Eleco : AGM Notice

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to any aspect of the proposals referred to in this document or as to the action you should take, you should seek your own advice from a stockbroker, solicitor, accountant, or other professional adviser.

If you have sold or otherwise transferred all of your shares, please pass this document together with the accompanying documents to the purchaser or transferee, or to the person who arranged the sale or transfer so they can pass these documents to the person who now holds the shares.

Eleco Public Limited Company

(incorporated and registered in England and Wales under number 00354915)

NOTICE OF ANNUAL GENERAL MEETING

Notice of the Annual General Meeting of Eleco Public Limited Company to be held at finnCap, One Bartholomew Close, London, EC1A 7BL on 25 May 2022 at 10:00 am (BST) is set out at the end of this document.

Whether or not you propose to attend the Annual General Meeting, please complete and submit a proxy form in accordance with the instructions printed on the enclosed form. The proxy form must be received not less than 48 hours before the time of the holding of the Annual General Meeting.

Eleco Public Limited Company

(incorporated and registered in England and Wales under number 00354915)

Registered Office:

6 Bevis Marks London

United Kingdom EC3A 7BA

8 April 2022

Notice of Annual General Meeting

Dear Shareholder,

1. Introduction

I am pleased to be writing to you with details of the Annual General Meeting ("AGM") for Eleco Public Limited Company (the "Company") which we are holding at our NOMAD's offices, finnCap, One Bartholomew Close, London, EC1A 7BL on 25 May 2022 at 10:00 am (BST). The formal notice of AGM is set out on pages 7 to 14 of this document. Your attention is drawn to the recommendations of the Board as set out in paragraph 4 of this letter.

2. Explanatory notes to the notice of the AGM

The following notes explain the proposed resolutions. Resolutions 1 to 10 are proposed as Ordinary resolutions. For each of the Ordinary resolutions to be passed, more than half of the votes cast must be in favour of each resolution. Resolutions 11 and 12 are proposed as Special resolutions. For each of the Special resolutions to be passed, at least three quarters of the votes cast must be in favour of each Special resolution.

Resolution 1 - Annual report and accounts

The directors must present the audited annual accounts and the directors' and auditors' report for the financial year ended 31 December 2021.

Resolutions 2 and 3 - Re-appointment and remuneration of auditors

The Company must appoint auditors at each general meeting at which accounts are presented to shareholders to hold office until the conclusion of the next such meeting. Resolution 2 seeks shareholder approval to re-appoint RSM UK Audit LLP as the Company's auditors.

In accordance with normal practice, Resolution 3 seeks authority for the Company's directors to fix the auditor's remuneration.

Resolution 4 - Dividend

If resolution 4 is approved by shareholders, the final dividend for the year ended 31 December 2021 of 0.40p per Ordinary share will be paid on 20 June 2022 to shareholders whose names appear on the register of members at close of business on 6 June 2022.

Resolutions 5 to 9 - Re-appointment of directors

The Company's articles of association permit any director appointed by the directors since the date of the last AGM to hold office only until the date of the next AGM. The director is then eligible for election by shareholders.

In addition, one third of the directors are required to retire by rotation each year and no director may serve for more than three years without being re-elected by shareholders.

In line with best practice and as part of the Board's commitment to continue to enhance the Company's corporate governance practices, all the directors of the Company will stand for re-election at the AGM.

The biographical details of all directors can be found on the Company's website athttps://eleco.com/ governance/board.

The Board believes that the balance and makeup of the Board is appropriate for the Company and aligns with corporate governance good practice. The Nomination Committee reviews on an annual basis the balance and composition of the Board, including the independence of all Non-Executive Directors.

In 2020, the Chairman was appointed to succeed the previous Executive Chairman. The executive function was only intended to be temporary in order to oversee the formation of the new executive team. As such, the Chairman immediately set out the roles and responsibilities of the Chairman and CEO to align with a non-executive position, focusing the role instead on strategy and mentoring. At the end of the Chairman's 1-year contract, she reverted to a non-executive status. Although she is no longer considered independent under the test in the UK Corporate Governance Code, the Board believes that she is the right person to chair the Board at this time, providing continuity to the business. The independence of the Board is assured through the three new independent Non-Executive Directors including the appointment of a new Senior Independent Director.

As all of the independent Non-Executive Directors were new, the Chairman took a seat on the Remuneration Committee to provide continuity and insight on the performance of the Executive Directors. As the induction period of the new Non-Executive Directors draws to a close, and with the confidence that the Remuneration Committee is now well-established under the chairmanship of the Senior Independent Director, the Chairman has stepped down as a member of the Remuneration Committee, ensuring that, going forward, the membership of the Remuneration Committee is completely independent.

Resolution 10 - Directors' authority to allot

Paragraph 10.1 of Resolution 10 would give the directors the authority to allot shares in the Company and grant rights to subscribe for or convert any security into shares in the Company up to an aggregate nominal value of £124,731.98. This represents approximately 15% of the Ordinary share capital of the Company in issue at 8 April 2022 (being the latest practicable date prior to the publication of this notice).

The directors' authority will expire (unless previously revoked by the Company) on the earlier of 30 June 2023 and the conclusion of the next annual general meeting.

Please refer to the recommendations of the Board as noted in paragraph 4 of this document which explain how these values are selected.

Resolution 11 - Statutory pre-emption rights

Under company law, when new shares are allotted for cash, they must generally first be offered to existing shareholders pro rata to their holdings. This special resolution gives the directors authority for the period ending 30 June 2023 or, if earlier, the date of the next AGM, to: (a) allot shares of the Company for cash in connection with a pre-emptive offer; and (b) otherwise allot shares of the Company for cash up to an aggregate nominal value of £41,577.32 (representing in accordance with institutional investor guidelines, approximately 5% of the total Ordinary share capital in issue as at 8 April 2022 (being the latest practicable date prior to the publication of this notice) as if the statutory pre-emption rights under the Companies Act 2006 law did not apply.

Please refer to the recommendations of the Board as noted in paragraph 4 of this document which explain how these values are selected.

Resolution 12 - Authority for market purchase of own shares

Resolution 12 grants the Company's authority to make limited market purchases of the Company's Ordinary shares. The authority is limited to a maximum aggregate number of 8,315,465 Ordinary shares (representing 10% of the issued share capital as at 8 April 2022 (being the latest practicable date prior to publication of this notice) and sets out the minimum and maximum prices that can be paid, exclusive of expenses. The authority conferred by this resolution will expire at the conclusion of the Company's next AGM or 30 June 2023 from the passing of this resolution, whichever is the earlier.

Please refer to the recommendations of the Board as noted in paragraph 4 of this document which explain how these values are selected.

3. Dividend

The Board is recommending a final dividend for the financial year ended 31 December 2021 of £332,618.60 equating to a dividend per share of 0.40p. This dividend is expected to be paid on 20 June 2022 to all shareholders appearing on the register of members as of 6 June 2022.

4. Recommendations

The Board considers that all the resolutions to be put to the meeting are in the best interests of the Company and its shareholders as a whole.

Resolutions 10, 11 and 12 relate to directors' authority to allot shares, disapplication of statutory pre-emption rights and Company purchase of own shares. At the 2021 annual general meeting of the Company, the resolutions relating to directors' authority to allot, the disapplication of statutory pre-emption rights and Company purchase of own shares were voted down. It is important for shareholders to note that the Company requires such authorities from its shareholders to be able to raise funds which may be essential for its operation.

The Board have carefully reviewed the authorities requested and taken external advice on the level of these authorities. They have concluded that they are in line with best practice including share capital management guidelines issued by the Investment Association (the "Guidelines") as noted below. Companies whose shares are admitted to trading on the Alternative Investment Market ("AIM") are encouraged to adopt the Guidelines, although they are not binding on companies listed on AIM and many companies listed on AIM choose to request authorities in excess of those recommended under the Guidelines.

The Guidelines set out the expectation of Investment Association members where companies seek general shareholder authorisation for directors' authority to allot new shares, the disapplication of pre-emption rights and the Company purchase of own shares. Following a recommendation by the Rights Issue Review Group to the Chancellor, the ceiling on directors' authority to allot shares was increased from one-third to two-thirds. The Board concluded that a ceiling amount in relation to directors' authority to allot of 15% (£124,731.98) of the Company's issued share capital is appropriate for the Company.

A special resolution to disapply pre-emption rights should comply with the provisions of the Pre-emption Group's current Statement of Principles. The Pre-emption Group recommends authority for the disapplication of pre-emption rights up to 5% of the issued share capital. The Board has therefore aligned itself with this guidance and recommends the disapplication of statutory pre-emption rights in relation to the allotment of equity securities up to 5% of the issued share capital, amounting to £41,577.32.

The Guidelines comment that a general authority to purchase up to 10% of the existing shares in issue of a Company is standard practice. The Board has therefore requested authority to repurchase its own shares up to the amount of 8,315,465 of the Ordinary shares in issue.

Your board will be voting in favour of all resolutions and unanimously recommends that you do so as well.

5. Action to be taken by shareholders

The resolutions are subject to shareholder approval. A notice convening the AGM is set out on pages 7 to 14 of this document.

A form of proxy for the AGM is enclosed with this document and you are requested to complete and post the form of proxy to the Company's registrars as soon as possible or submit your vote via CREST or via www. sharegateway.co.uk if applicable. The completion and return of a form of proxy will not prevent you from attending the AGM in person, speaking and voting if you wish to do so.

To be valid, an instrument appointing a proxy and any power of attorney or other authority under which the proxy instrument is signed (or a notarially certified copy thereof) must be deposited at the Company's registrars by 10:00 am (BST) on 23 May 2022.

The following documents will be available for inspection at the Company's registered office from the date of this document until the close of the AGM and at the AGM location from 15 minutes before the AGM until it ends:

• i. Copies of the Executive Directors' service contracts; and

• ii. Copies of letters of appointment of the Non-Executive Directors.

Yours faithfully,

Serena Lang Chairman