tax purposes 0.1 1.2 0.6 1.3
Utilisation of tax losses – – (0.1) (0.1)
Higher tax rates on overseas earnings – – 0.1 0.3
Allocation of group relief at a reduced rate 0.2 – – –
Other timing differences – – (0.1) 0.1
Losses for the year unrelieved 0.7 – 2.0 0.3
Non-allowable depreciation and amortisation – – 0.8 1.0
Non-taxable proportion of capital gains and losses – – – (1.3)
Non-taxable UK dividend income (5.0) (4.9) (4.2) (1.5)
Adjustments in respect of previous periods 1.3 – 1.2 (0.5)
Share of profits before tax of associates – – – (4.5)
Current tax charge for the year – (1.5) 2.1 2.2
Factors that may affect future tax charges
No unprovided deferred tax has been disclosed for 2004 (2003 – £nil) as the company expects to be able to conduct its affairs so 
as to meet the requirements for investment trust status, thereby not being liable to tax on capital gains. Deferred tax on revaluations 
is not permitted, in accordance with FRS 19.
Exceptional items
The tax effect in the profit and loss account relating to the exceptional items, described in note 5, was a credit of £0.3m (2003 – £nil). Caledonia Investments plc
Annual report 2004 60
Notes to the financial statements
continued
09 Dividends
2004 2003 2004 2003
pence pence £m £m
Interim paid 8.4 8.0 6.0 5.7
Final proposed 18.6 18.0 13.4 13.1
27.0 26.0 19.4 18.8
The proposed final dividend will be paid on 29 July 2004 to shareholders on the register at the close of business on 25 June 2004.
10 Returns per ordinary share
The calculation of returns per ordinary share was based on the following:
Company Group
Pro forma
2004 2003 2004 2003
£m £m £m £m
Revenue return 8.9 9.0 3.8 17.5
Capital return 273.9 (192.2)
Net assets (after final dividend accrual) 914.6 651.2
Net assets (before final dividend accrual) 928.0 664.3
‘000 ‘000 ‘000 ‘000
Weighted average number of ordinary shares
Basic 72,235 72,134 72,235 72,134
Diluted 72,379 72,144 72,379 72,144
The weighted average number of ordinary shares in issue during the year excluded shares held during the year by the Caledonia
Investments plc Employee Share Trust.
The difference between the basic and diluted number of ordinary shares was the potential dilutive effect of share options.
11 Intangible fixed assets
Group
Purchased
goodwill
£m
Opening balance 5.3
Exchange differences (0.5)
Acquisition of operations (note 13) 1.9
Charge for the year (0.4)
Provision for impairment (1.4)
Closing balance 4.9
Goodwill arising on acquisitions is being amortised evenly over the directors’ estimate of its useful economic life of 20 years. Caledonia Investments plc
Annual report 2004 61
12 Tangible fixed assets
Group
Fixtures,
Land and Plant and fittings and
buildings machinery equipment Total
£m £m £m £m
Cost
Opening balance 55.8 18.4 11.2 85.4
Exchange differences (0.6) (0.6) (0.3) (1.5)
Additions 1.8 2.3 2.7 6.8
Disposals (0.1) (0.4) (0.6) (1.1)
Acquisition of operations 23.1 0.9 0.5 24.5
Closing balance 80.0 20.6 13.5 114.1
Depreciation
Opening balance 8.5 10.0 7.5 26.0
Exchange differences (0.2) (0.4) (0.2) (0.8)
Charge for the year 2.0 2.1 1.5 5.6
Disposals – (0.3) (0.5) (0.8)
Closing balance 10.3 11.4 8.3 30.0
Net book value
Closing balance 69.7 9.2 5.2 84.1
Opening balance 47.3 8.4 3.7 59.4
The net book value of land and buildings was as follows:
2004 2003
£m £m
Freehold 53.2 30.4
Long leasehold 15.0 15.3
Short leasehold 1.5 1.6
69.7 47.3
13 Investments
Company
Subsidiary Participating UK listed Other listed Other Own
undertakings interests investments investments investments shares Total
£m £m £m £m £m £m £m
Opening cost 122.8 281.0 126.9 21.6 83.8 4.2 640.3
Opening unrealised gains 19.2 12.2 (14.8) (0.8) 1.0 (0.7) 16.1
Opening valuation 142.0 293.2 112.1 20.8 84.8 3.5 654.4
Restatement of cost 30.4 (132.4) (15.4) 23.3 18.0 – (76.1)
Restatement of provisions (33.6) – (15.0) (26.4) (12.6) (0.3) (87.9)
Restatement of unrealised gains 2.5 134.6 30.0 7.5 (10.9) 0.3 164.8)
(0.7) 2.2 (0.4) 4.4 (5.5) – –
Transfer of former associates to investments and debtors – (295.4) 171.7 83.4 40.1 – (0.2)
Additions 10.7 – 33.3 – 63.8 0.6 108.4
Disposals
Proceeds (0.9) – (46.8) (7.8) (49.2) (0.6) (105.3)
Realised gains 0.3 – 13.4 0.4 6.0 – 20.1
Group reorganisation (39.4) – 22.5––– (16.9)
Capital distributions (20.5) ––––– (20.5)
Movement in unrealised gains (9.8) – 179.3 60.3 24.7 0.4 254.9
Closing valuation 81.7 – 485.1 161.5 164.7 3.9 896.9
Closing cost 143.5 – 199.4 80.6 162.2 4.2 589.9
Closing provision (33.6) – (15.0) (26.4) (12.6) (0.3) (87.9)
Closing unrealised gains (28.2) – 300.7 107.3 15.1 – 394.9
Closing valuation 81.7 – 485.1 161.5 164.7 3.9 896.9 Caledonia Investments plc
Annual report 2004 62
Notes to the financial statements
continued
13 Investments (continued)
The restatement of cost, provisions and unrealised gains adjust the opening position to remove the effect of intra-group transfers made
before the company became an investment trust company and to align the cost of investments in the company with the original cost to
the group.
Included in subsidiary undertakings are loans of £15.7m (2003 – £19.6m).
The group reorganisation represents the distribution of assets from the Caledonia Investments plc No 1 Settlement Trust to a subsidiary
undertaking and the liquidation of that subsidiary undertaking.
Group
Associated UK listed Other listed Other Own
undertakings investments investments investments shares Total
£m £m £m £m £m £m
Opening cost 288.5 138.2 55.7 120.1 5.6 608.1
Opening provision – (15.0) (26.4) (15.9) (1.3) (58.6)
Opening unrealised gains – 11.3 (6.2) (10.1) (0.5) (5.5)
Opening valuation 288.5 134.5 23.1 94.1 3.8 544.0
Transfer of former associates to investments (288.5) 173.4 83.5 46.7 – 15.1
Exchange differences – – (1.0) 0.3 – (0.7)
Additions – 33.3 – 63.9 0.6 97.8
Disposals
Proceeds – (46.8) (7.8) (49.2) (0.6) (104.4)
Realised gains – 13.4 0.4 7.5 – 21.3
Reclassifications – (0.3) 4.4 (3.8) – 0.3
Movement in unrealised gains – 177.9 63.4 28.8 0.1 270.2
Transfer to operations – – – (8.7) – (8.7)
Closing valuation – 485.4 166.0 179.6 3.9 834.9
Closing cost – 298.2 171.6 197.7 4.2 671.7
Closing provision – (15.0) (26.4) (12.6) (0.3) (54.3)
Closing unrealised gains – 202.2 20.8 (5.5) – 217.5
Closing valuation – 485.4 166.0 179.6 3.9 834.9
The transfer of former associates to investments, on 1 April 2003, included the write back of £36.4m of goodwill on acquisition
previously written off directly to reserves and a reduction of £21.3m to restate the carrying value of former associated undertakings 
to market value.
Own shares
The company’s investment in own shares was in respect of shares held by the trustee of the Caledonia Investments plc Employee
Share Trust. The trustee has purchased shares with money lent interest free by the company to source options exercised under the
company’s executive share option schemes and special option arrangements. If options are exercised, shares held by the trustee 
may be transferred to participating employees on receipt of the option exercise consideration. The difference between the cost at
which the shares were purchased and the average option exercise price is being written off to the profit and loss account over the
average period that the options will become exercisable. At 31 March 2004, the market value of the 524,150 shares held by the trustee
was £5.3m. Dividends on the shares held by the trustee have been waived. The outstanding loan to the trust at 31 March 2004 was
£6.4m (2003 – £5.9m). Caledonia Investments plc
Annual report 2004 63
13 Investments (continued)
Principal subsidiaries and other investments
The directors consider that to give full particulars of all subsidiaries and other investments in which the group held more than 20%
would lead to a statement of excessive length. The details given below relate only to those interests that, in the opinion of the directors,
significantly affected the profits or assets shown in these financial statements.
The following table lists subsidiary undertakings and other investments under the country of registration (or incorporation) which is also
the country of operation, except for The Edinburgh Crystal Glass Company Ltd, whose operations are in Scotland and Easybox SCA,
whose operations are in Spain and Italy:
T ype of Group
1
Name Country holding share %
1
Activity
Subsidiary undertakings
Amber Industrial Holdings PLC England Ordinary 100
1
Specialty chemicals
Preference 100
1
Caledonia Group Services Ltd England Ordinary 100
1
Management services
Easybox SCA Luxembourg 99.2
1
Self storage
The Edinburgh Crystal Glass Company Ltd England Ordinary 92.9
1
Crystal glass manufacture
Preference 100
1
Edinmore Holdings Ltd England Ordinary 100
1
Property trading
St Lawrence Properties Ltd England Ordinary 75.0
1
Property
The Sloane Club Group Ltd England Ordinary 100
1
Residential club
Sterling Industries PLC England Ordinary 100
1
Engineering
Preference 79.8
1
Other significant holdings
Close Brothers Group plc England Ordinary 17.6
1
Merchant banking
Kerzner International Ltd Bahamas Ordinary 20.2
1
Resort owner/operator
1. Held directly by the company.
Acquisitions
On 24 April 2003, the group acquired 49.6% of Easybox SCA for £7.2m. Also during the year, the Amber and Sterling groups spent
£2.0m on a number of small acquisitions. These purchases were accounted for using the acquisition method. An adjustment of £5.9m
was made to increase the book value of freehold property within Easybox SCA in order to reflect the fair value. There were no other
differences between the book values and fair values of assets acquired. The fair values, attributable to the net tangible assets on
acquisition were as follows:
Easybox Others Total
£m £m £m
Fixed assets 24.4 0.1 24.5
Stocks – 0.2 0.2
Debtors 3.5 0.2 3.7
Short term deposits 0.6 – 0.6
Creditors (1.1) (0.4) (1.5)
Long term borrowings (10.4) – (10.4)
Net assets acquired 15.0 0.1 15.1
Minority interest 0.1 – 0.1
Exchange differences (1.2) – (1.2)
Goodwill arising on acquisitions – 1.9 1.9
Consideration 15.9 2.0 17.9
The consideration was discharged by cash of £9.2m and a transfer from investments of £8.7m. Caledonia Investments plc
Annual report 2004 64
Notes to the financial statements
continued
14 Stocks
Group
2004 2003
£m £m
Raw materials and consumables 4.1 4.1
Work in progress 2.1 2.2
Finished goods and goods for resale 7.9 7.1
Property and other assets held for resale 12.3 7.0
26.4 20.4
Work in progress is shown net of payments on account of £0.6m (2003 – £0.2m).
15 Debtors
Company Group
2004 2003 2004 2003
£m £m £m £m
Trade debtors 0.5 – 21.7 18.5
Amounts owed by subsidiary undertakings 2.3 1.0 – –
Amounts owed by associate undertakings – 2.3 – 2.3
Investments sold 0.8 – 0.8 5.6
Overseas tax recoverable – – 0.3 0.4
Corporation tax recoverable 2.8 – 3.8 –
Group relief receivable 1.3 – – –
Other taxes and social security costs – 0.8 0.9 1.0
Other debtors – – 2.1 1.0
Pension prepayments – – 0.1 0.1
Other prepayments and accrued income 4.7 1.4 6.9 3.8
12.4 5.5 36.6 32.7
Included in the group’s other debtors is an amount of £1.4m (2003 – £nil) which is due after more than one year.
16 Borrowings
Company Group
2004 2003 2004 2003
£m £m £m £m
Due within one year
Bank overdrafts – 8.6 4.1 0.3
Bank loans – – 0.2 0.1
– 8.6 4.3 0.4
Due after more than one year
Bank loans – – 37.5 0.1
Variable rate unsecured loan notes 2010 4.8 4.8 4.8 4.8
4.8 4.8 42.3 4.9
T otal borrowings 4.8 13.4 46.6 5.3
Borrowings are repayable
Within one year – 8.6 4.3 0.4
Between one and two years – – 2.2 –
Between two and five years – – 35.3 0.1
After five years 4.8 4.8 4.8 4.8
4.8 13.4 46.6 5.3
The variable rate unsecured loan notes 2010 are repayable on 1 April 2010. The interest payable is 0.5% below LIBOR.
Bank loans of £36.8m (2003 – £0.2m) were secured by charges over group properties and other assets. Caledonia Investments plc
Annual report 2004 65
17 Other creditors falling due within one year
Company Group
2004 2003 2004 2003
£m £m £m £m
Contract payments on account – – 0.5 0.6
Trade creditors – – 9.0 8.3
Amounts owed to subsidiary undertakings 2.8 3.7 – –
Investments purchased 1.5 0.4 1.5 0.4
Corporation tax 0.6 5.4 10.5 6.1
Overseas tax – – 0.1 0.1
Other taxes and social security costs – – 1.1 2.3
Other creditors – 5.5 0.8 6.4
Other accruals and deferred income 0.2 – 13.1 9.9
Dividends payable 13.4 13.1 13.4 13.1
18.5 28.1 50.0 47.2
18 Deferred taxation
Company Group
2004 2003 2004 2003
£m £m £m £m
Accelerated capital allowances – – 1.4 1.3
Other timing differences – – 0.1 0.1
– – 1.5 1.4
Movement in deferred taxation
Opening balance – 27.1 1.4 29.0
Charged to the profit and loss account – – 0.1 (1.0)
Charged to other recognised gains and losses – (17.9) – (17.9)
Tax losses utilised – – – 0.5
Transfer to creditors – (9.2) – (9.2)
Closing balance – – 1.5 1.4
19 Financial instruments
An explanation of the group’s objectives, policies and strategies in using financial instruments and the risks that arise in connection
with financial instruments and how they are managed can be found on page 26.
Interest rate risk profile
The interest rate profile of the financial liabilities of the group was as follows:
Fixed rate financial liabilities
Floating rate Weighted Weighted
financial average average time
liabilities Amount interest rate rate is fixed T otal
£m £m % Years £m
2004
Sterling 45.5 0.2 13.0 3.8 45.7
US dollar – 0.7 6.8 1.6 0.7
Euro 0.1 0.1 4.8 4.8 0.2
45.6 1.0 8.0 1.8 46.6
2003
Sterling 4.9––– 4.9
Australian dollar 0.2––– 0.2
Euro 0.1 0.1 5.1 4.9 0.2
5.2 0.1 5.1 4.9 5.3 Caledonia Investments plc
Annual report 2004 66
Notes to the financial statements
continued
19 Financial instruments (continued)
The interest rate profile of the financial assets of the group was as follows:
Fixed rate financial liabilities
Floating rate Weighted Weighted No interest
financial average average time financial
assets Amount interest rate rate is fixed assets T otal
£m £m % Years £m £m
2004
Sterling 50.4 11.6 8.6 2.9 712.3 774.3
US dollar 3.0––– 88.5 91.5
Hong Kong dollar –––– 10.7 10.7
Euro 1.4––– 4.7 6.1
Canadian dollar –––– 3.1 3.1
Other –––– 4.0 4.0
54.8 11.6 8.6 2.9 823.3 889.7
2003
Sterling 1.7 50.7 4.9 1.4 194.0 246.4
US dollar 1.5 6.4 6.0 1.7 35.8 43.7
Hong Kong dollar 0.3––– 7.3 7.6
Canadian dollar –––– 4.6 4.6
Euro 1.1 0.5 2.8 1.0 – 1.6
Other 0.1–––– 0.1
4.7 57.6 5.0 1.4 241.7 304.0
The ‘no interest’ financial assets do not have a maturity date. They principally comprised equity investments.
Currency risk profile
The table below shows the group’s transactional currency exposures that gave rise to the net currency gains and losses recognised 
in the profit and loss account. These exposures comprised the monetary assets less monetary liabilities of the group that were not
denominated in the operating currency of the reporting units involved.
Net foreign currency monetary net assets
Sterling US dollar Euro Other T otal
Functional currency of group operation £m £m £m £m £m
2004
Sterling – 1.9 1.5 0.2 3.6
US dollar 1.0 – 15.6 – 16.6
1.0 1.9 17.1 0.2 20.2
2003
Sterling – 1.7 2.2 0.1 4.0
Australian dollar – 1.1 0.2 – 1.3
– 2.8 2.4 0.1 5.3
During the year, the company took out forward currency contracts to sell US$100m for sterling in December 2004 and US$50m for
sterling in January 2005 as a hedge against part of its US dollar investment in Kerzner International. At the year end, the value of the
contracts was £3.7m, which has been added to the valuation of the Kerzner International investment. Caledonia Investments plc
Annual report 2004 67
19 Financial instruments (continued)
Liquidity risk profile
The maturity profile of the group’s financial liabilities, other than short term creditors, was as follows:
2004 2003
£m £m
In one year or less or on demand 4.3 0.4
In more than two years but not more than five years 37.5 0.1
In more than five years 4.8 4.8
46.6 5.3
The group had undrawn committed facilities available at the year end in respect of which all conditions precedent had been met 
as follows:
2004 2003
£m £m
Expiring in one year or less 70.0 20.0
Expiring in more than two years but not more than five years 144.7 30.0
214.7 50.0
Fair values
The table below compares the book values and fair values of the group’s financial assets and financial liabilities:
Book values Fair values Book values Fair values
2004 2004 2003 2003
£m £m £m £m
Investments 834.9 834.9 255.5 255.5
Cash and deposits 54.8 54.8 48.5 48.5
Short term borrowings and current portion of long term borrowings (4.3) (4.3) (0.4) (0.4)
Long term borrowings (42.3) (42.3) (4.9) (4.9)
20 Share capital and premium
Share
Share premium
capital account
£m £m
Opening and closing balance 4.0 1.3
The authorised and issued and fully paid amounts of share capital were as follows:
Number Nominal value
2004 2003 2004 2003
000’s 000’s £m £m
Authorised
Ordinary shares of 5p each 121,000 121,000 6.1 6.1
Deferred ordinary shares of 5p each 8,000 8,000 0.4 0.4
6.5 6.5
Allotted, issued and fully paid
Ordinary shares of 5p each 72,613 72,613 3.6 3.6
Deferred ordinary shares of 5p each 8,000 8,000 0.4 0.4
4.0 4.0
The deferred ordinary shares carry no voting rights. The deferred ordinary shares 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. 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 shares are held by Sterling Industries PLC, a wholly owned
subsidiary undertaking of Caledonia. Caledonia Investments plc
Annual report 2004 68
20 Share capital and premium (continued)
Authority to purchase own shares
On 18 July 2003, the company obtained shareholders’ approval for the authority to purchase up to 7,260,000 of its own ordinary shares,
being approximately 10% of the ordinary share capital then in issue, at a price not more than 5% greater than the average of the middle
market quotations for such ordinary shares during the five business days preceding any such purchase. At an extraordinary general
meeting of the company convened for 11 June 2004, shareholders are being asked to revoke this authority and to approve a new
authority for the company to purchase up to 7,260,000 of its own ordinary shares, being approximately 10% of the ordinary share capital
in issue, at a price not more than 5% greater than the average of the middle market quotations for such ordinary shares during the five
business days preceding any such purchase. If approved, the authority will expire on 1 January 2006 or, if earlier, at the conclusion of
the next annual general meeting following the annual general meeting to be held on 14 July 2004.
Options
The company has share option schemes and special option arrangements under which options have been granted to certain
executives, exercisable between three and ten years from the date of grant. Options outstanding at 31 March 2004 were as follows:
Number Exercise
Date of grant of options price
19 Jul 1994 26,667 693.0p
22 Jun 1995 15,500 653.0p
18 Apr 1996 181,234 781.0p
31 Jul 1996 46,001 745.0p
16 Jul 1997 33,000 677.5p
18 Jul 1997 50,001 657.0p
2 Sep 1998 190,000 740.0p
26 Jul 1999 63,500 757.5p
19 Jul 2000 99,400 722.5p
24 Jul 2001 124,500 810.0p
5 Jul 2002 205,500 782.5p
20 Nov 2003 198,700 945.0p
21 Reserves
Company
2004 2003
£m £m
Non-distributable reserves
Capital redemption reserve 1.2 1.2
Capital reserve – realised 61.9 13.2
Capital reserve – unrealised 394.9 169.7
458.0 184.1
Distributable reserves
Special reserve 379.5 390.0
Revenue reserve 71.8 71.8
451.3 461.8
Notes to the financial statements
continued Caledonia Investments plc
Annual report 2004 69
21 Reserves (continued)
The movement in the reserves was as follows:
Capital Capital Capital
redemption reserve reserve Special Revenue
reserve realised unrealised reserve reserve
£m £m £m £m £m
Opening balance 1.2 13.2 169.7 390.0 71.8
Liquidation and reduction of subsidiary undertakings – 29.0 (29.0) ––
Realised gains on sale of investments – 20.1 (20.1) – –
Tax on sale of investments – (0.4) – – –
Revaluation of investments – – 274.3 – –
Profit for the financial year –––– 8.9
Dividends – – – (10.5) (8.9)
Closing balance 1.2 61.9 394.9 379.5 71.8
The special reserve arose as a result of a capitalisation issue and subsequent Court approved reduction of capital undertaken in 2003.
The profit for the year dealt with in the financial statements of Caledonia Investments plc was £8.9m (2003 – £9.6m loss).
Group
Capital Profit
redemption Revaluation and loss
reserve reserve account
£m £m £m
Opening balance 1.2 21.2 627.8
Exchange differences – 0.5 (4.2)
Realised gains on sale of investments – (21.3) 21.3
Revaluation of investments – 291.6 –
Revaluation of former associates transferred to investments – (21.3) –
Tax on sale of investments – – (0.4)
Goodwill written back on the transfer of associates to investments – – 36.4
Retained loss for the year – – (15.6)
Closing balance 1.2 270.7 665.3
The cumulative amount of positive goodwill written off at 31 March 2004 was £6.0m (2003 – £52.3m), of which £6.0m (2003 – £6.0m)
related to subsidiary undertakings.
22 Net asset value per ordinary share
The company’s net asset value per ordinary share is based on the 72,613,000 ordinary shares in issue at 31 March 2004 (2003 – 72,613,000).
Net asset value per share has been calculated both before and after deducting the accrual for the proposed final dividend.
23 Reconciliation of shareholders’ funds
Group
2004 2003
£m £m
T otal recognised gains and losses for the financial year 270.0 (62.1)
Dividends (19.4) (18.8)
250.6 (80.9)
Purchase of own shares – (3.4)
Goodwill written back on transfer of associates to investments 36.4 –
Goodwill on disposals written back – 1.9
Net movement in shareholders’ funds 287.0 (82.4)
Opening balance of shareholders’ funds 655.5 737.9
Closing balance of shareholders’ funds 942.5 655.5 Caledonia Investments plc
Annual report 2004 70
Notes to the financial statements
continued
24 Segmental analysis
By geographical area
Share of associates
Turnover Turnover Profit Profit
by destination by origin before tax Net assets before tax Net assets
£m £m £m £m £m £m
2004
United Kingdom 62.3 69.0 7.7 690.0 – –
Continential Europe 26.2 21.7 (1.1) 44.1 – –
North America 26.4 27.9 (1.8) 190.5 – –
Rest of the world 10.9 7.2 1.3 19.0 – –
125.8 125.8 6.1 943.6 – –
2003
United Kingdom 62.0 74.7 6.9 265.4 10.4 174.9
Continential Europe 31.5 21.5 0.8 30.3 (0.6) 12.6
North America 26.2 27.6 (0.9) 62.6 6.6 101.0
Rest of the world 12.4 8.3 0.4 9.6 – –
132.1 132.1 7.2 367.9 16.4 288.5
Share of associates 16.4 288.5
132.1 132.1 23.6 656.4 16.4 288.5
By activity
The group has investment and trading operations. The investment segment had profits of £4.9m (2003 – £4.3m loss) and net assets 
of £814.2m (2003 – £251.7m) and the trading segment had profits of £1.2m (2003 – £27.9m including associates) and net assets of
£129.4m (2003 – £404.7m including associates).
25 Reconciliation of operating profit to operating cash flows
Company Group
Pro forma
2004 2003 2004 2003
£m £m £m £m
Operating profit 9.9 7.7 (11.5) (9.4)
Reorganisation to convert to investment trust status – (8.0) – –
Income from investments – – 17.3 8.7
Interest receivable – – 1.1 3.2
Depreciation and amortisation – – 7.4 7.1
Profit on sale of fixed assets – – – (0.2)
Investment income and interest accruals increase (1.0) 21.8 (0.9) 0.1
Stocks increase – – (6.1) 0.5
Debtors increase 0.3 (0.6) (1.2) 1.0
Creditors decrease (6.1) 13.6 (6.3) 1.4
Net cash inflow from operating activities 3.1 34.5 (0.2) 12.4
The company cash flow statement for 2003 was based on the actual cash flows, whereas the company operating profit for 2003 was
on a pro forma basis, excluding the effects of the reorganisation carried out to enable the company to achieve investment trust status.
The ‘reorganisation to convert to investment trust status’ above is the difference between the pro forma operating profit for the year
and the actual operating loss.
Easybox SCA absorbed £0.8m of the group’s net operating cash flows, paid £0.5m of interest, utilised £3.9m for capital expenditure
and borrowed £2.9m to finance its activities. Caledonia Investments plc
Annual report 2004 71
26 Management of liquid resources
In the current and prior years, liquid resources comprised term deposits with a maturity of less than one year.
27 Analysis of changes in net funds
Company
Opening Closing
balance Cash flow balance
£m £m £m
Cash at bank and in hand 1.4 4.6 6.0
Bank overdrafts (8.6) 8.6 –
(7.2) 13.2 6.0
Short term deposits 38.9 (6.1) 32.8
Debt due after more than one year (4.8) – (4.8)
26.9 7.1 34.0
Group
Opening Exchange Closing
balance Cash flow Acquisitions differences balance
£m £m £m £m £m
Cash at bank and in hand 4.6 10.5 – (0.5) 14.6
Bank overdrafts (0.3) (3.8) – – (4.1)
4.3 6.7 – (0.5) 10.5
Short term deposits 43.9 (3.7) – – 40.2
Debt due within one year (0.1) (0.1) – – (0.2)
Debt due after more than one year (4.9) (27.0) (10.4) – (42.3)
43.2 (24.1) (10.4) (0.5) 8.2
28 Capital commitments
Company Group
2004 2003 2004 2003
£m £m £m £m
Tangible assets
Contracted but not delivered – – 1.6 0.1
Investments
Contracted but not called 40.4 47.4 40.4 47.4
Conditionally contracted 30.6 15.0 30.6 15.5
71.0 62.4 72.6 63.0
29 Operating lease commitments
Group
Commitments in the next year under non-cancellable operating leases were as follows:
Land and buildings Other
2004 2003 2004 2003
£m £m £m £m
Operating leases which expire
Within one year 0.1 0.2 0.1 –
Within two to five years 0.4 0.2 0.4 0.3
In over five years 1.8 1.8 – –
2.3 2.2 0.5 0.3
30 Contingent liabilities
The company and certain subsidiaries have entered into cross guarantees in respect of group banking arrangements and VAT grouping. Caledonia Investments plc
Annual report 2004 72
Notes to the financial statements
continued
31 Related party transactions
Transactions with related parties, as defined by FRS 8 are described below.
Administration fees of £0.1m (2003 – £0.1m) were receivable from The Cayzer Trust Company, which held 37.8% of the issued ordinary
share capital of the company at 31 March 2004 (2003 – 37.7%). £4.7m of the variable rate unsecured loan notes 2010 is held by The
Cayzer Trust Company (2003 – £4.7m). Of the £0.2m of interest payable on the loan notes, £0.2m was paid to The Cayzer Trust
Company (2003 – £0.2m). Dividends were payable to Cayzer family members, trusts and controlled companies who, together, held
49.3% of the issued ordinary share capital of Caledonia at 31 March 2004 (2003 – 49.9%).
Included in normal business transactions was a management fee of £0.1m (2003 – £0.1m) payable to Landsdown, which owns 25% 
of St Lawrence Properties, and in which the group has a 50% interest. In 2003, St Lawrence Properties paid a dividend of £1.0m, 
of which £0.3m was due to Landsdown.
Normal business transactions with associates in 2003 amounted to £0.4m. Amounts due from associates at 31 March 2003 were £2.3m.
Messrs J M B Cayzer-Colvin and W P Wyatt, relatives of certain directors of the company, are directors of some group companies.
32 Pensions
The group operates a number of pension schemes in the UK, USA and Germany. The principal schemes, based in the UK, are the
Caledonia, Sterling, Amber and Edinburgh Crystal pension schemes. These schemes are of the defined benefits type, with assets 
held in separate trustee administered funds. Contributions to the schemes are made in accordance with the recommendations of the
schemes’ actuaries. In addition, contributions are made to independently operated personal pension plans.
For the year ended 31 March 2004, the total pension cost for the group was £2.5m (2003 – £2.0m).
Pension cost relating to the principal UK defined benefit schemes is assessed in accordance with the advice of qualified actuaries,
using the attained age and projected unit methods. The latest actuarial valuations of the Caledonia, Sterling, Amber and Edinburgh
Crystal pension schemes (which are now closed to new members) were at 31 March 2003, 1 October 2002, 6 April 2003 and 
31 March 2002 respectively. The main actuarial assumptions made in the valuations were that long term investment returns would 
be 0.25% to 3.60% per annum higher than the annual increase in pensionable salaries and that pensions would increase at the lesser
of 5% per annum or the increase in the Retail Price Index.
The market value of the assets on the dates of the most recent actuarial valuations for the Caledonia, Sterling, Amber and Edinburgh
Crystal schemes totalled £10.5m, £6.9m, £3.1m and £4.6m respectively. The levels of funding for the schemes shown by the valuations,
being the actuarial value of assets expressed as a percentage of accrued benefits at the valuation date, allowing for expected future
increases in salaries, were 62% for Caledonia, 67% for Sterling, 53% for Amber and 91% for Edinburgh Crystal. Contribution rates 
have been or will be increased to address these funding shortfalls.
The above actuarial valuations showed an aggregated deficit of £13.0m.
FRS17 disclosures
Although the company continues to account for pension costs in accordance with SSAP 24: Accounting for Pension Costs, the
following transitional disclosures are made in accordance with FRS 17: Retirement Benefits.
The group operates a number of defined benefit pension schemes. The principal schemes, based in the UK and USA, are the
Caledonia, Amber, Sterling and Edinburgh Crystal pension schemes. Where appropriate, this note presents an aggregation of
information for these schemes.
Full actuarial valuations of the Caledonia, Sterling, Amber and Edinburgh Crystal schemes were carried out at 31 March 2003, 
1 October 2002, 6 April 2003 and 31 March 2002 respectively. FRS 17 based analyses of the schemes at 31 March 2004 have been
prepared by independent qualified actuaries.
All of the principal schemes are now closed to new members. As a consequence, under the projected unit method, the current 
service costs will increase as the members of the schemes approach retirement.
The major assumptions used by the actuaries in valuing the schemes’ liabilities were as follows:
2004 2003 2002
% %%
Rate of increase in salaries 4.5 4.3 4.4
Rate of increase in pensions in payment 3.0 3.0 3.1
Discount rate 5.6 5.6 6.4
Inflation rate 3.0 3.0 3.1 Caledonia Investments plc
Annual report 2004 73
32 Pensions (continued)
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions which, due to the
timescale covered, may not necessarily be borne out in practice.
The fair value of the scheme’s assets, which are not intended to be realised in the short term and may be subject to significant change
before they are realised, and the present value of the schemes’ liabilities, which are derived from cash flow projections over long
periods and thus inherently uncertain, were as follows:
Long term Long term Long term
return return return
expected Valuation expected Valuation expected Valuation
at Mar 04 at Mar 04 at Mar 03 at Mar 03 at Mar 02 at Mar 02
%£m %£m % £m
Equities 8.1 30.3 8.2 22.7 7.4 31.8
Bonds 5.0 3.3 4.8 2.7 6.5 4.9
Other 4.4 2.6 6.1 4.3 4.8 2.0
T otal market value of assets 36.2 29.7 38.7
Present value of schemes’ liabilities (51.6) (48.5) (44.0)
Deficit in the schemes (15.4) (18.8) (5.3)
Related deferred tax asset 4.6 5.6 1.6
Net pension liability (10.8) (13.2) (3.7)
The analysis of movements within the schemes was as follows:
2004 2003
£m £m
Analysis of amount charged to operating profit
Current service cost 1.5 1.6
T otal operating charge 1.5 1.6
Analysis of amount credited to other finance income
Expected return on pension schemes’ assets 2.2 3.0
Interest on pension schemes’ liabilities (2.7) (2.7)
Net return (0.5) 0.3
Analysis of amount recognised in statement of total recognised gains and losses
Actual return less expected return on pension schemes’ assets 4.4 (11.8)
Experience gains and losses arising on the schemes’ liabilities 3.0 3.5
Changes in assumptions underlying the present value of schemes’ liabilities (3.4) (5.0)
Actuarial gain recognised in statement of total recognised gains and losses 4.0 (13.3)
Movement in deficit during the year
Deficit in schemes at beginning of the year (18.8) (5.3)
Movement in year
Current service cost (1.5) (1.6)
Contributions 1.4 1.1
Other finance income (0.5) 0.3
Actuarial surplus 4.0 (13.3)
Deficit in schemes at end of the year (15.4) (18.8)
History of experience gains and losses
Difference between the expected and actual return on schemes’ assets
Amount 4.4 (11.8)
Percentage of schemes’ assets 12% -40%
Experience gains and losses on schemes’ liabilities
Amount 3.0 3.5
Percentage of the present value of the schemes’ liabilities 6% 7%
T otal amount recognised in statement of total recognised gains and losses
Amount 4.0 (13.3)
Percentage of the present value of the schemes’ liabilities 8% -27% Caledonia Investments plc
Annual report 2004 74
Notes to the financial statements
continued
33 Capital gains tax
As stated in the Dun & Bradstreet Capital Gains Tax Service, the market value of the company’s ordinary shares at 31 March 1982,
adjusted for the capitalisation issue in August 1982 and the sub-division in July 1984, was 65.90909p.
34 Post balance sheet event
Proposed elective special dividend
On 15 March 2004, the company announced outline proposals for a return of funds to ordinary shareholders. On 19 May 2004, a
circular was sent to all shareholders detailing the proposals. Subject to shareholder approval and certain other conditions being met,
all Caledonia ordinary shareholders will be offered the opportunity to receive a special dividend on terms that they give up part of their
shareholdings. The special dividend will be set at a fixed discount of 18% to Caledonia’s net asset value per share, calculated as at 
a fixed date, expected to be 25 June 2004, and in accordance with the methodology set out in the circular. Shareholders may elect to
receive the special dividend on up to a maximum of two out of every nine ordinary shares held. Shares elected for the special dividend
will be cancelled for nil consideration.
The Cayzer Trust Company, the holder of 37.8% of the ordinary shares in Caledonia, has undertaken to elect for the special dividend 
in respect of its full entitlement. Holders of 7.0% of the ordinary shares in Caledonia have irrevocably committed that they will not elect
for the special dividend.
Based on Caledonia’s published unaudited net asset value per ordinary share of 1301p as at 30 April 2004, adjusted for the final
dividend of 18.6p per share for the year ended 31 March 2004, and assuming overall levels of elections from either holders of 37.8% 
of the issued ordinary shares (being the lowest possible level of elections) or holders of 93.0% of the issued ordinary shares (which, 
in the light of the irrevocable commitments referred to above, is the highest possible level of elections) the cost of the elective dividend
will be in the range of £64.1m to £157.8m. For shareholders who choose not to elect for the special dividend, the net asset value per
share attributable to their total shareholdings will increase by between 1.6% and 4.7%, depending upon the level of elections. Caledonia Investments plc
Annual report 2004 75
Notice of the annual general meeting
Notice is hereby given that the seventy-fifth annual general meeting of Caledonia Investments plc will be held at the Crowne Plaza
London-St James Hotel, 45-51 Buckingham Gate, London SW1E 6AF , on Wednesday, 14 July 2004 at 11:30 am for the purpose of
considering and, if thought fit, passing the following resolutions which, in the case of resolution 10, will be proposed as a special
resolution, and, in the case of all the other resolutions, will be proposed as ordinary resolutions:
1. T o receive and adopt the directors’ report and the accounts for the year ended 31 March 2004, together with the auditors’ report 
to the members.
2. T o approve the directors’ remuneration report for the year ended 31 March 2004.
3. T o declare a final dividend of 18.6 pence per ordinary share.
4. T o re-elect Mr C M Allen-Jones as a director.
5. T o re-elect The Hon C W Cayzer as a director.
6. T o re-elect Mr T C W Ingram as a director.
7. T o re-elect Mr J R H Loudon as a director.
8. T o reappoint KPMG Audit Plc as auditors and authorise the directors to agree their remuneration.
9. That the authority conferred on the directors by article 6.1 of the company’s articles of association be renewed for a period
expiring at the conclusion of the next annual general meeting of the company after the date on which this resolution is passed 
and for that period the section 80 amount shall be £1,210,224.
10. That the power conferred on the directors by article 6.2 of the company’s articles of association be renewed for a period expiring
at the conclusion of the next annual general meeting of the company after the date on which this resolution is passed and for that
period the section 89 amount is £181,533.
By order of the board
G P Denison
Secretary
19 May 2004
Notes
1. A member entitled to attend and vote at this meeting may appoint one or more proxies to attend and, on a poll, vote instead of
him. A proxy need not be a member of the company.
2. T o be valid, forms of proxy must be lodged with the company or its registrars, together with any power of attorney under which 
it is signed or a notarially certified copy thereof, not less than 48 hours before the meeting. A form of proxy accompanies this
document. Completion of a form of proxy does not preclude a member from attending and voting at the meeting.
3. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, the company specifies that only those ordinary
shareholders entered in the register of members of the company as at 6.00 pm on 12 July 2004 or, in the event that the meeting 
is adjourned, on the register of members 48 hours before the time of any adjourned meeting(s), shall be entitled to attend and/or
vote in respect of the number of ordinary shares registered in their names at that time. Changes to the entries on the register of
members after 6.00 pm on 12 July 2004 or, in the event that the meeting is adjourned, in the register of members 48 hours before
the time of any adjourned meeting(s), shall be disregarded in determining the rights of any person to attend or vote at the meeting(s),
notwithstanding any provisions in any enactment, the articles of association of the company or other instrument to the contrary.
4. Biographical details of the directors standing for re-election at the meeting are set out on pages 28 and 29. Caledonia Investments plc
Annual report 2004 76
Key dates
The company publishes a monthly fact sheet shortly after the month end, which includes its net asset value per share. Annual results
are announced in late May and interim results are announced in mid November. Annual reports are posted to shareholders in mid June
and interim reports in late November. All of this information is made available on the company’s website.
The company holds its annual general meetings in London in mid July. The interim dividends are paid in early January and final
dividends are paid in late July.
Investing in Caledonia
Ordinary shares in Caledonia may be bought or sold directly through a stockbroker, accountant, other independent financial adviser 
or through a number of banks and building societies. Its shares can be treated as qualifying investments for the purpose of the PEP
and ISA rules. In addition, investors may buy shares through the Caledonia Investments Share Savings Plan and the Caledonia
Investments Individual Savings Account (‘ISA’), further information on which can be found below.
Caledonia Investments Share Savings Plan and Caledonia Investments ISA
The company has made arrangements for a share savings plan and an ISA to be made available to allow investors to purchase
Caledonia shares in a flexible manner and, in the case of the ISA, to hold them tax efficiently. The Caledonia Investments Share
Savings Plan is operated by Capita IRG Trustees Ltd and the Caledonia Investments ISA by Capita Financial Managers Ltd. Both are
designed to allow lump sum and regular savings into the company’s shares, offering regular monthly savings from £50, lump sum
investments from £500, half yearly statements and automatic dividend reinvestment. Investment in Caledonia Investments ISA is
subject to the maximum permitted amounts of £7,000 per annum for a Maxi ISA and £3,000 per annum for a Mini ISA (up to tax year 2006).
For details of the Caledonia Investments Share Savings Plan, please contact Regulated Business at Capita IRG Trustees Ltd at 
34 Beckenham Road, Beckenham, Kent BR3 4TU, or telephone on 0870 162 3100. For details of the Caledonia Investments ISA,
please contact Capita Financial Managers Ltd at Northern House, Woodsome Park, Fenay Bridge, Huddersfield HD8 0GA or
telephone 020 7556 8800. Documentation for both the Share Savings Plan and the ISA are available on Caledonia’s website.
Share price and other  information
The market price of the company’s ordinary shares is published in The Financial Times and other leading newspapers. The share 
price and details of the company’s performance can be found on the company’s website at www.caledonia.com. The London Stock
Exchange Daily Official List (‘SEDOL’) code is 0163992.
The company is a member of the Association of Investment Trust Companies (‘AITC’) and contributes to the AITC’s monthly
information services.
Investor information Caledonia Investments plc
Annual report 2004 77
Executive directors
Peter N Buckley (chairman)
2
Timothy C W Ingram (chief executive)
Jonathan H Cartwright (finance director)
The Hon Charles W Cayzer
John M May
Non-executive directors
James R H Loudon (deputy chairman)
1,2,3
Charles M Allen-Jones (senior independent)
1,2,3,4
Mark E T Davies
2,3,4
Sir David Kinloch Bt
David G F Thompson
1,2,4
Michael G Wyatt MBE
1. Member of the Audit Committee
2. Member of the Nomination Committee
3. Member of the Remuneration Committee
4. Member of the Governance Committee
Associate directors
Anthony J Carter
Jamie M B Cayzer-Colvin
Graeme P Denison
Jonathan R Hale
Anthony E G Hambro
Paul M Whiteley
William P Wyatt
Secretary
Graeme P Denison
Registered office
Cayzer House
30 Buckingham Gate
London SW1E 6NN
Registered number
Registered in England no 235481
Auditors
KPMG Audit Plc
1 Canada Square
Canary Wharf
London E14 5AG
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
T el: 0870 162 3100
Brokers
Cazenove & Co. Ltd
20 Moorgate
London EC2R 6DA
Solicitors
Freshfields Bruckhaus Deringer
65 Fleet Street
London EC4Y 1HS
Financial advisers
N M Rothschild & Sons Ltd
New Court
St Swithin’s Lane
London EC4P 4DU
p.20 ©Greenwich Peninsula Masterplan, T erry Farrell & Partners Masterplanners.
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Designed and produced by College Design, London 020 7457 2020 Caledonia Investments plc
Cayzer House
30 Buckingham Gate
London SW1E 6NN
tel 020 7802 8080
fax 020 7802 8090
email enquiries@caledonia.com
web www.caledonia.com