Capital Gearing Trust PLC — Proxy Solicitation & Information Statement 2016

Jun 10, 2016

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should take, you are recommended to seek your own independent financial advice from your stockbroker, solicitor, accountant, bank manager or other independent financial adviser authorised under the Financial Services and Markets Act 2000 if you are in the United Kingdom or, if not, from another appropriately authorised financial adviser.

If you have sold or otherwise transferred all of your shares in Capital Gearing Trust P.l.c. (the "Company"), please send this document, together with the accompanying form of proxy, as soon as possible, to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for onward transmission to the purchaser or transferee.

CAPITAL GEARING TRUST P.L.C.

(a company incorporated and registered in Northern Ireland with registered number NI005574 and registered as an investment company under section 833 of the Companies Act 2006)

Notice of a General Meeting to renew the Board's authority to issue further shares on a non pre-emptive basis

Notice of the general meeting of the Company to be held on 27 June 2016 at 11.00 a.m. (the "General Meeting") at the offices of Dickson Minto W.S., Broadgate Tower, 20 Primrose Street, London EC2A 2EW is set out at the end of this document.

To be valid, the form of proxy accompanying this document must be completed and returned, in accordance with the instructions printed on it, so as to be received by the Company's registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or lodged at www.eproxyappointment.com as soon as possible, but in any event not later than 11.00 a.m. on 23 June 2016.

CONTENTS

	Page
EXPECTED TIMETABLE	2
LETTER FROM THE CHAIRMAN	3
Introduction	3
Reasons for requiring the extension and early renewal of the Board's authorities	3
The General Meeting	4
Action to be taken	4
Recommendation	4
NOTICE OF GENERAL MEETING	5

EXPECTED TIMETABLE

	2016
Latest time and date for receipt of forms of proxy	11.00 a.m. on 23 June
General Meeting	11.00 a.m. on 27 June

LETTER FROM THE CHAIRMAN

CAPITAL GEARING TRUST P.L.C.

(a company incorporated and registered in Northern Ireland with registered number NI005574 and registered as an investment company under section 833 of the Companies Act 2006)

E G Meek (Chairman) Waterfront Plaza G A Prescott 8 Laganbank Road R Archibald Belfast A R Laing BT1 3LR J G Matterson

Directors Registered Office

10 June 2016

Dear Shareholder

Notice of General Meeting

Introduction

On 6 May 2016 the Company published a prospectus in connection with the issue of further new ordinary shares of 25 pence each (the "Ordinary Shares") pursuant to the Company's discount and premium management policy. In order to meet the recent and continuing demand for the Ordinary Shares resulting from the operation of this policy, the Board is now proposing to seek the renewal of its shareholder authority to issue Ordinary Shares on a non pre-emptive basis prior to the Company's annual general meeting in July 2016 (the "Proposals").

The purpose of this document is therefore to convene a general meeting at which the appropriate shareholder authority will be sought. The General Meeting will be held at 11.00 a.m. on 27 June 2016 at the offices of Dickson Minto W.S., Broadgate Tower, 20 Primrose Street, London EC2A 2EW.

Reasons for requiring the extension and early renewal of the Board's authorities

At the annual general meeting in 2015 shareholders approved a new discount and premium management policy. Under this policy the Company purchases or issues Ordinary Shares to ensure, in normal market conditions, that the Ordinary Shares trade as close as possible to their underlying net asset value per share. At the annual general meeting of the Company held on 8 July 2015, shareholders granted the Board authority to allot up to 975,635 Ordinary Shares. At a general meeting held on 11 April 2016 the Board were granted authority to disapply pre-emption rights on the issue of up to 318,356 Ordinary Shares. Both authorities were granted for the period until the next annual general meeting which will be held on 8 July 2016.

Since the adoption of the zero discount and premium management policy the Board has exercised its powers by issuing 556,985 new Ordinary Shares (representing 16 per cent. of the Company's issued share capital as at the date of this document) on a non pre-emptive basis for cash and at a premium to the prevailing net asset value per share, with an increase in the issuance pattern since the beginning of 2016. As at 9 June 2016 (the latest practicable date prior to the publication of this document) the Company has the capacity to issue only a further 87,959 Ordinary Shares on a non pre-emptive basis.

The Board believes that this current capacity under the existing shareholder authorities will prove insufficient to allow the Board to continue to satisfy demand for the Ordinary Shares during the period up to the Company's next annual general meeting. If such authority is granted by shareholders the Directors will only use the authority to disapply pre-emption rights and issue shares: (i) at a premium to net asset value; (ii) to meet demand from investors; and (iii) when the Directors believe that it is in the best interests of the Company and its shareholders to do so.

The General Meeting

The Proposals are conditional on the approval of shareholders. Given the current limited capacity to continue to issue further Ordinary Shares in accordance with the discount and premium management policy the Board believes there is sufficient urgency to justify utilising their authority to call the General Meeting on 14 clear days' notice. You will find set out at the end of this document a notice convening the General Meeting at which shareholders will be asked to consider and, if thought fit, approve the Proposals. The General Meeting is to be held at 11.00 a.m. on 27 June 2016 at the offices of Dickson Minto W.S., Broadgate Tower, 20 Primrose Street, London EC2A 2EW.

The resolution, which is being proposed as a special resolution, will if passed, enable the Directors to issue new Ordinary Shares, in addition to its existing authority, and resell shares held in treasury up to an aggregate nominal amount of £87,097.25 (being 348,389 Ordinary Shares) which represents 10 per cent. of the total Ordinary Share capital of the Company in issue as at 9 June 2016 (the latest practicable date prior to the publication of this document) for cash without first offering such Ordinary Shares to existing shareholders pro rata to their existing shareholdings.

All shareholders are entitled to attend and vote at the General Meeting. In accordance with the Company's articles of association, all shareholders entitled to vote and present in person or by proxy at the General Meeting shall upon a show of hands have one vote and upon a poll shall have one vote in respect of every Ordinary Share held.

Action to be taken

Shareholders will find enclosed a form of proxy for use in connection with the General Meeting. Whether or not shareholders propose to attend the General Meeting, they are requested to complete, sign and return the form of proxy as soon as possible, in accordance with the instructions printed on it.

To be valid, the enclosed form of proxy must be lodged with the Company's registrars, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY or lodged at www.eproxyappointment.com as soon as possible and, in any event, so as to arrive by not later than 11.00 a.m. on 23 June 2016. The completion and return of the form of proxy will not prevent a shareholder from attending and voting in person at the General Meeting.

Recommendation

The Directors consider the passing of the resolution to be in the best interests of the Company and its shareholders as a whole. Accordingly, the Directors unanimously recommend that shareholders vote in favour of the resolution.

The Directors intend to vote in favour of the resolution in respect of their own beneficial holdings of Ordinary Shares (amounting to 32,107 Ordinary Shares, representing approximately 0.9 per cent. of the issued share capital of the Company as at the date of this document).

Yours faithfully

E G Meek Chairman

CAPITAL GEARING TRUST P.L.C.

(a company incorporated and registered in Northern Ireland with registered number NI005574 and registered as an investment company under section 833 of the Companies Act 2006)

NOTICE OF GENERAL MEETING

NOTICE IS HEREBY GIVEN that a general meeting of Capital Gearing Trust P.l.c. (the "Company") will be held at 11.00 a.m. on 27 June 2016 at the offices of Dickson Minto W.S., Broadgate Tower, 20 Primrose Street, London EC2A 2EW to consider and, if thought fit, pass the following resolution which will be proposed as a special resolution:

SPECIAL RESOLUTION

THAT, in addition to all existing authority, the directors of the Company be and are hereby generally empowered, pursuant to sections 570 and 573 of the Companies Act 2006 (the "Act") to allot equity securities (within the meaning of section 560 of the Act) pursuant to any authority for the time being in force under section 551 of the Act and to sell shares held by the Company in treasury, wholly for cash, as if section 561(1) of the Act did not apply to any such allotment or sale, provided that this power:

• (i) shall be limited to the allotment of equity securities and the sale of treasury shares for cash up to an aggregate nominal amount of £87,097.25 (approximately 10 per cent. of the issued share capital of the Company, as at 9 June 2016); and
• (ii) expires on the conclusion of the next annual general meeting of the Company to be held after the passing of this resolution, save that the Company may before such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such an offer or agreement as if the power conferred hereby had not expired.

By order of the Board Registered office Steven Cowie Waterfront Plaza

Company Secretary 8 Laganbank Road Belfast BT1 3LR

10 June 2016

Notes:

• 1. As a Shareholder you are entitled to appoint a proxy or proxies to exercise all or any of your rights to attend, speak and vote at the General Meeting. A proxy need not be a member of the Company but must attend the General Meeting to represent you. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You can only appoint a proxy using the procedure set out in these notes and the notes to the proxy form.
• 1. To be valid any proxy form or other instrument appointing a proxy, together with any power of attorney or other authority under which it is signed or a certified copy thereof, must be received by post or (during normal business hours only) by hand to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY. Proxy votes must be received no later than 48 hours (excluding non-working days) before the time of the meeting or any adjourned meeting.
• 1. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual and by logging on to the registrar's website www.euroclear.com/CREST. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
• 1. In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & Ireland Limited's specifications, and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the Company's registrar (ID 3RA50) no later than 48 hours (excluding non-working days) before the time of the meeting or any adjournment. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application Host) from which the Company's registrar is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
• 1. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
• 1. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
• 1. The return of a completed proxy form or other instrument of proxy will not prevent you attending the General Meeting and voting in person if you wish. If you have appointed a proxy and attend the General Meeting in person your proxy appointment will remain valid and you may not vote at the General Meeting unless you have provided a hard copy notice to revoke the proxy to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY not later than 11.00 a.m. on 23 June 2016.
• 1. To have the right to attend, speak and vote and the General Meeting (and also for the purposes of calculating how many votes a member may cast on a poll) shareholders must be registered in the Register of Members of the Company no later than 48 hours prior to the commencement of the General Meeting or any adjourned meeting. Changes to the Register of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend and vote at the meeting.
• 1. As at 9 June 2016 (being the last business day prior to the publication of this notice) the Company's issued share capital consisted of 3,483,891 ordinary shares carrying one vote each. Therefore, the total voting rights in the Company as at 9 June 2016 were 3,483,891 votes.
• 1. Any person holding 3 per cent. or more of the total voting rights of the Company who appoints a person other than the Chairman of the meeting as his proxy will need to ensure that both he and his proxy comply with their respective disclosure obligations under the Disclosure and Transparency Rules.
• 1. A quorum consisting of two or more Shareholders present in person or by proxy is required for the General Meeting. If, within half an hour after the time appointed for the General Meeting, a quorum is not present the General Meeting shall be adjourned for seven days at the same time and place or to such other day and at such other time and place as the Board may determine and no notice of adjournment need be given at any such adjourned meeting. Those shareholders present in person or by proxy shall constitute the quorum at any such adjourned meeting.