Costain : Notice of Annual General Meeting 2023

Registered Office:

Costain House

Vanwall Business Park

Maidenhead

Berkshire

SL6 4UB

4 April 2023

2023 Annual General Meeting

Dear Shareholder,

I am delighted to have been appointed chair of Costain from December 2022 and to invite you to attend our 2023 AGM at No. 11 Cavendish Square, London W1G 0AN at 3.00pm on Thursday 11 May 2023.

The Board recognises the importance for our shareholders to make an informed vote and ask questions. Registered shareholders, whether they intend to attend the meeting or otherwise, may submit questions to the Directors in advance of the meeting by sending an email to AGM@costain.com. The Company will answer these in due course, including, where possible and appropriate, by publishing the response on the website at www.costain.com/agm before the proxy voting deadline or by answering the relevant question at the meeting.

Dividend

During the last two years, the Group has made very significant progress in its operating cash generation, demonstrated by our strong year end cash position and operating cash flow in FY22. A resilient business model and strong balance sheet is fundamental to our ability to win business and manage risk. At the same time, the Board recognises the importance of dividends to shareholders and remains committed to returning to dividend payments when appropriate.

Directors

1. joined the Board as independent Non-executive Director and chair designate on 1 November 2022 and succeeded Paul Golby on 1 December 2022 as chair of the Board and chair of the Nomination Committee. I will therefore be seeking election by shareholders for the first time at the 2023 AGM. We thank Paul for his contribution and service to Costain for over six years and wish him well for the future.

In line with the 2018 UK Corporate Governance Code, all directors of the Company (Directors) will stand for election or re-election by shareholders at the AGM. Biographical details of all the Directors, including our skills and competencies, are provided on pages 46 and 47 of the Annual Report and Accounts for 2022 (2022 Annual Report) and can be found on the Company's website at www.costain.com.

Resolutions

Details of all the resolutions that will be put to shareholders are set out in the formal Notice of the AGM on pages 4 to 6 of this document. Explanatory notes for all business of the AGM are set out on pages 10 to 13 of this document.

New Remuneration Policy

This year, as required, we are presenting for approval a new Directors' Remuneration Policy, which can be found on pages 95 to 101 of the 2022 Annual Report. Our remuneration policy is designed to be simple and transparent, aligned with delivering our strategy to transform the Group and ultimately supporting the creation of longer-term sustainable shareholder value. We have consulted with our largest shareholders in finalising the new Directors' Remuneration policy.

Share Plans

At this year's AGM, shareholders will also be asked to approve the Costain 2023 Long Term Incentive Plan (2023 LTIP) and the Costain 2023 Share Deferral Plan (2023 SDP).

Our existing 2014 Long Term Incentive Plan and 2014 Share Deferral Plan were approved by shareholders at the 2014 AGM and will reach the end of their 10-year lives in May 2024. The 2023 LTIP and 2023 SDP are replacements for the 2014 plans which, as described in the statement from the chair of the Remuneration Committee in the Directors' Remuneration Report for the year ended 31 December 2022, are proposed to coincide with the adoption of the new Directors' Remuneration Policy.

The 2014 plans include the standard overall '10% in 10 years' dilution limit on the use of new issue shares and treasury shares for all of the Company's share plans, and also the '5% in 10 years' dilution limit which applies only to 'discretionary' plans. Each of the 2023 LTIP and 2023 SDP includes the '10% in 10 years' limit but does not include the '5% in 10 years' limit. The current dilution under our discretionary plans is at the 5% in 10 years limit. This restricts our ability to grant long term incentive awards going forward over newly issued shares. The ability to grant such awards to key executives is critical to our ability to attract and retain high calibre individuals in an increasingly competitive market and to remunerate executives fairly and responsibly. Not including the '5% limit in 10 years' limit means that we can operate the new plans in a way which is aligned with our overall approach to reward - enabling us to incentivise and retain the employees who are key to delivery of long term sustainable performance, including those below the Executive Director level, whilst at the same time giving us the flexibility to settle awards in the most appropriate way taking into account all relevant considerations, including cash cost and dilution.

Summaries of the principal terms of the 2023 LTIP and 2023 SDP are set out in the Appendix (see pages 14 to 18).

Voting

It is important to the Company that shareholders have the opportunity to vote, even if they are unable to attend in person. To ensure your vote is counted we recommend that you cast your votes in advance of the AGM, using one of the following methods:

• by completing the enclosed proxy form and returning it to our registrar as soon as possible
• in electronic form via www.sharevote.co.uk or www. shareview.co.uk as applicable
• via the CREST electronic proxy service (for CREST members)
• via Proxymity for institutional investors.

The completion and return of the proxy form will not prevent you from attending and voting in person at the meeting should you so wish. Voting on resolutions at the AGM will be by way of a poll and not a show of hands. A poll is the fairest way of ensuring the wishes of shareholders are properly reflected at general meetings as it records the decision of all shareholders who have voted by proxy, and those who attend the meeting in person, based on the number of shares they hold.

Details on how to complete and return your proxy form by post, electronically, online through CREST or via Proxymity are set out on pages 7 to 9 of this Notice. Submission and receipt by the registrar of your vote must be no later than 3.00pm on Tuesday 9 May 2023.

The Company encourages shareholders to participate in, and vote at, the AGM. However, the Company will not permit behaviour at the AGM that may interfere with another person's security, safety or the good order of the meeting. Any inappropriate behaviour will be dealt with appropriately by the chair.

Annual Report and Accounts

Those shareholders who have elected to receive paper copies of shareholder information will receive a copy of the 2022 Annual Report under cover of this letter. For those shareholders who have elected to receive shareholder information electronically via the Company's website,

the 2022 Annual Report is now available for viewing and downloading online from the Company's website at www.costain.com. The majority of our shareholders have now taken the opportunity to receive shareholder information electronically and, for those shareholders receiving paper copies, may I draw your attention

to the enclosed notification concerning receipt of future shareholder information from the Company.

I would encourage all shareholders to opt to receive publications, including the Annual Report and Accounts, in electronic form. However, should you prefer to receive paper copies, please do let us know.

Recommendation

The Board considers that all the resolutions to be put to the AGM are in the best interests of the Company and its shareholders as a whole. Your Board will be voting in favour of them in respect of their own shareholdings (other than in respect of resolutions in which they hold an interest) and unanimously recommends that you do so as well.

Yours faithfully,

Kate Rock

Chair

Notice of Annual General Meeting

Costain Group PLC (the 'Company')

This year's AGM will be held at No.11 Cavendish Square, London W1G 0AN on Thursday 11 May 2023 at 3.00pm. You will be asked to consider and pass the resolutions listed below. Resolutions 18 to 21 will be proposed as special resolutions. All other resolutions will be proposed as ordinary resolutions.

Ordinary Resolutions

Annual Report and Accounts

1. To receive the audited accounts for the financial year ended 31 December 2022, together with the reports of the Directors and auditor thereon.

Directors' Remuneration Report and Directors'

Remuneration Policy

1. To approve the Directors' Remuneration Report (other than the part containing the Directors' Remuneration Policy) for the financial year ended 31 December 2022.
2. To approve the Directors' Remuneration Policy, which may be found on pages 95 to 101 of the Company's Annual Report and Accounts for the financial year ended 31 December 2022.

Election and Re-election of Directors

1. To elect Kate Rock as a Director of the Company.
2. To re-elect Alex Vaughan as a Director of the Company.
3. To re-elect Helen Willis as a Director of the Company.
4. To re-elect Bishoy Azmy as a Director of the Company.
5. To re-elect Neil Crockett as a Director of the Company.
6. To re-elect Jacqueline de Rojas as a Director of the Company.
7. To re-elect Fiona MacAulay as a Director of the Company.
8. To re- elect Tony Quinlan as a Director of the Company.

Re-appointment of Auditor and Auditor's Remuneration

1. To re-appoint PricewaterhouseCoopers LLP ('PwC') as auditor of the Company until the conclusion of the next Annual General Meeting of the Company.
2. To authorise the Directors to determine the auditor's remuneration.

Political Donations

1. That, in accordance with Part 14 of the Companies Act 2006, the Company and every other company which is now or may become a subsidiary of the Company at any time during the period for which this resolution has effect is hereby authorised to:
2. 1. make political donations to political parties and/or independent election candidates;
   2. make political donations to political organisations other than political parties; and
   3. incur political expenditure,

up to a maximum aggregate amount of £50,000 in total (as such terms are defined in Sections 363 to 365 of the Companies Act 2006) during the period of one year beginning with the date of the passing of this Resolution, provided that the sums referred to in (a), (b) and (c) above may be comprised of one or more amounts in different currencies which, for the purposes of calculating that authorised sum, shall be converted into pounds sterling at such rate as the Board of Directors in its absolute discretion may determine to be appropriate.

Powers of the Board to Allot Shares

1. That the Board of Directors be generally and unconditionally authorised pursuant to and in accordance with Section 551 of the Companies Act 2006 to exercise all the powers of the Company to allot shares in the Company or grant rights to subscribe for or to convert any security into shares in the Company:
2. 1. up to an aggregate nominal amount of £45,847,456 (such amount to be reduced by any allotments or grants made under paragraph (b) below in excess of such sum); and
   2. comprising equity securities (as defined in Section 560(1) of the Companies Act 2006) up to a further nominal amount of £91,694,913 (such amount to be reduced by any allotments or grants made under paragraph (a) above) in connection with a pre- emptive offer (including an offer by way of a rights issue or open offer):
   3. 1. to ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings; and
      2. to holders of other equity securities as required by the rights of those securities, or as the Board of Directors otherwise considers necessary,

and so that the Board of Directors may impose any limits or restrictions and make any arrangements which it considers necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter, such authorities to apply in substitution for all previous authorities pursuant to Section 551 of the Companies Act 2006 and to expire at the end of the next Annual General Meeting of the Company or, if earlier, at the close of business on 11 August 2024 but, in each case, during this period the Company may make offers and enter into agreements which would, or might, require shares to be allotted or rights to be granted to subscribe for or convert any security into shares after the authority ends and the Board of Directors may allot shares or grant rights to subscribe for or convert securities into shares under any such offer or agreement as if the authority had not expired.