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SMART & CO. (CONTRACTORS) PLC ANNUAL REPORT AND STATEMENT OF ACCOUNTS TO 31 s t JULY 2025 86197 J Smart Annual Report Text.indd 186197 J Smart Annual Report Text.indd 1 15/12/2025 14:2515/12/2025 14:25 1 86197 J Smart Annual Report Text.indd 286197 J Smart Annual Report Text.indd 2 15/12/2025 14:2515/12/2025 14:25 1 DIRECTORS DaviD W Smart, Chairman and Joint Managing Director John r Smart, Joint Managing Director alaSDair h roSS Patricia Sweeney Jane oliver COMPANY SECRETARY Patricia Sweeney REGISTERED OFFICE 28 cramonD roaD South, e Dinburgh, eh4 6ab SUBSIDIARY COMPANIES mcGowan anD comPany (contractorS) limiteD c ramonD real eState comPany limiteD t homaS menzieS (builDerS) limiteD c oncrete ProDuctS (KirKcalDy) limiteD c. & w. a SSetS limiteD Smart ServiceD officeS limiteD northrigg limiteD Smart (manSe 1) limiteD REGISTRARS AND TRANSFER OFFICE equiniti limiteD, a SPect houSe, S Pencer roaD, l ancing, bn99 6Da BANKERS banK of ScotlanD, 75 g eorge Street, e Dinburgh, eh2 3ew AUDITOR bDo llP, chartereD accountantS, 30 S emPle Street, e Dinburgh, eh3 8bf SOLICITORS anDerSon Strathern llP, 58 m orriSon Street, e Dinburgh, eh3 8bP J. Smart & Co. (Contractors) PLC 86197 J Smart Annual Report Text.indd 186197 J Smart Annual Report Text.indd 1 15/12/2025 14:2515/12/2025 14:25 2 3 J. Smart & Co. (Contractors) PLC NOTICE IS HEREBY GIVEN that the ANNUAL GENERAL MEETING of the Company will be held at the Registered Office, 28 Cramond Road South, Edinburgh on 22nd January 2026 at 12 noon, for the following purposes: 1. To receive and consider the Statement of Accounts for the year ended 31st July 2025 and the Report of the Directors and the Independent Auditor’s Report. 2. To approve the Directors’ Remuneration Report for the financial year ended 31st July 2025 as set out on pages 72 to 77 in the Annual Report. 3. To declare a Final Dividend of 2.29p per share. 4. To re-elect John R Smart as a Director, who retires in accordance with provision 18 of the UK Corporate Governance Code. 5. To re-elect Alasdair H Ross as a Director, who retires in accordance with provision 18 of the UK Corporate Governance Code. 6. To re-elect Patricia Sweeney as a Director, who retires in accordance with provision 18 of the UK Corporate Governance Code. 7. To re-elect Jane Oliver as a Director, who being appointed in the year, retires in accordance with provision 18 of the UK Corporate Governance Code. 8. To re-appoint BDO LLP as the Company’s auditor. 9. To authorise the Directors to determine the remuneration of the Auditor. 10. To authorise the Company, via a special resolution, for the purposes of section 701 of the Companies Act 2006 to make market purchases (as defined in section 693(4) of the Companies Act 2006) of its ordinary shares of 2p each (ordinary shares) provided that: (a) the Company does not purchase under this authority more than 10% of the nominal value of the Company’s issued share capital at the date of this notice; (b) the minimum price which the Company may pay for each ordinary share is 2p (exclusive of expenses); and (c) the maximum price which the Company may pay for each ordinary share is the higher of: (i) 105% (exclusive of expenses) of the average market value of the Company’s equity shares for the five business days prior to the day the purchase is made according to the Daily Official List of the London Stock Exchange; and (ii) the higher of the price of the last independent trade and the highest current independent bid for an ordinary share on the trading venue where the purchase is carried out. This authority will expire at the earlier of 15 months from the date of passing of this resolution and the conclusion of the next Annual General Meeting, except that the Company may enter into a contract to purchase ordinary shares which will or may be completed or executed wholly or partly after this authority ends, the Company may purchase these ordinary shares pursuant to any contract as if the authority had not ended. Under this authority any shares purchased by the Company will be cancelled. 11. To transact any other business of an Annual General Meeting. Explanatory notes providing information in relation to each of the proposed resolutions in this Notice of Meeting can be found on the Company’s website www.jsmart.co.uk. A member entitled to attend and vote at this Meeting is entitled to appoint one or more proxies to attend and vote on a poll instead of him/her. A proxy need not be a member. Forms of proxy, if used, must be lodged with the Registrars of the Company at least 48 hours before the time fixed for the Meeting. Forms of proxy may also be lodged electronically by submitting a duly completed scanned copy of the proxy card to [email protected]. You may not use the electronic address provided either in this Notice of Meeting or any related documents (including the Form of Proxy) to communicate with the Company for any purpose other than that expressly stated. 86197 J Smart Annual Report Text.indd 286197 J Smart Annual Report Text.indd 2 15/12/2025 14:2515/12/2025 14:25 2 3 J. Smart & Co. (Contractors) PLC In accordance with section 311A of the Companies Act 2006, the contents of this Notice of Meeting, details of the total number of shares in respect of which members are entitled to exercise voting rights at the Annual General Meeting and, if applicable, any members’ statements, members’ resolutions or members’ matters of business received by the Company after the date of this Notice will be available on the Company’s website. Pursuant to section 319A of the Companies Act 2006, the Company must cause to be answered at the Annual General Meeting any question relating to the business being dealt with at the Annual General Meeting which is put by a member attending the meeting, except in certain circumstances, including if it is undesirable in the interests of the Company or the good order of the Meeting that the question be answered or if to do so would involve the disclosure of confidential information. BY ORDER OF THE BOARD OF DIRECTORS Patricia Sweeney Company Secretary 28 Cramond Road South, Edinburgh EH4 6AB 20th November 2025 86197 J Smart Annual Report Text.indd 386197 J Smart Annual Report Text.indd 3 15/12/2025 14:2515/12/2025 14:25 4 5 J. Smart & Co. (Contractors) PLC CHAIRMAN’S REVIEW ACCOUNTS Headline Group profit for the year before tax including an unrealised surplus in revalued property and a surplus in revalued financial assets was £6,868,000 compared with £2,365,000 last year. As in previous years, our view is that disregarding the movement in the revaluation of the commercial property and financial assets provides a truer reflection of the Group’s performance, which we refer to as underlying profit. The underlying profit before tax for the year was £866,000, compared with last year’s figure of £1,248,000, as detailed in note 10 to the financial statements. The Board is recommending a Final Dividend of 2.29p, making a total of 3.25p. The Final Dividend will cost the company no more than £890,000. TRADING ACTIVITIES Group construction activities, including residential sales, increased by 14%. Headline Group profit increased this financial year, due to the rise in the value of the commercial property portfolio. Underlying profit before tax decreased this year, mainly due to poor performance of some of our subsidiary companies and increased loss provisions in some of our private housing developments. All our construction sites and future developments continue to experience significant issues with delays in infrastructure, utility and statutory approvals. The prolonging of programmes together with the relentless increase in the cost of construction materials is still placing a downward pressure on trading margins. There has been no change to the lack of contract work in the housing association sector, with no significant movement by central government on raising funding levels. Sales at the residential development at Clovenstone Gardens have been better than expected with the majority of the private housing element being sold to local housing associations. The whole development will complete at the end of this month, but for the reasons detailed above, profit margins will be worse than expected, despite the welcome sales. The sales at Winchburgh, Canal Quarter, despite being sporadic in nature due to the lack of confidence by home buyers, have been better than expected, with incentives, less than anticipated. There is less than a quarter of the units left to be sold and sales prospects look promising. However, holding costs due to the prolonged sales period continue to erode the profitability of this development. As mentioned in the Interim Report, at the end of 2024 we entered into a new joint venture company, St Andrews 1413 Limited, with Knowe Properties Limited. The refurbishment of the 15 flats completed just after the financial year end and all properties were let soon thereafter. The absence of the requirement for statutory/utility approvals contributed to this contract experiencing next to no programme delays. I would like to pay tribute to all the people involved in this project who, set with a tight completion deadline, managed to finish the project timeously with all properties refurbished to a high standard, enabling all properties to be let on completion. Construction of the speculative industrial development at Inchmuir Park, Bathgate continues to progress well. Completion is still due in mid-2026, and it is too early to gauge the level of tenant interest. The value of our commercial property portfolio has increased substantially, due to both rental growth and an improvement in investment yields. Lettings of our industrial stock continue to improve as does rental growth. Our office properties do not show the same rate of rental growth and lettings continue, albeit at a slower pace. 86197 J Smart Annual Report Text.indd 486197 J Smart Annual Report Text.indd 4 15/12/2025 14:2515/12/2025 14:25 4 5 J. Smart & Co. (Contractors) PLC CHAIRMAN’S REVIEW (continued) TRADING ACTIVITIES (continued) A start was made just prior to the financial year end at our residential development at Primrose Lane, Rosyth. The development will provide 107 residential units for private sale and 36 residential units as the obligatory Affordable Housing element. This development is predominantly for detached and semi-detached homes, a sector of the housing market we have not dealt in for a number of years. Major infrastructure works on the site are nearly complete and construction of the first phase of units for private sale, 16 houses in total, is well underway. First completions will not be until mid-2026, with sales marketing not due to commence until the New Year. Negotiations are on-going for the Affordable Housing element with a Local Registered Social Landlord, and we are hopeful this contract may start in mid-2026. FUTURE PROSPECTS We have less work in hand in our own private housing than we did last year. Apart from the contract mentioned above at Primrose Lane, Rosyth, there are no real prospects of further external contract work at present. The long awaited Housing (Scotland) Bill has finally been passed and we are hopeful we will be able to bring forward one of our potential residential developments for new build private rent. We will provide further detail in our Interim Report on two substantial industrial developments that both transacted after the financial year end. One is through another Joint Venture and the other is a site acquisition. There will be private housing sales this year, but not as many as the reported year and margins will be affected due to the reasons outlined above. Letting and rental levels in our commercial property portfolio will remain steady. Rental growth will occur in our industrial properties, although not at such a marked rate as this year. It is difficult to predict whether investment yields will decline or increase, but we expect our property values to remain at least static in the current financial year. Work on our Sustainability Strategy progresses through the Sustainability Committee and the continued alignment with the Task Force on Climate-Related Financial Disclosures (TCFD). We aim to be a leading developer/contractor for low carbon and climate resilient developments by setting ambitious strategic objectives across the Group’s property development, construction and internal operations at the Head Office. My continued thanks go to all on the Sustainability Committee, all employees involved in sustainability matters and our consultant, Beyond Green. It remains to be seen what impact the impending Budget will have on the economy and consumer confidence, which is already at a low. At this stage it is uncertain as to whether there will be a headline profit for the year to 31st July 2026. It is with considerable regret and sadness that I pay tribute to Brian Sharp who passed away in July this year after a brave battle with cancer. Brian served your Company for just under fourteen years and worked diligently as an Architectural Technologist. Not only was he a valued colleague to all at the Company, but also a true friend to many. Our thoughts continue to be with his friends and dear family. DaviD W Smart 20th November 2025 Chairman 86197 J Smart Annual Report Text.indd 586197 J Smart Annual Report Text.indd 5 15/12/2025 14:2515/12/2025 14:25 6 7 The Directors present their Annual Report and Statement of Accounts of the Group for the year ended 31st July 2025. CORPORATE GOVERNANCE The Company is required, as a listed company on the London Stock Exchange, to prepare a report on Corporate Governance in accordance with the Financial Reporting Council’s UK Corporate Governance Code (the Code). A copy of the Code can be reviewed on the Financial Reporting Council’s website at www.frc.org.uk. The information required by the Code and also the Disclosure and Transparency Rules and the Listing Rules can be found on pages 65 to 71. RESULTS AND DIVIDENDS The profit of the Group after tax for the year ended 31st July 2025 amounted to £5,112,000 (2024, £1,673,000). During the year the Company paid on 27th January 2025 a final dividend for the year to 31st July 2024 of 2.27p per share (2024, 2.27p) and paid on 2nd June 2025 an interim dividend for the year to 31st July 2025 of 0.96p per share (2024, 0.96p). The Directors recommend a proposed final dividend for the year of 2.29p per share, making a total for the year of 3.25p. This final dividend is subject to approval by the shareholders at the Annual General Meeting in January 2026 and has not been included as a liability in these financial statements. If this dividend is approved it will be paid on 30th January 2026 to shareholders on the share register of the Company at the close of business on 19th December 2025. DIRECTORS The following were Directors of the Company during the financial year ended 31st July 2025 and as at the date of this report: − David W Smart − John R Smart − Alasdair H Ross − Patricia Sweeney − Jane Oliver – appointed 4th April 2025 Details of the Directors are given on page 64 of the financial statements. APPOINTMENT AND REPLACEMENT OF DIRECTORS The Company’s Articles of Association (the Company’s Articles) give the Directors the power to appoint or remove any Director. Initial appointments must be approved by the Board of Directors but anyone so appointed must be re-elected by ordinary resolution at the next Annual General Meeting of the Company. In accordance with the Company’s Articles, all Directors, but excluding the Chairman, must retire annually and offer themselves for re-election at the Annual General Meeting. Annual retirement of the Directors is also in accordance with provision 18 of the UK Corporate Governance Code which is followed for all the Company’s Directors except for the Chairman. DIRECTORS’ INTERESTS Details of Directors’ interests in the ordinary share capital of the Company are given in the Directors’ Remuneration Report. Details of changes in Directors’ interests between 31st July 2025 and 20th November 2025 are given on page 75 of the financial statements. Other than the original employment contract received on joining the company, no Director has been issued with a Director’s Service Contract on appointment as a director. No Director has a material interest in any contract to which the Company or any Subsidiary Company was a party to during the year. The Group finalised the construction of a commercial and industrial property of a company in which David W Smart and John R Smart have a material beneficial interest. Refer to note 34(c) for details, all transactions are at normal commercial rates. J. Smart & Co. (Contractors) PLC REPORT OF THE DIRECTORS 31st JULY 2025 86197 J Smart Annual Report Text.indd 686197 J Smart Annual Report Text.indd 6 15/12/2025 14:2515/12/2025 14:25 6 7 J. Smart & Co. (Contractors) PLC REPORT OF THE DIRECTORS (continued) 31st JULY 2025 DIRECTORS’ POWERS The Company’s Articles state that the Directors may exercise all of the powers of the Company which also includes the right of the Directors to buy back the Company’s shares based on the authority given by the shareholders following the passing of a special resolution at the Company’s 2024 Annual General Meeting. INDEMNIFICATION OF DIRECTORS In accordance with the Company’s Articles and to the extent permitted by law, Directors are granted an indemnity by the Company in respect of liabilities incurred as a result of their office. The Directors are also indemnified against the cost of defending any proceedings whether criminal or civil in which judgement is given in favour of the Director or in which the Director is acquitted or the charge is found not proven. The Company has maintained Directors’ and Officers’ liability insurance cover throughout the financial year. CAPITAL MANAGEMENT AND SHAREHOLDER INFORMATION The capital structure of the Company consists of issued share capital, reserves and retained earnings represented predominantly by investment properties, working capital and cash. The Company’s issued ordinary share capital as at 31st July 2025 comprises a single class of ordinary shares of 2p each. Details of the issued share capital are shown in note 27 of the financial statements. At the 2024 Annual General Meeting the Company was authorised by the shareholders to purchase, in the market, up to 10% of the Company’s issued share capital, as permitted under the Company’s Articles. This authority will expire at the earlier of 15 months from the date of passing of the resolution granting the authority and the conclusion of the next Annual General Meeting. The purpose of the market purchase is to enhance the earnings per share and/or the equity shareholders’ funds per share. The Directors are seeking renewal of this authority at the 2025 Annual General Meeting. During the year the Company made market purchases of 521,939 ordinary shares of 2p under the existing authority, for a total consideration of £656,000. The shares purchased were subsequently cancelled, and represented 1.32% of the Company’s issued share capital at the start of the financial year. There were no purchases of shares in the year made otherwise than through market purchases. All members who hold ordinary shares are entitled to attend and vote at a General Meeting. On a show of hands at a General Meeting every member present in person and every duly appointed proxy shall have one vote and on a poll, every member present in person or by proxy shall have one vote for every ordinary share held or represented. The Company is not aware of any agreements between shareholders that may result in restrictions on voting rights of shareholders. Rights attached to ordinary shares may only be varied by special resolution at a General Meeting. There are no specific restrictions on the transfer of securities in the Company, other than those imposed by prevailing legislation and the requirements of the Listing Rules in respect of Company Directors. The Company is not aware of any agreements between shareholders that may result in restrictions on the transfer of securities. Details of substantial shareholders can be found in the Company’s Corporate Governance Report. FINANCIAL INSTRUMENTS The Group’s financial instruments consist of bank balances and cash, financial assets, trade receivables and trade payables. The main purpose of the financial instruments are to provide working capital for the Group’s continuing activities and provide funding for future activities whether in construction or property investment. Given the nature of the Group’s financial instruments the main risk associated with these is credit risk, it is not exposed to liquidity or interest rate risk as it does not have any net debt but it does suffer from low interest rates on the amount we can earn on monies on deposit. 86197 J Smart Annual Report Text.indd 786197 J Smart Annual Report Text.indd 7 15/12/2025 14:2515/12/2025 14:25 8 9 J. Smart & Co. (Contractors) PLC REPORT OF THE DIRECTORS (continued) 31st JULY 2025 FINANCIAL INSTRUMENTS (continued) Credit risk The Group’s credit risk is mainly mitigated due to the fact the majority of the Group’s revenue relates to private house sales which are made on completion of a legal contract for the transfer of title and are to numerous customers. Other construction contract sales are mainly to social housing providers and government local authorities who undertake projects knowing funds are available to fulfil payment of contracts. With regards to rental income there is no concentration of credit risk as exposure is spread over a number of tenants. Regarding trade and other receivables, these amounts are accounted for at cost less a loss allowance for expected credit losses which are assessed based on past default experience and debtors’ current financial position, as detailed in note 21 of the financial statements. Liquidity risk As the Group finances its operations through equity and reinvested profits and does not have any net bank borrowings it has no exposure to liquidity risk. Interest rate risk As the Group has no net debt it has no exposure to interest rate risk other than in relation to interest earned on short term deposits of surplus funds when interest rates remain low. ARTICLES OF ASSOCIATION The Company’s Articles can only be amended by a special resolution at a General Meeting. No amendments are proposed to be made to the existing Company Articles at the 2025 Annual General Meeting. LISTING RULES Disclosures required in accordance with Listing Rules 6.6.1 and 6.6.6 are: LR6.6.1(1) Capitalised interest There was no interest capitalised in the year to 31st July 2025. LR6.6.1(3) Long term incentives The Group does not have any schemes for long term incentives. LR6.6.1(4)(5) Director emolument waivers No current or future emoluments have been waived . LR6.6.1(6)(7) Allotment of cash for equity None in the year. securities LR6.6.1(9) Contracts of significance No contracts in the year requiring disclosure. LR6.6.1(10) Contracts by controlling No contracts in the year requiring disclosure. shareholders Details of controlling shareholders is given on page 9. LR6.6.1(11)(12) Dividend waivers No current or future dividends have been waived. LR6.6.6(1) Directors’ interests Details of directors interests in the ordinary shares of the Company LR6.6.7 are detailed in the Directors’ Remuneration Report on page 75. LR6.6.6(2) Major shareholders’ interests Details of substantial shareholders are given in the Corporate Governance Report on page 66. LR6.6.6(3) Going concern and viability Disclosures are included in the Report of the Directors on page 12 statements and in the Strategic Report on page 20. LR6.6.6(4) Buyback of share capital Disclosures are included in the Report of the Directors on page 7 and in note 27 of the financial statements. LR6.6.6(5)(6) UK Corporate Governance Disclosures are given in the Corporate Governance Report on Code Compliance pages 65 to 71. LR6.6.6(7) Director’s service contract Disclosures are included in the Directors’ Remuneration Report on page 73. LR6.6.6(8) TCFD disclosures The TCFD report is included in the Strategic Report on pages LR6.6.8-6.6.12 21 to 61. LR6.6.6(9) Board of Directors diversity Details in the format required by LR6 Annex 1 are given in the Strategic Report on page 63. 86197 J Smart Annual Report Text.indd 886197 J Smart Annual Report Text.indd 8 15/12/2025 14:2515/12/2025 14:25 8 9 J. Smart & Co. (Contractors) PLC REPORT OF THE DIRECTORS (continued) 31st JULY 2025 CONTROLLING SHAREHOLDERS As required by UKLR6.6.1R13(a) the Company confirms that it is compliant with UKLR6.2.3R in that the Company is able to carry on its main business activities independently of its controlling shareholders, who are David W Smart and John R Smart. There is a signed Shareholder Relationship Agreement between the Company and the controlling shareholders. The Company has not and will not grant any security over its business in connection with funding of a controlling shareholder nor did the Company require any external funding in the year to enable it to carry on its main business activity. Also, the Company confirms that there were no contracts of significance between the Company or Group and a controlling shareholder, other than their contract of employment nor was there any contract for the provision of services to the Company or Group by a controlling shareholder. Under UKLR6.6.2R, if an independent director declines to support the statement made in compliance with UKLR 6.6 1R(13)(a) then this fact requires to be disclosed. As the Company currently has no Non-Executive Directors then support for this statement cannot be obtained. CHANGE OF CONTROL The Company is not party to any significant agreements which take effect, alter or terminate upon change of control of the Company following a takeover bid. The Company does not have any agreements with any Director or employee that would provide compensation for loss of office or employment, whether through resignation, purported redundancy or otherwise resulting from a takeover bid. POLITICAL DONATIONS AND POLITICAL EXPENDITURE It is the policy of the Group not to make donations for political purposes to UK or EU Political Parties or incur UK or EU Political Expenditure and accordingly neither the Company nor its Subsidiaries made donations or incurred such expenditure in the year. GREENHOUSE GAS EMISSIONS This Energy and Carbon Report, prepared in accordance with The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, is commonly known as Streamlining Energy and Carbon Reporting (SECR); it provides one lens to help us understand our carbon impacts and guide our actions to reduce our emissions. This report outlines our scope under SECR, the total energy used, and associated carbon emissions for the year ending 31st July 2025, a summary of actions taken in the year to reduce our emissions and further detail on the methodology used to comply with SECR. We do not have responsibility for any emission sources that are not related to activities included in our Annual Report and Statement of Accounts. Our Scope for SECR The SECR sets out the UK’s new mandatory reporting requirements for energy and carbon impacts of large UK organisations, as defined by the Companies Act 2006. The Group is classed as large under the regulations. SECR requires us to report the total annual energy consumption, and associated carbon emissions for our financial year. Energy relates to all energy of any fuel type where we have direct or indirect control, known as Scope 1 and 2 emissions under Greenhouse Gas Protocol (see methodology for further details). For the Group, relevant energy sources are electricity and gas consumption to run our head office in Edinburgh and our office in Kirkcaldy, diesel and petrol used in the delivery of our construction projects and property services and any business travel by personal car starting or ending in the UK. All energy and emissions relate to our activities within the UK. Our Impacts and Intensity Ratios Based on the scope outlined above, our energy and carbon impacts for the current and prior year are summarised below. These impacts show us our environmental performance and can form a baseline for us to compare ourselves to in the future. 86197 J Smart Annual Report Text.indd 986197 J Smart Annual Report Text.indd 9 15/12/2025 14:2515/12/2025 14:25 10 11 J. Smart & Co. (Contractors) PLC REPORT OF THE DIRECTORS (continued) 31st JULY 2025 GREENHOUSE GAS EMISSIONS (continued) Consumption Greenhouse Gas Emissions (MWh) (tCO2e) Energy Source 2025 2024 2025 2024 Natural Gas 1,318 1,986 241 357 Petrol 42 17 10 4 Diesel 2,273 2,665 563 631 Gas Oil 15 - 4 - Company Vehicles 8 13 2 3 Total Scope 1 3,656 4,681 820 995 Grid Electricity 499 498 93 103 Consumption of onsite Solar PV 10 - - - Total Scope 2 509 498 93 103 Business Travel 31 32 10 11 Total 4,196 5,211 923 1,109 Intensity ratios To understand our progress in improving our environmental performance, and to meet SECR requirements, we have identified intensity ratios that help put our energy consumption and emissions into the context of our business. We have chosen to use revenue and headcount - full time equivalent (FTE) employee numbers. Therefore, our intensity ratios for energy are kWh/£m and kWh/FTE and emissions tCO 2e/£m and tCO2e/FTE. This allows us to compare our impact with that of similar organisations in size and/or activities. For future years, we are currently streamlining data management to enable us to report intensity ratios for each segment of our business. Revenue £m MWh/£m tCO2e/£m FTE MWH/FTE tCO2e/FTE 2025 23.2 181 39.8 135 31.1 6.8 2024 22.0 237 50.4 140 37.2 7.9 In 2025, the Group had 5.5% increase in turnover while reducing FTE by 3.6%. Total energy consumption decreased by 19.5% and carbon emissions decreased by 16.8% driving down all intensity metrics. These reductions were supported by operational changes, a reduction of 21% in investment property footprint, which reduced gas heating requirements in common areas. Additionally, plant fuel use fell by 10%, driven by efficiency initiatives and increased subcontracting of groundwork, which reduced the use of plant. Given the nature of the development and construction business, fluctuations in intensity metrics between development cycles are not unexpected. However, overall results indicate progress in operational efficiency and sustainability performance. Our Energy Efficiency Actions Throughout the year we have taken action to reduce energy consumption and improve energy efficiency across our construction activities, investment properties and office operations. A summary of energy saving actions and programmes are detailed below: Solar PV installation at Head Office In 2024/2025, a 14 kWp solar PV system became operational at our head office. This installation, together with a series of upgrades completed in 2023/2024, including the transition to LED lighting, the introduction of motion sensors, and the installation of two EV charging points, has further strengthened the energy efficiency performance of our head office. Plant and Vehicle Fleet We have continued our transition to look at and implement, where feasible, low-carbon alternatives for plant and machinery. Through the use of battery storage for welfare facilities and site equipment, a proactive policy on reducing idling time, and the replacement of company vehicles with hybrid models, we have reduced our carbon intensity for plant fuel by 20% since 2024. 86197 J Smart Annual Report Text.indd 1086197 J Smart Annual Report Text.indd 10 15/12/2025 14:2515/12/2025 14:25 10 11 J. Smart & Co. (Contractors) PLC REPORT OF THE DIRECTORS (continued) 31st JULY 2025 GREENHOUSE GAS EMISSIONS (continued) Our Energy Efficiency Actions (continued) Investment Properties Across our investment property portfolio we are investing in energy efficiency measures that will benefit our tenants as well as our energy consumption for common areas included in Scope 1 and 2 above. We are continuing to roll out LED lighting upgrades when properties become vacant and have a programme to upgrade to smart meters where possible, install solar PV on all new developments and existing properties where appropriate. Other measures include investigating how to reduce heat loss from the building fabric and install heating controls for common areas. We are continually investigating ways to improve the energy efficiency of heating and/or cooling systems within our property portfolio. The Group has conducted a comprehensive calculation of its carbon impact under the TCFD requirements and has developed its net zero strategy and carbon reduction roadmap for coming year. Refer to our TCFD report on pages 21 to 61 of the financial statements. Methodology Overall, our methodology for preparing the energy and carbon report follows the principles set out in Environmental Reporting Guidelines 1 , namely, relevance, completeness, consistency, and transparency. We have used the GHG Protocol Corporate Accounting and Reporting Standard (revised edition) to data gathered to fulfil our requirement under these regulations and emission factors from the UK Government GHG Conversion Factors for Company Reporting 2024 and 2025 as provided by the carbon reporting accounting software platform, Our Impacts and using location-based methodology. In the reporting year, we did not have any certified renewable energy purchase contracts in place, and thus market-based methodology has not been applied. Our energy and carbon emissions are based on our UK operations for the year to 31st July 2025. Electricity and mains gas data is taken from invoices and relates to our offices (individually metered) and vacant investment properties (based on annual apportionment). Where gas consumption is recorded from volumetric meter readings the consumption has been converted into kWh using our software program using the UK average gross calorific value 14.042kWh/kg and the UK average network density 0.796kg/kwh. Fuels for construction plant and company vehicles are based on supplier invoices and converted into kWh again using our software program based on fuel conversion factors published within UK Government Conversion Factors for Company Reporting 2024 2 for fuel density and net calorific value. For business travel, the Group’s financial records were reviewed for any expenses related to car hire, personal car mileage claims and any other fuel consumption which we have direct or indirect control. The related kWh for mileage has been calculated using the conversion factors provided in the GHG Conversion Factors for Company Reporting for the relevant period for the vehicle type, market segment and fuel type. Limitations The energy data for gas and grid electricity data is based on invoice date and not actual consumption for the reporting period; thus, there is a potential for incorrect data cut off, which may affect the energy consumption (MWh) and carbon emissions (tCO 2 e) under Scope 1 and 2. WASTE MANAGEMENT We manage waste in accordance with the waste hierarchy and ensure compliance with all applicable environmental legislation across all our operations. Construction waste is managed through site waste management plans which ensure waste arising is minimised, reused or recycled. Waste reduction is considered at the building design stage and any waste arising in construction is segregated into either on site or off site. Where possible, waste is reused on site and waste to landfill is minimised with preference given to recycling or energy recovery. Training is provided to all staff and subcontractors and waste champions are assigned to each site to ensure compliance with our waste policies and procedures. 1. Environmental Reporting Guidelines: Including streamlined energy and carbon reporting guidance March 2019, published by HM Government 2. https://www.gov.uk/government/collection/government-conversion-factors-for-company-reporting 86197 J Smart Annual Report Text.indd 1186197 J Smart Annual Report Text.indd 11 15/12/2025 14:2515/12/2025 14:25 12 13 J. Smart & Co. (Contractors) PLC REPORT OF THE DIRECTORS (continued) 31st JULY 2025 GOING CONCERN The Group’s business activities, performance and principal risks and uncertainties are set out in the Strategic Report on pages 14 to 63. The Directors having assessed the business risks of the Company and Group as detailed in the Strategic Report on pages 18 to 20 confirm that they have a reasonable expectation that the Company and Group has adequate financial resources without reliance on external funding to allow the Company and Group to continue in operational existence for a period of at least twelve months from the date of approval of the financial statements. The Directors therefore consider the adoption of the going concern basis as appropriate for the preparation of the Annual Report and Statement of Accounts. The Directors have made this confirmation after reviewing the expected cash position of the Group under various scenarios taking into account future trading activities around construction projects in hand and anticipated projects, land acquisitions, rental income, investment property acquisitions and disposals and other capital expenditure. The Directors prepare a number of cash flows to predict the cash position of the Group under these various scenarios. The aim of these various cash flows is to ensure at all times regardless of the scenario the Group remains cash positive thus ensuring the Group does not have to rely on external funding. The Group ensures that all companies within the Group are financially supported by each other and where necessary dividends from cash and reserve positive subsidiaries are paid to the Parent Company to allow that company to provide financial support to all subsidiary companies. There continues to be issues around the increased cost of construction materials and labour costs resulting from global market conditions, cost of living crisis, inflation rates and the impact of global conflicts. There continues to be a lack of social housing contracts due to constraints on availability of funding to the social housing providers for social housing. Delays in obtaining planning approval and confirmation of utility infrastructure on all type of construction developments continue to negatively impact the progress on sites resulting in programme delays and increased costs. Our investment property portfolio however, remains resilient in both the industrial and commercial sectors despite the current economic climate. Rental income growth has been achieved this year and occupancy levels have remained consistent, after accounting for loss of rent from the properties sold at Bellshill and Cardonald. There has also not been any significant defaults in tenants paying rents and the Directors do not believe that this situation will significantly change due to the types of investment properties held. The impact of climate risks on the Company and Group’s business activities are also considered when looking at going concern to ensure that the Company and Group are taking account of new construction materials and techniques which are less carbon intensive were this is possible and to make improvements to our existing investment property portfolio to lower their carbon impact. We are undertaking scenario analysis using a specially designed software package to fully analyse the impact of climate changes in both our construction and investment property activities to enable us to take informed decisions for the future. Full details of the Company and Group’s carbon strategic objectives and our Net Zero Roadmap as detailed in our TCFD report on pages 21 to 61 will assist the Directors in making informed decisions about the Company and Group’s future activities. Although there are issues which have an impact on the finances and operations of the Company and Group the Directors believe that as they can determine the construction work programmes to be undertaken and the management of the investment property portfolio to ensure that the Company and Group are well placed to manage these financial and operational risks. FUTURE DEVELOPMENTS It is not anticipated that the activities of the Company and its Subsidiaries, as described in the Strategic Report, will substantially change in the foreseeable future. 86197 J Smart Annual Report Text.indd 1286197 J Smart Annual Report Text.indd 12 15/12/2025 14:2515/12/2025 14:25 12 13 J. Smart & Co. (Contractors) PLC REPORT OF THE DIRECTORS (continued) 31st JULY 2025 EVENTS AFTER THE REPORTING PERIOD There have been no events occurring after the Statement of Financial Position date that the Directors consider should be brought to the attention of the shareholders. AUDITOR The Company’s auditor, BDO LLP, has expressed willingness to continue in office. Resolutions to re-appoint them as the Company’s auditor and to authorise the Directors to determine their remuneration will be proposed at the Company’s forthcoming Annual General Meeting. CAUTIONARY STATEMENT The Chairman’s Review on pages 4 and 5 and the Strategic Report on pages 14 to 63 have been prepared to provide additional information to members of the Company to assess the Group’s strategy and the potential for the strategy to succeed. It should not be relied on by any other party or for any other purpose. This Annual Report and Statement of Accounts contain certain forward-looking statements relating to operations, performance and financial status. By their nature, such statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors, including both economic and business risk factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. These statements are made by the Directors in good faith based on the information available to them up to the time of their approval of this Report. STATEMENT OF DISCLOSURE TO AUDITOR The Directors who held office at the date of approval of the Report of the Directors, confirm that, so far as they are each aware, there is no relevant audit information of which the Company’s Auditor is unaware; and each of the Directors has taken all steps that they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the Company’s Auditor is aware of that information. BY ORDER OF THE BOARD OF DIRECTORS Patricia Sweeney 20th November 2025 Company Secretary 86197 J Smart Annual Report Text.indd 1386197 J Smart Annual Report Text.indd 13 15/12/2025 14:2515/12/2025 14:25 14 15 J. Smart & Co. (Contractors) PLC STRATEGIC REPORT 31st JULY 2025 The Directors present their Strategic Report of the Group for the year ended 31st July 2025. The purpose of the Strategic Report is to provide the members of the Company with information to allow them to assess how the Directors have performed their duty to promote the success of the Company and Group. OUR BUSINESS MODEL, STRATEGY AND OBJECTIVES The Company was established in 1947 and was listed on the Scottish Stock Exchange in 1965 and was admitted to the London Stock Exchange on 25th March 1973. The principal activities of the Group are building and civil engineering contracting, residential development for sale, the development of industrial and commercial property for generating rental revenue and the provision of serviced office spaces. All construction and investment activities are carried out by the Company and its Subsidiaries. Sub-contracting is kept to a minimum. The main area of operations is the central belt of Scotland. The main construction activity undertaken by the Group is that of social housing for several housing associations and registered social landlords predominately in the Edinburgh area and construction of our own private housing for sale which is undertaken by the Company, J. Smart & Co. (Contractors) PLC. The Group has a portfolio of self-financed industrial and commercial properties which are owned and managed by subsidiary company, C. & W. Assets Limited. The investment properties are located throughout the central belt of Scotland but primarily in the Edinburgh area, this being the area of the country with which we are most familiar. Our portfolio as at 31st July 2025 extends to almost 709,000 square feet. The Group has six other subsidiaries, four of which are trading companies. Thomas Menzies (Builders) Limited carries out small to medium sized building and civil engineering work for a variety of clients. McGowan and Company (Contractors) Limited provides plumbing support to the main construction companies. Cramond Real Estate Company Limited, is the investment holding company of the Group and holds the Group’s equity investments and monies on bank deposits. Smart Serviced Offices Limited, which trades as Foxglove Offices, provides serviced office and co-working spaces in Leith. Concrete Products (Kirkcaldy) Limited ceased to trade in the year to 31st July 2019 and was formally dissolved on 23rd September 2025. Northrigg Limited is a property holding company. The Group also has an interest in two Joint Venture Companies which was established for the purpose of property development and letting. The Group has also entered into a joint venture, in the year, with Manse (Smart 1) Limited but given the percentage shareholding and control in this new Joint Venture Company it is treated as a subsidiary undertaking. The Group operates out of premises in Edinburgh and Kirkcaldy, with the centralised administration and finance function being at the head office in Edinburgh. Full support is given by the company Directors and the finance staff to all Group companies based at the two locations. We maintain a core employee base which is beneficial to the growth and success of the Group due to the fact that they have the expertise to ensure the construction activities of the Group are efficiently run, achieve a high level of quality of work and retain control over operations. Employees who manage the Group’s investment property portfolio are fully aware of current market conditions and ensure that there is appropriate marketing of the Group’s investment property portfolio. We employ our own maintenance team thereby ensuring that our investment property portfolio is always in good condition and ready for let. Our objectives are to identify and exploit promising business opportunities as they arise to the benefit of the Group, its shareholders and employees without over extending Group resources. While endeavouring to complete all our operations as efficiently and to as high a standard as possible we do not set ourselves general performance yardsticks or volumetric targets. To achieve these objectives our strategy is to continue to maintain and develop the relationships we have with social housing providers and develop relationships with new and existing partners to establish new areas of construction opportunities, retain our core workforce and only use specialist subcontractors with proven track records with the Group to ensure work quality. We will continue to build both our residential properties and investment property portfolio within the central belt of Scotland, being the area of the country with which we are most familiar. We will build up our resources to ensure the Group has sufficient current working capital facilities and financing for future commercial and private residential developments. In achieving our objectives we aim to generate value by creating long term and sustainable returns for our shareholders by growing our income and profits and increasing the value of our investment portfolio and the net assets of the Group. 86197 J Smart Annual Report Text.indd 1486197 J Smart Annual Report Text.indd 14 15/12/2025 14:2515/12/2025 14:25 14 15 J. Smart & Co. (Contractors) PLC STRATEGIC REPORT (continued) 31st JULY 2025 PERFORMANCE REVIEW Construction activities 2025) 2024) £000) £000) Revenue . . . . . . . . . . . 16,354) 14.350) Operating loss . . . . . . . . . . . (3,097) (3,968) Construction revenue in the year has increased overall due to the progress of contracts in the year and number of private house sales in the year. Work has continued in the year on the social housing contract at our Clovenstone development, being the 24 flats for Prospect Community Housing and was completed in October 2025 and handed over to the housing association. The work on the private housing at this development has also progressed throughout the year and was completed in November 2025. The sale of all 45 flats have either occurred in the year or are due to conclude by the end of November 2025. All the flats have been sold in 3 tranches to various social housing providers. For both the social housing and private housing elements at this site the Directors considered the carrying value of the contract asset and inventory balances in the financial statements and made required provisions against both amounts. Sales continue to be made at our private housing development at Canal View, Winchburgh but not at the levels we had anticipated this being due to continuing uncertainties in the housing market. In the year to 31st July 2025 we sold 21 properties, giving a total sold of 46 as at 31st July 2025 out of a total of 64 dwellings in the development. Post year end we have sold a further 3 dwellings with a further 4 reserved. Due to the reduced sales prices and incentives introduced in previous years and the duration of time since the completion of this housing development, the Directors considered the carrying value of the inventory balance at the year end and made a required provision against the balance. The work for a third party for a commercial and industrial property was finished in the year and handed over to the customer. Our civil engineering subsidiary, Thomas Menzies (Builders) Limited, has seen a decrease in revenue of £1,163,000 being a decrease of 25% this is due to a lack of work. The level of revenue generated by this subsidiary is insufficient to cover its overheads and therefore a significant loss was suffered by this company. Full details of construction revenue is given in note 3 of the financial statements. Construction material costs continue to remain high for various reasons, including global unrest, inflation rate increases and the overall demand for goods and services causing increases in material and labour costs. The Group continues to monitor costs on construction contracts, with the finance and surveyor teams liaising to ensure accurate recording of cost to contracts and monitoring of actual costs against anticipated costs and anticipated revenue to ensure projects remain on course and reviewing the impact on future costs to complete contracts. The Directors continue to fully appraise contracts, at various stages, prior to acceptance to ascertain the likely outcome of the contract. These appraisals are conducted prior to land bank acquisitions, commencement of construction and then during the lifetime of the contract to its completion. Overheads continue to remain relatively constant in nature over time, however they have increased in monetary terms due to inflationary increases. The Directors do continue to monitor these with a view to achieving any savings on costs where possible. With our revenue levels the recoverability of overhead is difficult. The increased material construction costs together with increased labour costs has resulted in margins being reduced and the impact on the recoverability of overheads incurred by the Group has resulted in the operating loss incurred in the year. 86197 J Smart Annual Report Text.indd 1586197 J Smart Annual Report Text.indd 15 15/12/2025 14:2515/12/2025 14:25 16 17 J. Smart & Co. (Contractors) PLC STRATEGIC REPORT (continued) 31st JULY 2025 PERFORMANCE REVIEW (continued) Investment activities 2025) 2024 £000) £000 Revenue from investment properties . . . . . . . . 6,886) 7,670 Net surplus on valuation of investment properties . . . . . 5,816 994 Loss on sale of investment properties . . . . . . . (49) - Operating profit from investment properties . . . . . . . 8,345) 4,634 Income from financial assets . . . . . . . . . 43) 49 Loss on sale of financial assets . . . . . . . . . (6) (123) Net surplus on valuation of financial assets . . . . . . 186 123 Share of profit in Joint Ventures . . . . . . . 48 320 Overall revenue for investment properties has decreased in the year by 10%. Rental income has decreased by 6% which is mainly due to loss of rent at the properties at Bellshill and Cardonald which were sold in at the start of the financial year. There has been rental growth throughout the portfolio, mainly within our industrial properties, which has mitigated the loss of rent from the properties sold and other vacancies which occurred in the year. Throughout the year, as expected there have been movements of tenants in and out of properties but overall occupancy levels have remained fairly static. Recoverability of rental income continues to remain high and the Group has suffered little in the way of defaulting tenants. Income from service charges and insurance receivable varies from year to year depending on actual expenditure incurred in the year, overall in the year there has been a decrease of 30% in this income. The sale of the two investment properties in the year at Bellshill and Cardonald, which at 31st July 2024 had been transferred to Assets held for sale, resulted in a loss of £49,000 being recognised This year the Group has earned a surplus on the revaluation of investment property portfolio of £5,816,000, due to combined improvement in yields and increased rental. Although there has been a significant increase in operating profit compared to the previous year this is due to the large surplus on revaluation of investment property portfolio, if this was to be excluded then the Group has earned an operating profit of £2,529,000 compared to £3,640,000. This decrease is due to the decrease in revenue of £784,000 and an increase in costs mainly around non-domestic rates which the subsidiary C. & W. Assets Limited has to pay on all vacant properties following the removal of the relief for vacant listed building properties. Work commenced in the year on a new speculative industrial development at Whitehill Industrial Estate, Bathgate consisting of four terraces of industrial units of 14,657 square feet each. Completion of the development will occur in the financial year ending 31st July 2026. Income from our financial assets has decreased from that of the previous year. There were a number of acquisitions in the year to our portfolio of financial assets along with a number of disposals on which the Group suffered a loss of £6,000. Improvements in the world financial markets resulted in a surplus of £186,000 on the fair value of our financial assets being recorded this year. The share of the results in our Joint Ventures is a profit of £48,000 which is significantly less than that of the previous year but in that year there was a profit recognised on the sale of investment properties held by Gartcosh Estates LLP. 86197 J Smart Annual Report Text.indd 1686197 J Smart Annual Report Text.indd 16 15/12/2025 14:2515/12/2025 14:25 16 17 J. Smart & Co. (Contractors) PLC STRATEGIC REPORT (continued) 31st JULY 2025 PERFORMANCE REVIEW (continued) Group results and financial position 2025 2024 £000 £000 Profit before tax . . . . . . . . . . . 6,868 2,365 Net bank position . . . . . . . . . . . 14,980 7,552 Total assets . . . . . . . . . . . 158,335 146,498 Net assets . . . . . . . . . . . 130,603 126,313 Overall the Group has earned a profit before tax in the year which has significantly increased due to the impact of the surplus on revaluation of the investment properties earned this year as opposed that of the previous year. However, if the surplus on the revaluation of investment properties and financial assets are excluded then the profit before tax is £866,000 compared to £1,248,000 in the previous year, as detailed in note 10 of the financial statements. Construction activities continue to suffer operating losses but the level suffered this year has fallen. The profit earned in investing activities has fallen due to loss of rental income and increased cost including the increased cost of rates of vacant property rates. Our net bank position, which comprises monies held on deposit, cash and cash equivalents and the netting of our bank overdraft has increased in the year. This is due to the cash inflow from the sale of the investment properties at the start of the financial year, we have incurred various other inflows and outflows relating to sale proceeds from sales of our private housing and expenditure on construction activities on housing and investment properties for the Group property portfolio. We also, provided loan financing to our new joint venture in the year to allow it to acquire and refurbish the properties in St Andrews, Fife. Overall, the Group continues to be net debt-free. The Group’s net assets have increased by £4,290,000, the main impact being the profits earned in the year, and the movement in the Group’s pension scheme surplus of £2,744,000. The accounting for share buy backs and dividends paid to shareholders in the year also impact on the net assets. TOTAL DIVIDEND The Directors are recommending a final dividend of 2.29p per share which taken with the interim dividend of 0.96p already paid in the year gives a total dividend for the year of 3.25p (2024, 3.23p), which is an increase of 0.6% on the dividend rate for 2024. GREENHOUSE GAS EMISSIONS The Group is required to report the greenhouse gas emissions for which it is responsible and on any environmental matters which are material to the Group’s operations. Details of our emissions for the year to 31st July 2025 are set out in the Report of the Directors on pages 9 to 11. 86197 J Smart Annual Report Text.indd 1786197 J Smart Annual Report Text.indd 17 15/12/2025 14:2515/12/2025 14:25 18 19 J. Smart & Co. (Contractors) PLC STRATEGIC REPORT (continued) 31st JULY 2025 PRINCIPAL RISKS AND UNCERTAINTIES The principal risks and uncertainties faced by the Group and the mitigating factors taken by the Group against these risks are detailed below. The principal risks noted below are not all of the risks faced by the Group but are those risks which the Group perceives as those which could have a significant impact on the Group’s performance and future prospects. Area of principal risk or uncertainty and impact By focusing external construction activities in the social housing sector, which is a competitive market, failure to win new contracts would impact on our volume of work and therefore the workforce required by the Group. Mitigating actions and controls • Maintain long term relationships with social housing providers, resulting from high standards of service, quality and post construction care thus giving the Group an advantage over other builders when contracts are awarded on criteria other than cost only. • Identify potential build sites or include the provider within private housing developments in relation to the element of affordable housing required. • When workload is reduced workforce can be diverted to the Group’s own commercial and private residential developments. • Continue to acquire land for development for either private housing developments or for resale to social housing providers as part of a construction contract. • Develop new areas of construction activities. • Develop new joint venture opportunities. Decline in home buyer confidence, due to bank interest rates, availability of affordable mortgages and cost of living crisis resulting in stalling of private house sales. • Building developments in popular residential areas. • Building high quality specification homes with attention to detail which sets them apart from other new build homes and therefore make them more attractive to buyers. • Building a range of homes within a development thus providing choice to buyers. • Programming commencement of new build housing projects to market conditions. • Providing sales incentives. • Considering the letting of built homes at market rates. Social housing sector and the housing market in general is highly competitive with tight margins. • We are an ‘all trades’ contractor who employs our own personnel in all basic building trades who are supervised by site agents who are long serving employees of the Group, and who have been promoted through their trades, thus ensuring control of labour costs on contracts. • We have invested heavily in plant and the maintenance thereof and therefore limit our costs on contracts by utilising own plant as opposed to incurring higher costs of hiring plant. • Subcontractors employed by the Group are specialists in their fields and in the main subcontractors have previously been used by the Group therefore quality of work and reliability is known. • In house architectural technicians and surveyors provide pre-contract design advice to resolve potential technical problems with the build and therefore potential costs. • Detailed appraisals of contract pre-land acquisiton and pre-construction. 86197 J Smart Annual Report Text.indd 1886197 J Smart Annual Report Text.indd 18 15/12/2025 14:2515/12/2025 14:25 18 19 J. Smart & Co. (Contractors) PLC STRATEGIC REPORT (continued) 31st JULY 2025 Area of principal risk or uncertainty and impact Reduction in rental demand for investment properties may result in a fall in property valuations. Mitigating actions and controls • Only commence speculative developments after careful assessment of the market. • Continue to invest in property sectors which are robust. • Restricting our operations to the central belt of Scotland being the area of the country with which we are most familiar. • Continually maintain and refurbish existing properties to retain existing tenants and attract new tenants and improvements to our properties for improved economic and climate efficiencies. • Provide necessary financial incentives to retain existing tenants at end of current leases and attract new tenants. Reduction in demand for UK real estate from investors may result in a fall in valuations within our investment property portfolio, this could result in delays in investment decisions which could impact on our activities. • The Directors regularly review the property market to ascertain if changes in the overall market present specific risks or opportunities to the Group. • Restricting our operations to the central belt of Scotland being the area of the country with which we are most familiar. Reduction of financial resources. • Ensure resources are not over committed and only undertake commercial and private housing developments after due consideration of the financial impact on the Group’s financial resources. • Build up resources to ensure the Group has sufficient finance for working capital requirements and financing of commercial and private housing developments. • Spread cash reserves over several banks taking account of the strength of the bank and interest rates attainable. • Invest resources in equities also taking account of the security of the investment and the yields attainable. Political events and policies result in uncertainty until final decisions have been made and the impact of decisions are known, this could result in delays in investment decisions which could impact on our activities. Including Local Government processes slowing down our ability to commence new building projects. • Before any decisions are taken by the Directors in any area of the Group’s activities the level of uncertainty and range of potential outcomes arising from political events and policies are considered. • Monitor Government guidelines and new legislations announcements to ensure the Group remains up to date with legislation. • Continue to pursue contacts at Local Government to obtain necessary consents and planning approval. Failure to evolve business practices and operations in response to climate change. • Continue to monitor all requirements relating to the construction industry in relation to improvements in buildings to ensure they comply with current and emerging requirements. • Review of designs for new buildings to ensure they are as energy efficient as possible. • Procurement of building materials from sustainable sources. • Investment in energy saving measures within our investment property portfolio. • Establishment of Sustainability Committee to develop the Group’s sustainability strategy with the commitment to reduce the Group’s carbon emissions in line with science-based carbon reduction targets. • Employ the services of external specialists and consultants for their expertise. PRINCIPAL RISKS AND UNCERTAINTIES (continued) 86197 J Smart Annual Report Text.indd 1986197 J Smart Annual Report Text.indd 19 15/12/2025 14:2515/12/2025 14:25 20 21 J. Smart & Co. (Contractors) PLC STRATEGIC REPORT (continued) 31st JULY 2025 Area of principal risk or uncertainty and impact Unforeseen national and global events including world conflicts and natural disasters. Impact of cost of living crisis, increased inflation and bank interest rates. Mitigating actions and controls • Establish strong relationships with suppliers and subcontractors to ascertain impact on their potential supply chains. • Build up financial resources to ensure the Group has sufficient funds for future working capital requirements. • Establish continuity plans for all areas of operations. • Retain strong control over costs on construction contracts. • Remunerate onsite and office based employees with competitive rates of pay and benefits. PRINCIPAL RISKS AND UNCERTAINTIES (continued) Emerging risk The Group faces a number of emerging risks which could have a significant impact on the Group’s performance and future prospects. These risks are discussed by the Directors and appropriate actions taken to mitigate these risks as soon as they are considered to be a principal risk of the Group. VIABILITY STATEMENT The Directors have assessed the viability of the Group over a three year period to July 2028, taking account of the Group’s current financial strength, business model and strategy. The Directors have also taken account of the principal risks and uncertainties facing the Group and the actions being taken to mitigate these risks as described above. The assessment period of three years has been chosen as the Directors consider this period to be appropriate as it fits well with the Group’s development and investment property cycles. The Group’s financial planning process consists of cash flow projections based on the current financial position together with current commitments and then assumptions on future developments and investment property acquisitions and disposals. As the Group is net debt-free the Directors are assessing the cash impact of their assumptions of future activity to ensure that this position is maintained. The Directors vary their assumptions in terms of economic, investment and other factors to different scenarios to assess the impact on the Group’s cash position. Even with these sensitivities applied the Group remains net debt-free. Based on this assessment the Directors have a reasonable expectation that the Group will continue in operation and meet its liabilities as they fall due over the period to July 2028. TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES As a Group, J. Smart & Co. (Contractors) PLC already follow prudent principles in relation to our business activities. We will continue to refine and re-focus our objectives to ensure compliance with the Task Force Climate-related Financial Disclosures (TCFD) requirements and embed TCFD into our governance, strategy and risk mitigation going forward. We support the essence of TCFD, and recognise the importance and impact of climate change, which is reflected within our Sustainability Strategy. Following the reporting of 2022/23 emissions data, we debriefed the process and from learnings we have reviewed our data collection and preparation process and applied more specific emission factors to our carbon accounting methodology. To provide the most accurate information possible, we have invested in two software platforms; Our Impacts by Eco Online and Earth Scan by Mitigia. These along with improvements in data collection of our 2024 Greenhouse Gas Emissions and TCFD metrics, provide a more robust and reliable basis for ongoing data analysis and monitoring performance. As a result of the outcomes of data work in 2023/24, we have taken the decision to set the current year data as our baseline, against which all future carbon impacts and metrics will be compared. The prior year was the Group’s initial disclosure under TCFD Metrics and Targets pillar, and with the learnings we have decided it is not beneficial to allocate time, resources and costs to rest ate 2022/23 data. The Board confirms that it has complied, where applicable, with the Listing Rule requirements as per UKLR 6.6.6(R)(8) for the disclosures for TCFD. As identified last year, the Board recognised that some TCFD recommended disclosures required further development. To develop and improve the disclosures within the relevant pillar, we have progressed our data management practices through the introduction of comprehensive software, developed our Net Zero roadmap and enhanced our scenario analysis capabilities. Disclosure Alignment with Compliance Requirements Actions Year Recommendation Disclosure: Disclose the organisation’s governance around climate related risks and opportunities. (a) Describe the board’s oversight of climate related risks and o pp ortunities. Full (b) Describe the management’s role in assessing and managing climate- related risks and opportunities. Full Disclosure: Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning where such information is material. Recommendation (a) Describe the climate-related risks & opportunities the organisation has identified over the short, medium, and lon g term. Full (b) Describe the impact of climate-related risks & opportunities on the organisation’s business strategy, & financial planning Partial Continue to progress our carbon reduction target of 30% by 2030 to align to Science Based targets initiative and reflect the financial impacts of our Net Zero roadmap into the Group's financial planning process. A more detailed climate-related risk assessment for material aspects of the business will be conducted in 2025 The potential impacts on financial performance will be estimated where possible. 2025 86197 J Smart Annual Report Text.indd 2086197 J Smart Annual Report Text.indd 20 15/12/2025 14:2515/12/2025 14:25 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 21 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES As a Group, J. Smart & Co. (Contractors) PLC (the Group) adheres to prudent principles across all areas of our business. We remain committed to refining and re-focusing our objectives to ensure continued alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We are embedding TCFD principles within our governance frameworks, strategic planning, and risk management processes. We support the core purpose of the TCFD framework and acknowledge the significant impact of climate change, reflected in our overarching Sustainability Strategy. The Board confirms that, where applicable, it has complied with the TCFD disclosure requirements set out under UK Listing Rule 6.6.6(R)(8). As noted in the prior year, the Board identified specific areas where further development was required to fully align with certain TCFD recommended disclosures. In response, we have made meaningful progress in 2024/25, particularly in enhancing our risk management framework and assessing the financial impact of climate-related risks and opportunities. These developments are evidenced through our updated Strategic Objectives, comprehensive Scenario Analysis, and robust Climate Risk Assessment work. The progress towards compliance is reflected in the table below. Not Compliant Partially Compliant Fully Compliant Disclosure and Recommendations Compliance Actions Year Status GOVERNANCE Disclosure: Disclose the organisation’s governance around climate-related risks and opportunities. (a) Describe the board’s oversight of climate- related risks and opportunities. Page 23 (b) Describe the management’s role in assessing and managing climate-related risks and opportunities. Page 23 STRATEGY Disclosure: Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning where such information is material. (a) Describe the climate-related risks & opportunities the organisation has identified over the short, medium, and long term. Pages 27 to 29 (b) Describe the impact of climate-related The potential impacts on financial 2027 risks & opportunities on the organisation’s performance will be estimated business strategy and financial planning Pages 27 to 29 where possible. 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 22 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Disclosure and Recommendations Compliance Actions Year Status RISK MANAGEMENT Disclosure: Disclose how the organisation identifies, assesses, and manages climate-related risks. (a) Describe the organisation’s processes Continuing to refine and enhance our 2025 for identifying and assessing processes for assessing and managing climate-related risks. climate-related risk, particularly the impacts of financial planning and Pages 31 to 34 data processing. (b) Describe the organisation’s Development of implementation 2026 processes for managing climate-related plans for each strategy objective and to 2028 risks. associated risks. Progress of adaption plans for risk mitigation, and relevant metrics and targets will be reviewed by the sustainability committee and Pages 34 to 44 board (c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management. Pages 31 & 32 METRICS AND TARGETS Disclosure: Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material. (a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process. Page 49 (b) Disclose Scope 1, Scope 2, and if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. Pages 56 & 57 (c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. Pages 50 to 54 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 23 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Governance 2024/2025 focus: Set up a Working Group to identify further climate-related risks and opportunities. During the year extensive work has been undertaken on climate-related risks, as outlined under Climate Risk Assessment on page 32. The Group understands that climate change can present risks and opportunities to our business activities, our employees and our other stakeholders. The Board oversees the Sustainability Strategy, which details risks, opportunities, and identifies objectives. The Strategy also addresses the carbon impact of our construction activities, operations and investments. It provides details of our objectives going forward, including our efforts to reduce our carbon impact and operate more sustainably in all aspects of our business. The Board met 4 times throughout the year where climate-related risks and opportunities were discussed, with actions considered and implemented where appropriate. The Board Director responsible for climate related issues is our Chairman and Joint Managing Director, David W Smart, and the Director who leads the delivery of the sustainability strategy is Jane Oliver. Our Chairman oversees the internal management of J. Smart & Co. (Contractors) PLC’s climate-related risks, opportunities and strategy-setting process, and receives updates on climate-related activities and developments throughout the business. These updates are reported by the Sustainability Committee. The Sustainability Committee is formed of representatives from across the business including the Joint Managing Director, Development Director, and members of the Real Estate and HR Teams. The Committee collaborates to identify, assess, and manage our response to climate-related risks and opportunities. The Committee works closely with employees throughout our Group to implement and enhance programmes and policies addressing climate-related risks and opportunities for J. Smart & Co (Contractors) PLC. The Committee reports to the Board quarterly with its recommendations and provides progress updates on targets and objectives. Our Board oversees the integration of climate-related opportunities and risks, including environmental and climate-related impacts, into corporate risk assessment activities and audit functions. 2025/2026 focus: The Board will regularly review the progress and performance against the new strategic objectives through the measurement and monitoring overseen by the Sustainability Committee. # 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 24 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Strategy 2024/2025 focus: Continue to progress our carbon reduction target of 30% by 2030 to align to Science Based targets initiative and use climate and emissions analysis software (EcoOnline and Earthscan) to assess the financial impacts of the scenario analysis for physical risks and the potential government policy developments around transitioning to low carbon-built environment. Our strategy is guided by our commitment to long-term sustainable growth, creating value not only for our shareholders, but also for our employees, partners, and the communities where we operate. We recognise that responsible business practices and resource management are fundamental to the resilience and success of our Group. These principles underpin our decision-making and shape how we identify and respond to both emerging risks and opportunities in an evolving landscape. The strategic objectives support the Group’s mission to be a leading developer/contractor for low carbon and climate resilient developments by setting ambitious strategic objectives across the Group’s property development, construction and internal operations. Objectives cover climate mitigation as outlined in our net zero roadmap to reduce carbon emissions by 30% by 2030, aligned with the Science Based Targets initiative (SBTi); and climate adaption to deal with physical risks under different climate scenarios and transition risks from changes in regulations, market, technology and reputation. Incorporating climate mitigation and adaptation objectives into our strategy will ensure our business remains resilient and competitive in a low-carbon economy. During the year the Sustainability Committee and the Board conducted a comprehensive review of the impacts of climate change on the Group’s strategy and operations. The review encompassed in-depth stakeholder materiality assessment, assessing climate risks and opportunities across the different business segments and operations, and augmentation of our net zero roadmap. As a result of the review, a more extensive set of objectives, than those set in 2023, along with defined metrics and targets, are outlined on pages 31 and 32. We have made further progress in integrating the impacts of climate-related risks and opportunities into our financial planning processes. These considerations will increasingly form part of our cash flow modelling and Board-level risk analysis discussions. At present, the financial impacts of identified climate-related risks and opportunities are based on qualitative analysis which guides our future carbon-related financial decisions. We will continue to work on seeking data to reliably quantify the financial impacts of the highest rated climate-related risks the Group is potentially exposed to. Climate Scenario Analysis Our Climate Scenario analysis is under constant development for the two scenarios of Paris aligned <2 o C and > 2 o C for our current business activities and processes. For physical risk, we continue to invest in Earthscan climate software to assess our exposure the six common risks of heat stress, precipitation, drought, flooding, wind risk and wildfire. Although for transition risks conducting scenario analysis is more challenging, we review information provided by Committee on Climate Change, Scottish Water Climate Change Adaptation Plan 2024 and Carbon Action Tracker, amongst other sources to support analysis. For scenario analysis of physical risks, Earthscan, a geospatial mapping tool, evaluates six physical risks for each of our property assets, such as office buildings and Estates - as well as operational sites. This analysis spans three climate scenarios: • Business as usual • Emissions peak by 2040 • Paris-aligned <2 o C These are evaluated across short-term (2025), medium-term (2030), and long-term (2050) horizons; consistent with the time horizons in the climate risk assessment disclosures. J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 25 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Strategy (continued) Scenario analysis is also informed by engagement with various stakeholders as outlined below and on page 26, and from the climate risk assessments conducted under the different climate scenarios as outlined above. As part of our overall governance framework for assessing, managing and responding to changes in climate-related risks and opportunities and the financial impacts, we will annually review our strategy and objectives and adjust as necessary. 2025/2026 focus: Implementation plans for each strategic objective, including ownership, specific timelines and actions. Continue to obtain further information to support scenario analysis for transition risks Stakeholder Assessment Our new strategic objectives were informed from the in-depth stakeholder engagement we conducted during the year. The engagement was conducted through desktop research, surveys, and interviews to assess the sustainability and climate change matters most important to them. These matters were reviewed by the Sustainability Committee and their relative impact on the Group’s operations, property development and construction activities were rated. The matrix below captures the main themes which are weighted based on the relative importance of the stakeholder group to determine the impact on our activities. Ref Theme Description Relevant Stakeholders 1 Property location Provisions of properties in desirable Commercial Property locations for transport, facilities, etc Tenants 2 Lease costs Affordable leases for the target market Commercial Property that have low operating costs Tenants 3 Forward looking compliance TCFD Compliance regime and Banks (TCFD) to secure funding reporting that we are proactively managing and monitoring Climate Change impacts 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 26 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Stakeholder Assessment (continued) Ref Theme Description Relevant Stakeholders 4 Cost of transition to Net Zero Unclear regulatory and policy direction Major Suppliers and with the cost of investing in low carbon Subcontractors new technologies, fuels and materials leading to a lack of action/ apathy despite awareness. 5 Resource efficiency & recycling Reducing consumption of finite Employees resources and getting the most out of resources, including recycling/reuse 6 Gender equality and diversity, Ensuring that all employees are Employees and JV Partners including social aspects of ESG supported fairly and can reach their potential by minimising barriers and unconscious bias 7 Sourcing of sustainable materials Managing supply chains to seek Employees, Major Suppliers alternative materials with lower and Subcontractors environmental impact, longer life span, and locally sourced 8 Employee engagement and involvement Providing formal and informal forums Employees for all employees to voice ideas and concerns to act 9 Engaging with sustainable Collaboration with designs, materials, Major Suppliers and construction methods costs and mitigate emissions and Subcontractors adaption to climate change impacts 10 Tenant's commitment to Net Zero A clear expression of need to transition Commercial Property to a low carbon business Tenants 11 Net Zero transition by 2030 A transparent and comprehensive Net Banks, Insurers, JV Partners Zero roadmap that responds to risk and and Employees opportunities, which outlines financial impacts with transition to Net Zero 12 ESG practices /policies Overarching programme of corporate Banks, Insurers, JV Partners governance that includes management, and Employees policies and practices to reduce risks and gain benefits 13 Paying a premium - “Eco” upgrades Willingness of tenants to pay a Commercial Property premium for energy efficiency Tenants 14 Environmental benefits of property Provision of low-carbon properties Commercial Property that support a tenant’s ESG policy Tenants J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 27 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Strategic Objectives to 2030 The strategic objectives, outlined in the table below, direct the Group’s actions for the next five years. These objectives are formed from a comprehensive review of the stakeholder materiality assessment on page 26 and 27 climate related risks impacting commercial property, construction, site activities and our internal operations on pages 34 to 44. The strategic objectives are aligned to business segments; and for each objective we have identified how to measure progress (metrics) and established targets, where possible. We recognise that for several objectives a target is still to be set, which is partly due to establishing data collection and baseline data to quantify a realistic though ambitious target. Group and Head Office Strategic Objective Progress measured by Target 1. Board regularly assess exposure • Quarterly review of metrics and climate risks 2026 to climate change risks and financial impacts 2. High quality emissions data is prepared • % emissions data and relevant KPIs/metrics 50% by 2026 for Board and Sustainability Committee. prepared quarterly and considered reliable 75% by 2027 >90% by 2028 3. Ensure our internal operational carbon • Operational Carbon intensity by GIFA To Be impact is aligned with the carbon kgCO 2 e/sqft) Confirmed reduction of our developments 4. Maintain regular engagement with Key • % of key stakeholders engaged (major 25% by 2027 Stakeholders to proactively understand suppliers and subcontractors) 50% by 2028 key issues to ensure competitive supporting low carbon development 75% by 2029 advantage >75% by 2030 • % of selected key commercial property tenants engaged, for leased floor area > 10,000sqft 5. Staff understand low carbon progress • % of staff who can understand the key 25% by 2027 of J. Smart & Co. (Contractors) PLC aspects of climate change and how 50% by 2028 and its ambition J. Smart & Co. (Contractors) PLC 75% by 2029 are taking action. Conduct annual >75% by 2030 surveys with specific questions on strategy. • % of employees who participate in sustainability training and /toolbox talks/ presentations. • Number of employee suggestions shared with the Board. . By 2027, ¼ of suggestions received presented to Board. 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 28 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Strategic Objectives to 2030 (continued) Group and Head Office (continued) Strategic Objective Progress measured by Target 6. Continuation of decarbonisation of • Investment Carbon intensity for Scope 1 and Further 10% investment portfolio 2 emissions from external equity holdings from 2025 kgCO 2 e/$m invested) by 2027. Further 10% from 2027 by 2030. 7. Reduce carbon emissions to transition • Reduction for all emissions measured 30% by 2030 towards Net Zero as aligned to and reported as at 31 July 2024. science-based targets subject to the provision of data from 3rd parties beyond our control ** Gross Internal Floor Area Property Development and Construction Strategic Objective Progress measured by Target 8. Strengthen climate resilience of • % GIFA for properties that have a flood risk 15 % by 2027 commercial developments with GIFA > rating: E in 2035, and adaptation 30 % by 2028 10,000sqft measures planned 50 % by 2029 • % GIFA for properties that have a heat stress >75% by 2030 risk rating: E in 2035 and adaptation measures planned. 9. Rebalancing of developments to • Refurbed development as a proportion of 12% by 2030 including greater emphasis on all developments by GIFA (sqft) 20% by 2035 refurbishment developments 10. Continue to strengthen position in • Embodied Carbon intensity by Targets to be set private housing development market GIFA kgCO 2 e/sqft) in 2026-2027 (flats/detached housing) while reducing carbon intensity • In use carbon intensity by GIFA kgCO 2 e/sqft) • In use carbon intensity by GIFA kgCO 2 e/sqft) • In use energy intensity by GIFA kWh/sqft) 11. Continue to strengthen position in • Embodied Carbon intensity Targets to be set Commercial development market by GIFA kgCO 2 e/sqft) in 2026-2027 (offices/industrial) while reducing • In use carbon intensity by GIFA kgCO 2 e/sqft) carbon intensity • In use energy intensity by GIFA kWh/sqft) J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 29 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Strategic Objectives to 2030 (continued) Site Activities Strategic Objective Progress measured by Target 12. Transition from fossil fuel to low • Carbon intensity tCO 2 e/£m of plant Targets to be set carbon fuels for construction plant in 2026-2027 13. Improve the planning of the plant • Carbon intensity tCO 2 e/£m of plant Targets to be set required to achieve greater energy in 2026-2027 efficiency 14. Improve strategic planning to • Waste generation for clearing Targets to be set minimise waste generation from development land (tonnes/acre) in 2026-2027 developments • Waste generation for construction phase by GIFA (tonnes/sqft) • Waste diverted from landfill 99% by 2030 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 30 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Review of Strategic Objectives to 2025 The information below provides a status update on the objectives set out in the TCFD disclosures reported for the year ending 31st July 2023. Objective Target Actions/Status Outcome Reduce the carbon 10% of total steel • Total steel purchased: 238 tonnes • We have exceeded intensity of raw purchase is green by • Recycled (green) steel our 2025 target, materials 2025. used: 76.16 tonnes. achieving 32% green steel usage. Monitor exposure to Assess and manage • Conducted a comprehensive • No assets are currently flood risk for vacant flood risk using review of all Group property rated E or F for flood risk. land sites Earthscan across all holdings—including leased property holdings, assets, operational properties, including vacant land, and vacant land, using the using data-driven tools Earthscan platform to assess to inform adaptation exposure to flood and and mitigation measures climate-related risks. where appropriate. • Risk Assessment Criteria: For any assets rated E or F, we will evaluate the financial and commercial viability and consider required resilience measures. Decarbonise investment Achieve a 10% • Proposed new investments are • Achieved: The carbon portfolio reduction in the carbon aligned with our climate intensity of equity intensity of the strategy and will continue investments has decreased investment portfolio to support further reductions by 21% since 2023. by 2025. in carbon intensity across the portfolio. Explore renewable Increase renewable • Feasibility Study Completed: • Review in progress to energy strategy to energy generation A detailed assessment of evaluate the technical property portfolio across our property suitable properties has identified feasibility, portfolio to support a potential solar PV generation implementation strategy, decarbonisation. capacity of 1,023 kWp across and associated cash the portfolio. flow implications. • Prioritisation of sites based on roof suitability, energy demand profiles, and return on investment. J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 31 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Review of Strategic Objectives to 2025 (continued) Objective Target Actions/Status Outcome Transition to low carbon Transition to • Explore the hire of modern, • Carbon intensity for plant alternatives for plant and Hydrotreated Vegetable low-emission equipment fuel has fallen by 20% machinery Oil (HVO) and battery as an alternative to purchase. since 2024. storage for plant and • Ensure all procurement welfare facilities to decisions to consider reduce diesel and prioritise low-carbon consumption by 40% alternatives. by 2026. Digital Transformation: Implement digital IT • Microsoft 365 Migration • Full migration to to build upon & improve systems and provide • Training to be rolled out Microsoft 365 completed. data management, data training to our to cover the full functionality • Awareness on how to use analysis, digital working employees by 2025. of Microsoft 365. Microsoft 365. practices and procure the • Full integration of EcoOnline • Enhanced data relevant skill sets and EarthScan management, decision- required to implement making and environmental compliance. Continually strive Increase diversion • Implementation of a Waste • We achieved a 98.8% towards Zero Waste to from landfill to Management Policy diversion from landfill. landfill - Increase 22.5% by 2025. Clear procedures were Diversion from Landfill established for handling, to 22.5% by 2025 segregating, and disposing of waste, aligning site operations with best practices. • Collaboration with Waste Contractors: Improved data granularity to better track waste streams and classification. Risk Management & Corporate Risk 2024/2025 focus: Continuing to refine and enhance our processes for assessing and managing climate-related risk, particularly the impacts of financial planning and data processing. Climate change is a principal risk in the Group Risk Register. We have formal ongoing processes to identify, assess and analyse risks. These risks are fully explained in our risk section in our Principal Risks and Uncertainties section of the Strategic Report on pages 18 to 20 of the financial statements. For 2024/2025, we undertook comprehensive work to assess our climate-related risks and their implications for financial planning; this is outlined below in our Climate Risk Assessment. While we acknowledge that this process is subject to future quantification, we believe the understanding of impacts on financial position and performance for climate-related risks assessed as HIGH. We consider ourselves fully compliant in this area. 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 32 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Risk Management & Corporate Risk (continued) The assessment work has been led by our Chairman and Joint Managing Director, David W Smart, with input from members of the Board and specialists. Our holistic approach ensures that the assessment has captured expertise and knowledge in both depth and breadth. The outcomes of this work have enabled a more systematic evaluation of risks and opportunities, which the Board has reviewed and considered in its strategic decision-making and risk mitigation efforts. As part of our ongoing commitment to enhancing the quality of data and analysis around climate-related risks, we have continued our use of the EarthScan platform. Earthscan is an effective tool to understand our physical risk through incredibly detailed information on our operational properties and our leased assets portfolio’s exposure to climate risk. It brings together world-leading climate science, data modelling, and machine learning to help us comply with disclosure requirements as well as informing investment decisions across time horizons and future climate scenarios. We have maintained a strong focus on improving carbon emissions data, building on progress made in the prior year. This has involved streamlining data collection across departments and enhancing internal processes for data validation and consolidation. In 2024/2025, the Sustainability Committee continued to produce a quarterly Sustainability Report, submitted to the Board for review and discussion. This report provides updates on the Sustainability Risk Register & Opportunities, progress against our Strategic Objectives and performance on our Key Metrics and Targets. The report highlights progress made, identifies any barriers to achievement, and outlines areas where Board support or intervention may be required. This structured reporting process enables a consistent and timely assessment of climate-related risks, objectives, and targets. It ensures that emerging issues are identified promptly, and that the Group’s overall risk management approach remains active, responsive, and continuously reviewed at Board level. 2025/2026 focus: We will continue to enhance our processes for assessing and managing climate-related risks, with a particular focus on their impact on financial planning and long-term business resilience. This includes continued development of climate scenario analysis and considers the impacts on strategic and financial decision-making. For the highest-level climate risks, we will work on obtaining suitable data to reliably quantify the financial impacts of those risks, and relevant adaptation measures. Climate Risk Assessment This section outlines further details about the climate risk assessment led by our Chairman and Joint Managing Director, covering the time horizons, methodology and specific risks rated HIGH under the two climate scenarios. Through a series of workshops, physical and transition risks were considered for the prioritized business areas: commercial property, construction and site activities. The detailed assessment considered how both physical and transition risks impacted construction programmes, use of materials, operation of plant, our workforce, movement of goods and people, suppliers and subcontractors, as well as our tenants. The time horizons, as summarised below, can differ by business segment and reflect the development of timescales and cyclical nature of the business. We define time horizons as follows: • Short relates to the standard development cycle from planning consent being granted to completion; • Medium relates to site identification through purchase to the submission of planning application; and • Long relates to expected period that investment properties are held. J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 33 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Climate Risk Assessment (continued) Methodology Assessing the risk of climate related hazards for physical and transition risks on the Group's activities used the risk matrix outlined below. In assessing risks, a rating for likelihood and expected impact were assigned to each identified risks for Commercial Property, Construction and Site activities. The multiplication of likelihood and impact scores provided a risk rating score (1-25). Furthermore, each risk was assessed if its impact was Acute (immediate and short-lived) or Chronic (likely to be long- term irreversible trend) and allocated a risk type (physical or transition). Likelihood: 1. Almost Impossible / Rare: Very unlikely to occur. 2. Unlikely: Could happen but not expected. 3. Possible / Occasional: Might happen from time to time. 4. Likely: Expected to happen in many situations. 5. Almost Certain: Very likely to occur. Time Horizon Physical Risk Transition RisksPeriod Short Unpredictable weather events; and surface water flooding Government Policy & Market demands for low carbon commercial properties. Regulations relating to decarbonisation of transport & the expansion of low emission zones. Availability of low carbon materials & technologies that are financially viable to meet market requirements. Within 3 years Medium Increase demand for cooling from higher summer temperatures, and impacts of flooding across the business Continuation of market expectations to use low carbon buildings. Planning regulations for decarbonisation of the built environment. Availability of low carbon materials & technologies that are financially viable to meet market requirements. 3-10 years Long Increase in extreme weather events (100 return rate) more likely by surpassing 2 o C To be assessed more fully in the coming year and relate to the market valuation of investment properties traditionally held for 50 years. The investment strategy will be reviewed in the coming year. 10-50 years V#>''-# V5#!<.'"/# 19&/$;3# # # # # # T5#7;F9<9# # # # # # R5#L3<;F9<I# # # # # # d5#N$&9# # # # # # # W# Q3";@3;=;4$3/# C# ;3'&# O# -;@3;=;4$3/# E#$B'&# G# [f/&9.9# # XRQ51T# 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 34 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Climate Risk Assessment (continued) Methodology Impact: 1. Insignificant: No real disruption; little or no cost or downtime. 2. Minor: Small disruption; manageable with routine resources. 3. Moderate: Noticeable effect on operations or costs; requires supervisor involvement. 4. Major: Significant disruption or financial loss; needs formal management and mitigation. 5. Extreme: Major business impact; could threaten business continuity. Risk Levels: 1. 1–6: Low (Acceptable) – No immediate action; monitor routinely. 2. 7–12: Medium – Monitor annually; and consider adaptation measures. 3. 13–25: High – Plan adaptation measures required within the next 5 years; assign Board ownership and track progress. Risk Assessment for a < 2°C Climate Change Scenario The risks assessed as HIGH, under a 2°C climate change scenario are summarised in the table below. For each risk item, the associated strategic objectives (SO) are cross-referenced to indicate how the risk is managed and monitored; an intensity rating of Acute and/or Chronic is assigned; the risk type(s) and time horizon(s). For the intensity rating, Acute means immediate but short lived where the Group will adapt to the initial change, whereas Chronic refers to a change that occurs over time and will persist requiring continual adaptation. RISK ITEM FINANCIAL IMPACTS INTENSITYADAPTATION ACTIONS Surface Water flooding - existing drainage capacity can manage flash flooding- cost of retrofit drainage. SO: 8 • Increase in capital expenditure • Reduce operational cost through use harvested rainwater • Property asset value may increase due to robust flooding management systems and strengthened climate resilience • Potential revenue increase through reduced vacant periods by making properties more attractive because of climate resilience Acute RISK TYPE Flooding TIME HORIZON Medium• Assess properties without attenuation flood management in place • Investigate nature based solutions, such as blue green infrastructure (BGI), to reduce peak flow • Investigate voluntary SuDS systems • Using drainage system as storage • Investigate rain harvesting and grey water systems to reduce discharge flow levels • For existing properties, retrofit flood barriers • Replace car park surfaces with porous material • Explore internal climate resilience fund to help mitigate costs of climate adaption measures J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 35 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Climate Risk Assessment (continued) Business Area: Commercial Property RISK ITEM FINANCIAL IMPACTS INTENSITYADAPTATION ACTIONS Water course flooding - location specific, raising water table and flash flooding. SO: 8 • Property asset value may increase due to robust flooding management systems and strengthened climate resilience • Potential maintenance costs for flood barriers etc • Increase in capital expenditure Acute RISK TYPE Flooding TIME HORIZON Medium Long • For existing at risk properties, retrofit flood barriers • Investigate water pumping mechanisms • Seek specialist flood management consultancy services • Explore internal climate resilience fund to help mitigate costs of climate adaption measures Changes in Energy Efficiency Regs <1000m2 (multi-let industrial units). SO: 9 • Increase in capital expenditure • Reduced risk of stranded assets • Potential to protect or enhancing revenue • Expenditure on external consultancies to perform EPCs • May lead to more frequent use of plant and machinery, which means increased hire costs • Potential lower risk of asset obsolescence from electric plant • Electric plant will lead to the installation costs of charging facilities • Onsite battery storage may lead to an increase in insurance premiums, due to capital expenditure or fire protection. Chronic Policy/ Regulation Medium• The Group plans to monitor regulation and announcements for changes to EPCs and to adapt accordingly • Explore renewable energy and energy efficiency funding opportunities • Investigate Over cladding on industrial units • Explore internal climate resilience fund to help mitigate costs of climate adaption measures New regulations (i.e. ULEZ) could result in restrictions on fossil fuel powered plant in urban areas leading to obsolescence. SO: 9, 11 Acute (initial adaptation) Chronic (expected continuous change in regulatory thresholds) Policy/ Regulation Medium• Monitor Local Authority and Scottish Government policy, and plan for renew and replacement programme of old gas heating systems to balance financial costs • Continue to explore cleaner alternate fuel use opportunities • Higher proportion of electric plant and machinery for developments in Ultra Low Emission Zone (ULEZ) • Explore onsite renewable opportunities in conjunction with battery storage • Explore internal climate resilience fund to fund climate adaption measures 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Climate Risk Assessment (continued) Business Area: Commercial Property (continued) 36 RISK ITEM FINANCIAL IMPACTS INTENSITYADAPTATION ACTIONS Increase in energy use to ensure comfortable working environment. SO: 9, 11 • PV will reduce energy costs for common areas • Potential changes in services charges to tenants • Increased capital expenditure for solar PV and energy efficient equipment and heating/cooling systems • Reduce the risk of "stranded assets" that are not suitable for retrofit • Divest outlying uneconomic / obsolete assets where not cost effective to upgrade / refurbish Chronic RISK TYPE Extreme Heat +26 o C TIME HORIZON Short Medium • Review Retrofit programme to include Air Source Heat Pumps, heating dead zones, insulation, Restriction on listed building • Explore solar PV for common areas in office buildings • Installation of canopies to shade certain areas • Refurbishments, including air handling systems, such as Mechanical Ventilation Heat Recovery New build offices extended /longer programme; more onerous build regulations (insulation); new technologies for passive cooling. SO: 11 • n/a Acute Extreme Heat +26 o C Long • Industrial - easier to manage Offices - more complicated • Monitor for changes in regulation, and in the market, and react accordingly J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 37 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Climate Risk Assessment (continued) Business Area: Construction (continued) RISK ITEM FINANCIAL IMPACTS INTENSITYADAPTATION ACTIONS Requirements for recycled aggregates SO: 10, 11, 14 • Potential to stockpile quality recycled aggregates to mitigate supply/cost vagaries • Increased transportation costs due to fewer suppliers • Increased capital expenditure for internal crushing infrastructure • Increase risk and cost of poor-quality aggregate, which could lead to a delay in programme • Increase in market demand for recycled aggregate could lead to difficulty acquiring materials for internal crushing Acute RISK TYPE Market, Reputation Policy/ Regulation TIME HORIZON Medium Long • Explore the expansion of the internal production of recycled aggregate • Implement a more robust monitoring regime on incoming materials • Perform independent material testing Potential disruption to supply of timber, impacted by fires, disease, drought, etc. SO: 4 • Timber from different regions could lead to increased costs • Engineered timber bears an uncertainty in cost • Installation cost impact on fire resistance measures Acute Market Medium Long • Review climate risk of forests of timber suppliers • Investigate multiple supply from different regions • Regular engagement and collaboration with suppliers to assess potential disruption • Move to ‘fast-grown’ timber when quality is not critical Regulations will drive thresholds for embodied carbon for new build in Scotland (tCO2e/m2) SO: 10, 11, 14 • Lower carbon materials may lead to higher production costs • Time spent assessing embodied carbon etc • Increased workload may require recruitment and training within current teams Acute (initial adaptation) Chronic (expected continuous change in regulatory thresholds Market, Reputation Policy/ Regulation Medium• Exploration of lower carbon materials • Assessing current embodied carbon of representative properties and compare to expected regulatory thresholds from other EU countries / RICS, NET Build Council • Regular monitoring of Scottish Government Policy on Regs and SPF and HFS industry bodies 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 38 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Climate Risk Assessment (continued) Business Area: Construction (continued) RISK ITEM FINANCIAL IMPACTS INTENSITYADAPTATION ACTIONS Cost of Net Zero Transition for Major Suppliers SO: 4 • Time investment required for supplier engagement and vetting • May increase costs for suppliers meeting Net Zero criteria • Market pressure on low-carbon suppliers could raise costs to the Group • Potential introduction of carbon taxes – cost will inevitably be passed on to the Group Chronic RISK TYPE Market TIME HORIZON Medium• Multiple supply channels and monitoring annually • Continual engagement with suppliers • Expand supplier base to include multiple suppliers • Identify smaller suppliers that may be under less pressure • Include climate resilience and low-carbon/Net Zero criteria in supply vetting • Review all key suppliers under new vetting criteria • Improve resource efficiency Cost of Net Zero Transition for Subcontractors SO: 4 • Time investment required for subcontractors' engagement and vetting • May increase costs for contractors meeting Net Zero criteria • Market pressure on low-carbon contractors could raise costs to the Group • Increased workload may require recruitment and training within current teams Chronic Market Medium• Maintain continual engagement with subcontractors • Develop multiple subcontractor channels and monitor performance annually • Expand subcontractor base to reduce dependency on a few key players • Identify smaller subcontractors who may be under less market pressure • Integrate climate resilience and low-carbon/Net Zero criteria into subcontractor vetting • Review all key subcontractors under updated vetting criteria J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 39 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Climate Risk Assessment (continued) Business Area: Construction (continued) Business Area: Site Activities RISK ITEM FINANCIAL IMPACTS INTENSITYADAPTATION ACTIONS Despite RD investment, the timescales for low carbon solutions for materials is not short term, and thus not available to support the Group’s Net Zero roadmap, or at a suitable cost SO: 1 • Uncertain of costs impact of markets transition to meeting regulation requirements and timescale • Uncertain of asset value impact of markets transition to meeting regulation requirements and timescale • Volatility in availability, quality and efficacy of some Net Zero/Low carbon materials may result in increased costs Chronic RISK TYPE Market, Reputation TIME HORIZON Short Medium • Continual monitoring of developments and review Net Zero plan as appropriate • Expand supplier base RISK ITEM FINANCIAL IMPACTS INTENSITYADAPTATION ACTIONS Timescale for the development of reservoirs to assure water availability for construction activities SO: 1 • Operational costs of managing and testing grey water for construction • Capital expenditure in treating grey water for construction • Mandatory metering and increased cost of water will result in higher construction costs Chronic RISK TYPE Drought TIME HORIZON Medium • Investigate installation greywater harvesting on site • Little water used on site, there is an impact on the supply of ready mixed concrete • Monitor government infrastructure policy on water investment • Investigate water-efficiency measures on construction sites • Implement SuDS ponds /create on-site reservoirs to reduce water demand during construction • Engage suppliers (especially concrete suppliers) to reduce water usage in production and delivery 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 40 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Climate Risk Assessment (continued) Business Area: Site Activities (continued) RISK ITEM FINANCIAL IMPACTS INTENSITYADAPTATION ACTIONS Uncertainty over implementation of water scarcity controls restrict water use on site SO: 1 • Operational costs of managing and testing grey water for construction • Capital expenditure in treating grey water, rainwater harvesting and recycling wastewater for use during construction • Water use restrictions could impact suppliers which could increase costs, impact quality and availability of materials Chronic RISK TYPE Drought TIME HORIZON Short Medium • Investigate installation greywater harvesting on site • Little water used on site; there is an impact on the supply of ready mixed concrete • Monitor government policy on water investment • Investigate water-efficiency measures on construction sites • Implement SuDS ponds /create on-site reservoirs to reduce water demand during construction • Engage suppliers (especially concrete suppliers) to reduce water usage in production and delivery Trenches subject to flooding after heavy rain requiring great use of pumps out SO: 12 • Cost of acquiring better forecasting data • Capital expenditure for raised material storage • Investment in mitigation could reduce the cost of future downtime Acute Flooding Short• Deploy bigger or additional pumps to manage excess water • Use temporary receptacles for water storage during heavy rain • Investigate suitability of SuDS ponds for long-term water management • Invest in longer-term weather forecasting for extreme rainfall events • Adopt modular construction methods to reduce exposure during wet periods • Include contractual clauses to protect against extreme-weather delays • Raise material storage areas to prevent water damage J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Climate Risk Assessment (continued) Business Area: Site Activities (continued) 41 RISK ITEM FINANCIAL IMPACTS INTENSITYADAPTATION ACTIONS Uncertainty over implementation of water scarcity controls restrict water use on site SO: 1 • Operational costs of managing and testing grey water for construction • Capital expenditure in treating grey water, rainwater harvesting and recycling wastewater for use during construction • Water use restrictions could impact suppliers which could increase costs, impact quality and availability of materials Chronic RISK TYPE Drought TIME HORIZON Short Medium • Investigate installation greywater harvesting on site • Little water used on site; there is an impact on the supply of ready mixed concrete • Monitor government policy on water investment • Investigate water-efficiency measures on construction sites • Implement SuDS ponds /create on-site reservoirs to reduce water demand during construction • Engage suppliers (especially concrete suppliers) to reduce water usage in production and delivery 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 42 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Risk Assessment >2 °C Climate Change Scenario Under the > 2 °C climate scenario it is considered that the risks outlined above will remain as HIGH. However, the climate risk register was reviewed for identified risks where the rating was 12 and the likelihood and impact was reassessed under this scenario. The additional climate risks classified as HIGH are outlined in the table below. Business Area: Commercial Property RISK ITEM FINANCIAL IMPACTS INTENSITYADAPTATION ACTIONS New Build Regs timeline is challenging across the value chain SO: 7, 8, 10, 11 • Increase in capital expenditure • Gaining consents will take longer & cost more • More input required from specialist consultants. • Property asset value may increase due to robust flooding management systems and strengthened climate resilience • Potential revenue increase through reduced vacant periods by making properties more attractive due to climate resilience Acute RISK TYPE Flooding TIME HORIZON Medium• The Group plans to monitor regulation and announcements for relevant changes to Building Regulations • Engage with Industry Bodies to mitigate impact of regulatory changes • Research/monitor availability of no/low and carbon and recycled materials • Explore internal climate resilience fund to help mitigate costs of climate adaption measures Climate change may exacerbate fire risk and thus planning Regs/ Insurers may demand greater fire suppression/ controls SO: 8, 10, 11 • Property asset value may increase due to improvements in fire suppression procedures/controls which could provide strengthened climate resilience • Potential maintenance costs for fire suppression/control equipment • Increase in capital expenditure Chronic Fires Medium• Investigate retrofit opportunities or existing at-risk properties • Investigate rainwater harvesting/storage opportunities to provide water for suppression systems. • Seek specialist consultancy services • Explore internal climate resilience fund to help mitigate costs of climate adaption measures J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 43 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Risk Assessment >2 °C Climate Change Scenario (continued) Business Area: Construction Business Area: Site Activities RISK ITEM FINANCIAL IMPACTS INTENSITYADAPTATION ACTIONS All physical risks impact construction. SO: 1 • High degree of uncertainty in the costs of materials • Operational costs of building and managing multiple suppliers Chronic RISK TYPE Fires, Drought, Flooding Extreme heat TIME HORIZON Medium • Investigate multiple supply from different regions • Regular engagement and collaboration with suppliers to assess potential disruption • Investigate material substitution with less exposure to climate change RISK ITEM FINANCIAL IMPACTS INTENSITYADAPTATION ACTIONS Drying out ground reducing shear strength of ground (leading to collapsed trench) SO: 1 • Additional hire costs for shutters • Additional fuel and labour costs for excavations Acute RISK TYPE Drought TIME HORIZON Medium• Monitor ground conditions • Additional use of shuttering • Battered back excavations Change in HSE guidance around managing the exposure to physical risk of climate extremes SO: 1, 4, 5 • Potential increase in cost from lower productivity • Increase in hire costs for cooling equipment • Reduce labour absences Chronic Extreme Heat +26 o C Reputation Policy/ Regulation Medium • Changes to activities and programme to reduce work demand during extreme heat • Installation of portable cooling in welfare and internal site areas • Education and awareness sessions to reduce risk of dehydration and loss time Workforce ability to work on site in extreme heat SO: 1, 4, 5 • Potential increase in cost from lower productivity • Increase in hire costs for cooling equipment • Reduce labour absences Chronic Extreme Heat +26 o C Medium• Changes to activities and programme to reduce work demand during extreme heat • Installation of portable cooling in welfare & internal site areas • Education and awareness sessions to reduce risk of dehydration and loss time 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 44 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Risk Assessment >2 °C Climate Change Scenario (continued) Business Area: Site Activities (continued) Resilience Strategies As we continue through our TCFD reporting, we are progressing the resilience of our strategy to the impact of climate- related risks, and the adaptation measures required. We are doing so by using the climate risk analysis tool from Earthscan. Physical Climate Risk Assessment We have assessed 6 physical risks where climate change may impact our property portfolio, held by C. & W. Assets Limited and the Group’s own premises in central Scotland. The physical climate risks, based on Earthscan climate platform, are summarised in the charts below for four time periods: Now (2025), Short Term (2030), Medium Term (2035), and Long Term (2050). The risks for the time horizons are assessed under two climate scenarios: Business as Usual (BAU), and Paris aligned (<2°C), resulting in eight models. The Earthscan platform provides science-driven insights that enable us to manage the climate resilience of our existing assets, supply chains, and future acquisitions. The ratings range from Excellent (A) to Extremely Poor (F). The ratings serve as a benchmark for investigating climate mitigation and monitoring adaptation measures for those assets with a risk rating of E or above for any physical risk; identified in our strategic objectives. For each model the combined risk score is provided beneath each chart; the lower the score, the higher the combined risk. RISK ITEM FINANCIAL IMPACTS INTENSITYADAPTATION ACTIONS Delays /damage from the installation of large single panels from exposure to wind (project location dependent) SO: 1 • Potential increase in cost from lower productivity • Costs from rework of damaged panels, including materials • Increase panel costs per m 2 due to smaller panels • Impact on plant hire may be cost neutral; longer hire time offset by reduced costs from smaller crane. Chronic RISK TYPE Technology Wind TIME HORIZON Medium• Changes to activities and programme • Proactively monitor fortnightly forecasts, and adjust programme ahead of time • Install smaller panels J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) C. & W. Assets Limited Properties This section shows the physical climate risk ratings for 34 properties held by C. & W. Assets Limited. Scenario: Business As Usual 45 X'D#\RSRV# # 1'.>;39:#68I";4$<#N;"F#-4'&9#OSV# # -8'&/#E9&.#\RS^S# # ! 1'.>;39:#68I";4$<#N;"F#-4'&9#VP^# # 9:;(.#E9&.#\RS^V# # ! 1'.>;39:#68I";4$<#N;"F#-4'&9\#VOT# # # 7'3@#E9&.#\RSVS# # ! 1'.>;39:#68I";4$<#N;"F#-4'&9\#VS^# # 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 46 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) C. & W. Assets Limited Properties (continued) Scenario: Paris-aligned < 2 °C X'D#\RSRV# # ! 1'.>;39:#68I";4$<#N;"F#-4'&9\#O^S# -8'&/#E9&.#\RS^S# # ! 1'.>;39:#68I";4$<#N;"F#-4'&9\#ORS# # !9:;(.#E9&.#\RS^V# # ! 1'.>;39:#68I";4$<#N;"F#-4'&9#OSO# 7'3@#E9&.#\RSVS# # ! 1'.>;39:#68I";4$<#N;"F#-4'&9#VPS# # J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 47 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Company Operations in Central Scotland This section shows the physical climate risk ratings for three properties used by head office, plant yard, and Thomas Menzies (Builders) Limited. Scenario: Business As Usual X'D#\RSRV# # ! # 1'.>;39:#68I";4$<#N;"F#-4'&9#OSO# -8'&/#E9&.#\RS^S# # ! # 1'.>;39:#68I";4$<#N;"F#-4'&9#VP^# # ! 9:;(.#E9&.#\RS^V# # ! 1'.>;39:#68I";4$<#N;"F#-4'&9\#VOV# 7'3@#E9&.#\RSVS# # ! 1'.>;39:#68I";4$<#N;"F#-4'&9\#VST# # 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 48 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Company Operations in Central Scotland (continued) Scenario: Paris-aligned < 2 °C X'D#\RSRV# # ! # 1'.>;39:#68I";4$<#N;"F#-4'&9\#O^d# # -8'&/#E9&.#\RS^S# # # ! 1'.>;39:#68I";4$<#N;"F#-4'&9\#ORR# ! !9:;(.#E9&.#RS^V# ! 1'.>;39:#68I";4$<#N;"F#-4'&9#OSP# 7'3@#E9&.#RSVS# ! 1'.>;39:#68I";4$<#N;"F#-4'&9#VP^# # J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 49 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Metrics & Targets 2024/25 focus: Monitor our key metrics and targets. Continue to improve data gathering and analysis, through our processes, and software packages Our Impacts and Earthscan. As we refine our Net Zero Roadmap and advance our financial quantification and climate risk assessments throughout the financial year, we expect to further develop and enhance this target. These efforts will be supported by ongoing improvements to our business processes, practices, and actions. The key metrics and targets we have set focus on reducing carbon emissions in the most significant areas of our greenhouse gas (GHG) footprint, as outlined on page 56. We also maintain a strong focus on our investment portfolio, including both directly held properties and unconsolidated equity investments. Further details are provided under the Metrics & Targets section below. As advised last year, data for the year ending 31st July 2024 will serve as our baseline. GHG emissions for the year ending 31st July 2025 are presented in the Greenhouse Gas Emissions Statement on pages 54 to 61 of the Annual Report and Statement of Accounts. This includes Scope 1, 2, and 3 emissions, along with the SECR report detailed on pages 9 to 11 of the Annual Report and Statement of Accounts. We aim to achieve our targets through the following key actions: • Ongoing engagement with our supply chain to reduce the carbon intensity of materials and subcontracted services. • Investment in energy efficiency measures and renewable energy generation across our property portfolio. • Transitioning to a more balanced investment portfolio. • Reducing emissions from site-based activities, including plant, equipment, and fuel use. More details on our Net Zero Roadmap are outlined on pages 50 to 54. Our metrics and targets have been established in line with mandatory requirements, that are relevant to the Group’s activities. In line with new strategic targets to manage climate risk, as outlined on pages 27 to 29 these metrics will be revised accordingly for the year ending 31st July 2026. Metric Title Units 2025 2024 Baseline Year Fixed Asset Investments (Carbon Intensity) tCO 2 e/$m invested 44.2 49.7 Waste Management % diversion from landfill 98.8% 21% Energy (Property) kgCO 2 e/sqft 1.7 1.7 Materials (Construction) tCO 2 e/£m 149.2 91.1 Plant (Fuel Carbon Intensity) * tCO 2 e/£m of Construction Work 35.5 44.2 some plant fuel emissions were misallocated to the company segment and not construction in 2024 and 2023. The prior year comparison has been restated for the company and the construction segments. 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 50 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Overview of Net Zero Roadmap In 2024, the Group developed its initial Net Zero action plan through consultation with relevant departments and employees. To further progress towards the interim target of 30% reduction by 2030, the Group focused on three key areas to identify further emissions reductions. These areas are Construction Design and Materials, Site Activities, and Investment Property energy use. The Net Zero Roadmap has been updated to reflect these changes and other amendments. The following information, presented in summary, outlines the Group’s position in relation to its 2030 target and the Science Based Target Initiative's (SBTi) near-term target of 2030, as well as the current net zero action plan and a description of possible financial impacts. Based on the identified carbon reduction measures (see below), the forecast emissions in 2030 are 6,421tCO 2 e (tonnes of carbon dioxide equivalent); excluding decarbonisation of the UK electricity grid impact on Scope 2 and associated upstream emissions as well as electricity consumption at leased assets (Downstream leased Assets in Scope 3). This is an absolute reduction of 1,739tCO 2 e (21%) from baseline emissions in 2024 of 8,160tCO 2 e (as reported in TCFD 2024 disclosures). To align with our interim Net Zero target of 30% we will need to reduce emissions by an additional 709tCO 2 e to 5,712tCO 2 e in 2030. The table below provides a summary of carbon emissions with and without grid decarbonisation. The expected decarbonisation of the UK electricity grid is not reflected in the roadmap. From our current estimate of a 67% (refer to limitation number 1) fall of the carbon intensity for the UK electricity grid, the current shortfall could reduce by around 352tCO 2 e; resulting in a 26% fall in baseline emissions by 2030. Despite the uncertainty, we expect the UK economy to decarbonise, and along with our strategic objectives, further reduce our supply chain emissions, especially where we have control or significant influence. Furthermore, for the Group to claim carbon neutrality in 2030 would require offsetting. This would entail paying compensation for the residual emissions (709tCO 2 e) at an estimated to cost of between £6,700 and £30,000 depending on the scheme used. In this circumstance, the Board would consider the creditability of schemes before making any financial commitment. Forecast Without Grid Decarbonisation Reduction from UK Grid Decarbonisation in 2030 Forecast With Grid Decarbonisation 8,160 8,160 6,421 (352) 6,069 21.3% 26% 1,739 352 2,091 5,712 5,712 (709) 2024 2030 % (tCO2e) (tCO2e) Carbon Emissions (tCO 2 e) Forecasted Absolute Reduction at 2030 J Smart Net Zero 30% Target in 2030 Shortfall (tCO2e) (357) J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 51 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Science-Based Targets Science Based Targets (SBTs) are targets driven by science to achieve a Net Zero pathway to 2050, which is critical to avoid runaway climate change. In simple terms, this means around a 25.6% reduction in carbon emissions by 2030 compared to the 2024 baseline, and effectively zero by 2050 to align to the 1.5 o C global warming pathway by the end of the century. Science based targets are separated into two timeframes and reduction pathways: I. Near Term between 2020 and 2030 II. Long Term by 2050 Our Net Zero Roadmap interim target was set in 2023 at 30% and is in line with the SBTi near-term target to 2030 and within the 1.5 o C pathway. In relation to SBTi, J Smart's revised Net Zero Roadmap is forecasted to fall short of the 2030 target by approximately 301tCO₂e. The table below provides a summary of carbon emissions with and without grid decarbonisation. However, including the estimated impact of the grid decarbonisation, the forecast emissions in 2030 would be 50tCO 2 e ahead of the SBTi target. The chart below summarises the reduction pathways for J. Smart & Co. (Contractors) PLC Forecast Reduction with and without grid decarbonisation, J. Smart & Co. (Contractors) PLC Target Reduction at 30% by 2030, and SBTi 1.5 o C pathway. From the chart above, the three pathways align to 2026, then the J. Smart & Co. (Contractors) PLC Forecast begins to diverge from 2027 compared to the J. Smart & Co. (Contractors) PLC Target and SBTi pathways. 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 52 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Current Net Zero Action Plan The Net Zero Action plan and forecast emissions have been updated with the quantified emissions savings from priority and long-term actions, as summarised in the table below, and excludes potential carbon reduction from decarbonisation of the UK Grid. The table also includes the expected financial impact for the actions with the most significant carbon reduction Areas of Reduction and Actions Change in Construction Methods Increase use of UK Slate roof tiles instead of concrete Shift to Structural Fabricated Recycled Steel Energy Awareness Energy Efficient Equipment Install LED at investment Properties Improve Heating Systems Radiant Heating to Small Industrial units Replace Gas heating with Electric Heating Upgrade Boilers Common Areas of leased properties Upgrade Old Gas boilers with efficient options Decarbonisation of Equity Investment Low Emission Fleet & Travel Cycling and Car Club Scheme Pool Electric Vehicle for Business travel Replacing the Fleet with Hybrid/Electric Onsite Renewables & Heat Recovery at Investment Properties Install ASHP in suitable properties Install Solar PV in suitable properties Install Mechanical Heat Ventilation Recovery Recycled Materials Replace Non-Recycled Steel with Recycled Steel Purchase of recycled aggregates Reduction in Emissions (Location) (tCO 2 e) (81) (5) (153) (91) (6) (3) (218) (214) Financial Impacts • Increase in roofing costs for locally sourced slate, and longer installation time. • Generally, cost neutral; however for 100% recycled structures design and supply costs are likely to be higher • Reduction in energy costs • Capital expenditure for new equipment offset by reduction in energy costs for company and/ or tenants • Funding above current cashflow forecasts may be required • Potential impact on dividend income and valuation of equity holdings • Lower fuel costs with onsite charging capital expenditure for purchasing fleet within normal replacement programme • Capital expenditure for new equipment offset by reduction in energy costs for company and/ or tenants • Funding above current cashflow forecasts may be required • Generally, cost neutral, though consistent quality can impact programme with rework • Higher specification aggregates cost 10% more than non- recycled. J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 53 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Current Net Zero Action Plan (continued) Methodology & Limitations Developing a carbon baseline and Net Zero roadmap balances time, resources, and the desired level of accuracy required to calculate emissions for material impacts. The development of our roadmap has used reliable methodologies and assumptions to achieve this balance. The Net Zero Roadmap is based on using EcoOnline emissions data for the year ending 31st July 2024, and adding new and verifiable carbon factors for any low-carbon activities, fuels, or materials not included in the emissions data. Where possible raw data and non-spend based units are used to quantify the reduction from identified net zero actions listed in the table above. Nevertheless, these forecasts are based on high level assumptions and estimates rather than on design level plans. Calculating emissions and building a Net Zero roadmap has limitations as follows: 1. The decarbonisation of the UK economy is expected to reduce the carbon intensity of the Group’s electricity use, supply chain, and transport. However, the uncertainty around the impact of the UK Government's Net Zero policies and targets by 2030 means decarbonisation is excluded from the current roadmap. The estimated 380tCO 2 e reduction in emissions is based on available data provided by Digest of UK Energy Statistics (DUKES - Table 1) and the 2024 grid factor is adjusted based on overall downward trend in grid carbon intensity of the UK grid. Areas of Reduction and Actions Reduce Building Heat Loss at Investment Properties Replace Door and Windows common Areas Upgrade Draught Proofing common Areas Install Cavity Wall Insulation Install Over cladding to Roof and Walls Refurbishment of Buildings Increase in GIFA refurbished developments to rebalance the development portfolio Smart Metering and Controls (Properties) Building Management System & Heating controls Install Smart Meters Site Activities Switch to HVO for plant fuel Logistics planning to optimise loads & deliveries Reduce double handling of materials Reduce plant idling & Telehandler fuel use Waste Reduction Initiatives Other Total forecast Reductions to 2030 Reduction in Emissions (Location) (tCO 2 e) (80) (501) (111) (222) (55) (1,740) Financial Impacts • Capital expenditure for new equipment offset by reduction in energy costs for company and/or tenants • Funding above current cashflow forecasts may be required • Very dependent on the project, though there will be lower fuel costs of heavy plant, less capital expenditure on new equipment. • Capital expenditure for new equipment offset by reduced in energy costs for company and/ or tenants • Capital expenditure for separate HVO storage and pump • Cost of awareness programme for plant energy use 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 54 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Current Net Zero Action Plan (continued) Methodology & Limitations (continued) 2. The Carbon factors used were based on those provided within EcoOnline’s carbon accounting software and are sourced from the UK Government and the US Environmental Protection Agency (EPA). 3. EPA carbon factors are used for spend-based data, which is based in USD$. The Group’s financial data (in GBP £) is then converted into US dollars at the average monthly exchange rates. Therefore, future emission calculations are subject to fluctuating foreign currency exchange rates. These factors have been used for Purchased Goods and Services, Capital Goods, and Sub-contracted Services. 4. Some carbon emission calculations are based on spend, which may not be as accurate as using direct units of measurement (e.g. tonnes of steel). For example, price inflation has not been considered in the Net Zero roadmap and could impact future reporting of spend-based emissions. 5. Forecasted emissions in the Net Zero model are location-based and therefore do not reflect Market-Based methodology. This is partly because we do not hold certified renewable electricity contracts for Scope 2 emissions. 6. The Net Zero forecasts exclude the emissions impact of capital expenditure required to implement some of the net zero actions outlined in the table above. 7. The carbon baseline and Net Zero roadmap projections are based on information and data available and do not include any verification of the supporting data. Therefore, the accuracy of reported emissions is dependent on the systems to gather, record and retain data, as well as the degree of manual processing. Overall, there is a degree of uncertainty in our Net Zero forecasts. Greenhouse Gas Emissions Statement The 2025 Annual Report and Statement of Accounts includes our comprehensive Greenhouse Gas Emissions Statement for the year ending 31st July 2025. The statement includes the emission categories 1 which the Board considers to be relevant to climate related risks, importance to stakeholders and material to the Group's activities during the year; and where reliable data is available to calculate emissions. Where relevant, Scope 3 emissions also include upstream emissions as calculated by the carbon accounting platform. This statement outlines the carbon emission for the three business segments: Company, Construction and Property Investment, along with an appropriate carbon intensity metric for each segment. This segmentation and analysis will enable the Board to compare our performance year on year, assess the effectiveness of carbon reduction actions taken, and revise the Net Zero roadmap. Common with most carbon accounting and reporting the methodologies and the accuracy of reported emissions will mature over time, and the Board will ensure key reporting principles of transparency, comparability, comprehensiveness, and materiality are adhered to. Throughout the year the Group has invested in improving its data capture, processing and carbon accounting methodologies, including the use of a carbon accounting software platform - Our Impacts - provided by Eco online. These improvements have impacted our significant Scope 3 emissions categories, in particular, material purchases and waste generation. The statement includes a summarised methodology, supplementary notes on each emissions category and any limitations in the methodology. J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 55 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Greenhouse Gas Emissions Statement (continued) Emissions Impact 2025 The chart below shows the profile of our total emissions for the 11 emissions categories 2 within our defined operational boundary, covering Scopes 1, 2 and 3 and notably the three largest categories. The total emissions for the reporting period are 8,588tCO 2 e (2024: 8,160tCO 2 e). + &++ !+++ !&++ #+++ #&++ $+++ ,-./01"0234561-27 "" 8915.9:";96 " <:/01.-0-1= " >?@ A2761.501-27"391/.-9:6 "" @540271.9012."6/.B-0/6 " A9C-19:";22D6 " E5/:"F"<7/.;="G/:91/D H961/ I56-7/66"1.9B/: " <3C:2=//"023351-7; " J/96/D"K66/16 " L7B/613/716 " [.;"";'3"#2/1WR95 [.;"";'3"#4$/9@'&I !"#$%&!'!&()++#,+ #+#% #+#& 1. As defined by the GHG Protocol: A Corporate Accounting and Reporting Standard (revised edition) for Scope 1, 2 and 3 emissions. 2. The category for purchase goods and services has been subdivided into central overheads, construction materials and subcontractors, which all fall within the formal emissions category of Purchase goods and services. 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 56 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Greenhouse Gas Emissions Statement (continued) Segmental Analysis of the Group’s Greenhouse Gas Emissions The table below outlines the emissions for each emission category included in the operational boundary for each business segment and the total for the Group. Relevant and Excluded Emission Categories The Greenhouse Gas Emissions statement excludes relevant and potentially material emissions categories where data availability and reliability were not adequate to include. The exclusions are primarily relating to the logistics from Tier 1 suppliers to our sites or central depot (upstream transportation and distribution), and the treatment of waste from the future demolition of properties (end of life treatment of sold products). Emissions Category Notes Company Construction Investment Property Group Total Group Total 2025 2024 Direct Combustion 1 1 578 - 579 638 Natural Gas 2 52 9 180 241 357 Electricity 3 25 9 59 93 103 Construction materials 5 - 2,422 - 2,422 1,308 Purchased goods and services 4 590 140 603 1,333 1,523 Subcontractor services 6 - 1,945 - 1,945 1,895 Capital goods 7 28 192 47 267 258 Fuel and energy-related activities 8 98 65 51 214 249 Waste generated in operations 9 86 13 - 99 221 Employee commuting 11 230 - - 230 203 Downstream leased assets 12 - - 1,053 1,053 1,331 Investments 13 102 - - 102 65 Total Emissions 1,219 5,374 1,995 8,588 8,161 Breakdown by Scope (in tCO 2 e) Scope 1 53 587 180 820 995 Scope 2 25 9 59 93 103 Scope 3 1,141 4,778 1,756 7,675 7,063 Total Emissions 1,219 5,374 1,995 8,588 8,161 Business travel 10 7 1 2 10 10 tCO 2 e tCO 2 e tCO 2 e tCO 2 e tCO 2 e J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 57 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Greenhouse Gas Emissions Statement (continued) Segmental Analysis of the Group’s Greenhouse Gas Emissions (continued) Upstream Emissions Distribution and Tr a n sportation For upstream logistics, the limitation is due to the availability of reliable data from suppliers and practical data collection methods that are not unnecessarily time consuming. Downstream Emissions for Sold Properties For end-of-life treatment of properties the calculation of emissions arising from the future demolition of property sales in the year is problematic because the properties have a useful life of around 50 years. Most materials would be recycled, and there is a specific uncertainty around the final release of atmospheric emissions for recycled timber. In accordance with Corporate Accounting and Reporting Standard (revised edition), sub-sets of downstream emissions relating to sold products (categories: 9,10,11 and 12) should not be selectively excluded/included (section 6.4). Although categories 9 and 10 are not relevant to the Group’s activities, end of life emissions are and therefore, the estimated lifetime energy- related emissions from the sale of residential properties in the year has been excluded from the emissions statement. Explanation of Key Variations • Direct Combustion: the reduction in plant fuel by 10% due to increased outsourcing of civils work for larger sites, along with operational efficiencies. • Natural Gas: the fall is associated with reduction in GIFA for investment properties with two estates being sold in the year (refer to Methodology and Limitation note 4). • Construction Materials & Subcontractors: the increase is a combination of factors including an increase in material use (18%), greater spend on carbon intense materials (Asphalt), and a change in methodology for subsidiaries Thomas Menzies (Builders) Limited and McGowan and Company (Contractors) Limited. In 2024, construction emissions were based on spend-based emission factors, whereas in 2025 the improvements in data collection resulted in carbon emissions being calculated from actual tonnage of materials purchased rather than spend (refer to Limitation note 5). The prior year's figures are not restated, and it is not practicable to do so. • Downstream Leased Assets – the fall of 21% represents the reduction in the leased floor area of investment properties over the year. Carbon emissions are based on average benchmarks and therefore the carbon emissions are directly associated with leased floor area (refer to Methodology and Limitation note 2). Carbon Intensity Metrics The statement includes four intensity metrics, one for each business segment and an overall Group metric. The Group metric is based on total revenue in £million, and for each business segment they are based on the underlying activity that influences emissions for a given segment, as follows: • Company is based on the number of full-time equivalent employees (FTE), which differs from the average employee numbers provided in the notes to the accounts. • Construction is based on the £ millions of work carried out, including the capitalisation of own work, if any. The capitalisation of our own work is included as this fairly captures the underlying activities which influence carbon emissions. • Investment property is the current floor area (square feet) under lease, excluding common areas. 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 58 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Greenhouse Gas Emissions Statement (continued) Carbon Intensity Metrics (continued) The Board considers these metrics to be appropriate and comparable for the sectors in which the Group operates. The carbon intensity metrics are provided in the table below. some plant fuel emissions were misallocated to the company segment and not construction in 2024 and 2023. The prior year comparison has been restated for the company and the construction segments. The rise in the intensity ratios for the construction segment reflects the increase in emissions for construction, as noted above, and is partly offset by a 14% increase in construction turnover. These impacts feed through to a slight increase in the Group’s overall carbon intensity. Investment Property’s carbon intensity has remained constant with 2024 as the underlying methodology is limited to energy benchmarks (kWh/sqft). Nevertheless, the cyclical nature of the construction projects means year-on-year comparisons are limited. With our continued investment in data management, we can monitor trends on a quarterly basis as outlined in the Governance section of TCFD. Climate-Related Risks From our strategic analysis and risk assessment as outlined on pages 32 to 44 of the financial statements, the most significant emissions categories (% of total emissions for current and prior periods) with associated climate-related risks are summarised as follows: • Construction Activities - in relation to materials and subcontractors 51% (2024, 39%) Risks are primarily associated with transition and regulatory risks in the Scottish building sector, the adoption of new technologies, low carbon alternatives for steel, concrete, and insulation, to reduced embodied carbon of the built environment. However, stakeholder engagement highlights that suppliers and subcontractors view the transition to net zero as cost prohibitve with the necessary investment in low carbon solutions not coming on stream in the short term at a suitable cost. Physical risks are medium to long term regarding the threat of fire, disease, and drought impacting the supply of timber, and flooding of sites during construction and restraints on water use for construction during periods of prolonged drought. • General Purchases of Goods and Services 16% (2024, 19%) At present, the transition risks are not considered to be significantly different to the general economy’s progress towards a net zero future. • Energy 11% (2024, 13%) Fossil fuels used for heating, power, and transport across the company, the transition risks associated include the availability of sufficient supply of renewable energy at a viable cost. The Group’s Net Zero roadmap aims to mitigate exposure to this transition by reducing consumption and switching to renewable energy sources. Metric Carbon Intensity (tCO 2 e/UoM) 2025 202420242025UoMSegment 9.0 9.5140135FTECompany 331 3081416Gross Revenue £mConstruction 0.0032 0.0031781,744617,017sqftInvestment Property 376 3712223Revenue £mGroup Total J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 59 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Greenhouse Gas Emissions Statement (continued) Climate-Related Risks (continued) • Leased Assets 12% (2024, 16%) Physical risks relate to increasing surface water flooding risk and extreme heat in the context of Scotland. Properties may need to adapt due to increased demand for cooling in periods of high summer temperatures by 2030. Transition risks relating to the movement away from fossil fuels include the adoption of hybrid/electric vehicles, and expectations from clients for energy efficient buildings that have lower running costs. Planned adaptation actions for these risk areas have been considered as part of the Group’s climate risk management, as outlined in these TCFD disclosures. Methodology The overall methodology for preparing this Greenhouse Gas Emissions statement follows the requirements outlined in the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (revised edition) with supplementary guidance provided by Greenhouse Gas Protocol: Corporate Value Chain (Scope 3) Accounting and Reporting Standard. The Group’s boundary is based on the equity method of consolidation. For the current reporting period, the raw data from the Group records was entered into Our Impacts Platform, which then calculated the GHG Emissions for the year. The carbon accounting methodologies used in the platform are audited annually by PWC LLP, which we place assurance upon. The emissions factors used are generally based on the UK Governments published for the relevant period: UK Government GHG Conversion Factors for Company Reporting for non-spend based data, such as tonnes of materials, and where suitable supplier specific emissions factors based on verified Environmental Product Declaration (EPD) for cradle to gate, for example recycled steel. For spend based data, emissions factors within the platform are predominantly sourced from US Environmental Protection Agency Office of Research and Development (US EPA ORD), 2024 publication, with GBP value converted into US dollar (kgCO 2 e/US$) in accordance with the platform verified methodology. Data sources are predominantly from the Group's accounting records, supplier and contractor records, and other Group information as required. Specific assumptions and methods for each emissions category are outlined in the supporting notes below. Limitations Notable limitations with the methodology and emissions data are as follows: 1. Emissions factors for Category 3.01 are spend-based which are sourced from the platform and therefore do not reflect or adjust for any inflationary impacts in recent years. Spend-based emission factors are generic and do not represent the actual emissions of the Group's supply chain and are based on sector averages and may have upto a +/- 60% uncertainty. 2. For downstream leased assets, investment properties held by C.& W. Assets Limited, the emissions are based on available benchmarks (kWh/Sqft) 1 and total tenant occupied floor area based on days leased in the reporting year. Any energy use relating to vacant units is recorded in Scope 1 and Scope 2 emissions as the Group has direct control over consumption for the vacant period. Given the complexity of data processing, there is a degree of uncertainty as to the data accuracy. We recognise these limitations, albeit unquantifiable, in the benchmark methodology, and will look to improve this with more specific benchmarks or energy data in future years. 1 Energy benchmarks by kWh/m2 as provided in the platform or obtained from UK Government Non-Domestic National Energy Efficiency Data-Framework 2023 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 60 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Greenhouse Gas Emissions Statement (continued) Segmental Analysis of the Group’s Greenhouse Gas Emissions (continued) Limitations (continued) 3. Although considered an immaterial impact on total GHG emissions, the energy data for gas and grid electricity data is based on invoice date and not actual consumption for the reporting period; thus there is a potential for incorrect data cut off. 4. The platform’s methodology to convert GBP spend into US dollars and then apply the granular set of US EPA emissions factors (kgCO 2 e/US$) means exchange rates will impact the reported emissions. 5. The statement has been prepared on information and data available during the year, and its accuracy is dependent on the underlying systems and process for record keeping and data management. With the continual improvement in carbon accounting methodologies and availability of more specific data and recent carbon factors the impact of these limitations will diminish over time. We are unable to practically estimate the material impact of these limitations. Notes to the Greenhouse Gas Emissions Statement The notes below outline more specific areas of uncertainty for each emission category in the segmental analysis table above. 1. The consumption of liquid fuels is predominately by construction plant and company vehicles based on delivery invoices. 2. The consumption of mains supplied natural gas is based on supplier invoices and represents energy use for Group offices and heating for common areas of Investment Properties where the Group has direct control over its use. 3. The consumption of grid electricity is based on supplier invoices for Group offices and for common areas of Investment Properties where the Group has direct control over its use. 4. The category for purchased goods and services represents general overheads for the running of the Company and its Subsidiaries and is based on the financial data used to prepare the financial statements. This report uses the US EPA’s Environmentally Extended Input-Output (EEIO) factors, which are published in kgCO₂e per US dollar of final demand. Emissions relating to the purchases of direct materials and subcontractor services in relation to the Group's construction activities are calculated and disclosed separately (see notes 5 and 6 below). 5. Emissions for directly purchased materials are calculated based on a mixed method of quantity of raw material (i.e. tonnage of concrete, m 3 of timber) and spend £ for the cradle to gate emissions. For the current reporting year, carbon emissions calculated based on tonnage of materials equates to 77% (2024, 70%) of total material spend. Some emissions factors within carbon accounting platform are sourced from Circular Ecology (2019) ICE V3.0. 6. Subcontractor emissions relate to the contractor providing major packages of work; and associated activities are matched to the most suitable industry activity available in US EPA ORD (2024). 7. Emissions relate to capitalised spend on IT equipment, motor vehicles, plant & equipment, and the installation of the solar PV system at the head office. Capital goods exclude any capitalisation of own work relating to Investment Property. However, the carbon impact is included within other Scope 3 categories, namely purchase goods and services, materials and subcontractor, as it is not practical to disaggregate this data and reclassify the £ 3,364,000 of capital expenditure. 8. This category is based on the consumption of grid electricity (kWh) for transmission losses and distribution and upstream emissions for both natural gas and grid electricity consumption (kWh) for Scope 1 and 2 emissions respectively, as calculated by the carbon accounting platform. 9. Emissions relate to the waste management of construction waste and waste from arising from the head office; as waste from Investment Properties is generated and managed by the lessee. Emissions are based on the tonnage for each waste stream and final waste treatment. J.Smart & Co. (Contractors) PLC 342!4%')#2%0/24CONTINUED 31st JULY 2025 86197 J Smart Annual Report Text.indd 7 24/11/2025 15:29 61 86197 J Smart Annual Report Text.indd 6 24/11/2025 15:29 TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (continued) Greenhouse Gas Emissions Statement (continued) Notes to the Greenhouse Gas Emissions Statement (continued) 10. For business travel, emissions are calculated from monthly mileage claims and the vehicle type (market segment) and emission factors per the carbon accounting platform. 11. In May 2025, the Group conducted a survey of all employees to ascertain the commuting travel patterns by mode (car, bus, train, cycle and walk). The survey results were extrapolated to estimate the emissions for the FTE employees. 12. Corporate Value Chain (Scope 3) Accounting and Reporting Standard (p124), states that ‘proper categorisation of emissions from leased assets by lessors and lessees ensures that emissions in Scopes 1 and 2 are not double counted. For example, if a lessee categories emissions from the use of purchased electricity as Scope 2, the lessor categories the same emissions as Scope 3, and vice versa.’ In this regard, we reasonably expect that some leasees could consider their direct energy consumption as their Scope 1 and 2 emissions based on their operational use. In addition, to ascertain the appropriate classification of emissions related to Investment Properties between Scopes 1, 2 and 3 requires a more thorough examination of the ownership and operational control of underlying assets and activities which generate emissions. For example, a leasee may own a heating system installed at an industrial unit and thus could be treated as Scope 3, or in another scenario the leasee controls the purchases of certified renewable electricity. For this reporting period, the emissions related to electricity and gas have been included in Scope 3 emissions. 13. Investments reflect Scope 1 and 2 emissions for equity investments managed by third-party fund managers and not recorded in the Group's Scope 1 and 2 emissions. The emissions are allocated based on the investee emission ratio of tCO 2 e/$million invested as of 31st July 2025 to the Group equity holding ($millions) in the investee. Carbon data provided by fund managers is of 31st July 2025. The reported emissions for investments exclude any emissions related to collective investments and debt investments where currently emission data is not available from fund managers. 62 63 J. Smart & Co. (Contractors) PLC STRATEGIC REPORT (continued) 31st JULY 2025 EMPLOYEES The Group recognises the contribution of the staff to the success of the Group. The Group operates with a core employee base who in the main have been with the Group for a considerable length of time and have gained a significant knowledge of the sectors the Group operates in and of the companies within the Group. Where appropriate the Group promotes from within whether that be the Directors, staff or site employees. The Group recognises the importance of retaining its core staff to ensure its future success. The Group does not have a specific Human Rights policy but it does have policies on recruitment and retention of employees and communication with employees which are aimed at ensuring employees are fairly treated during their employment with the Group. The Group is committed to providing equal opportunities in recruitment and employment, full and fair consideration is given to all applicants for employment and to all existing employees for promotion. Where employees become disabled during their employment and are unable to fulfil current duties they are offered suitable alternative employment within the Group, if feasible. It is the Group’s policy that there should be effective communication with employees at all levels, on matters which affect their current jobs or future prospects and all Directors and senior staff members make themselves available to all staff to discuss any matters of concern. In achieving this policy, the Directors are aware of the need to take account of the practical and commercial considerations of the Group, and the needs of the employees. A breakdown by gender of Directors, senior managers and all employees is given below: Male Female Directors 3 2 Senior Managers 6 1 Total Employees 124 18 86197 J Smart Annual Report Text.indd 6286197 J Smart Annual Report Text.indd 62 15/12/2025 14:2515/12/2025 14:25 62 63 J. Smart & Co. (Contractors) PLC STRATEGIC REPORT (continued) 31st JULY 2025 EMPLOYEES (continued) Numerical Diversity Data of Board of Directors at 31st July 2025 In accordance with Listing Rule UKLR6.6.6R our gender identity and ethnicity data as per the format set out in UKLR6 Annex 1R is detailed below. At the year end, the Board of Directors were asked to complete of diversity disclosure questionnaire to confirm which categories in the tables below they identify with. Number of senior Number of positions on the Number in Percentage of Board Percentage Board (CEO, CFO, executive executive Gender Identity Members of the Board SID and Chair) management management Men 3 60% 2 3 60% Women 2 40% 1 2 40% Not specified/ prefer not to say - - - - - Number of senior Number of positions on the Number in Percentage of Board Percentage Board (CEO, CFO, executive executive Ethnic background Members of the Board SID and Chair) management management White British or other White (including minority - white groups) 5 100% 3 5 100% Mixed/Multiple Ethnic Groups - - - - - Asian/Asian British - - - - - Black/African/ Caribbean/ Black British - - - - - Other ethnic group, including Arab - - - - - Not specified/ prefer not to say - - - - - As at 31st July 2025, our chosen reference date under UKLR 6.6.6R(9), the Company states it has met the target on board diversity relating to 40% of the individuals on the Board being women and at least one woman on the Board holding a senior position on the Board but has not met the target that at least one individual on the Board being from a minority ethnic background. The Board of the Company comprises a relatively small number of individuals and therefore it is difficult for the Company to comply with all the requirements of the Listing Rules in relation to board diversity. BY ORDER OF THE BOARD OF DIRECTORS Patricia Sweeney 20th November 2025 Company Secretary 86197 J Smart Annual Report Text.indd 6386197 J Smart Annual Report Text.indd 63 15/12/2025 14:2515/12/2025 14:25 64 65 David W Smart, Chairman and Joint Managing Director Aged 52 Joined the Company in 1998 Appointed Director in 2010 Appointed Chairman and Joint Managing Director in 2017 John R Smart, Joint Managing Director Aged 55 Joined the Company in 2002 Appointed Director in 2013 Appointed Joint Managing Director in 2017 Alasdair H Ross Aged 63 Joined the Company in 1989 Appointed Director in 2012 Patricia Sweeney Aged 56 Joined the Company in 2011 Appointed Director in 2017 Jane Oliver Joined the Company in 2000 Appointed Director in April 2025 J. Smart & Co. (Contractors) PLC DIRECTORS 86197 J Smart Annual Report Text.indd 6486197 J Smart Annual Report Text.indd 64 15/12/2025 14:2515/12/2025 14:25 64 65 J. Smart & Co. (Contractors) PLC CORPORATE GOVERNANCE 31st JULY 2025 COMPLIANCE STATEMENT This statement details how the Company has applied the principles and provisions as set out in the Financial Reporting Council’s UK Corporate Governance Code issued July 2018 (the Code). A copy of the Code can be review on the Financial Reporting Council’s website at www.frc.org.uk. The Board recognises that it has not complied fully with the Code in the areas of appointment of Non-Executive Directors and the establishment of Nomination, Audit and Remuneration Committees and the re-election of executive Directors. It also has not complied with the principles relating to division of responsibilities, evaluation of the Board and individual Directors. The Board considers that due to the nature of the Company including its size, lack of complexity and the ownership of the Company that to follow all the principles of the Code would be onerous and would provide no discernible benefit to the Company or shareholders. Full details and explanations of principles and provisions not complied with are detailed below. However, it is the intention of the Company to appoint Non-Executive Directors in the coming year with the intent to establish the required Committees in future years and also from the Non-Executive Directors appointed identify one as the Independent Director. BOARD LEADERSHIP AND COMPANY PURPOSE The Board of Directors (the Board) is committed to ensuring that it maintains good corporate governance of the Company so as to achieve the long-term sustainable success of the Company. The Board remains committed to the principles of openness, integrity and accountability in dealing with the Company’s affairs and believes it has always acted with probity in the best interests of the Company, its employees, shareholders and stakeholders without recourse to guidance or instruction from others and fully intends to continue to do so in the future. The Board which is the executive management of the Company consists of the Chairman who is also one of the two Joint Managing Directors and three other Executive Directors. The size of the Board results in efficient management of the Company leading to the long-term sustainability and success of the Company and that the Directors fulfil their statutory duties under S172 Companies Act 2006. The objectives of the Company as stated in the Strategic Report have been set by the Board and are reviewed regularly to ensure that they are being met and that adequate financial and human resources are available to meet these objectives. The Directors are involved in the day to day management of the Company supported by senior management. The Directors were all employees of the Company prior to their appointment as a director and therefore have the appropriate skills, experience in their particular fields and knowledge of the Company and its culture to ensure that the Board discharges its responsibilities effectively to ensure the continued success of the Company. The detailed involvement in the day to day management ensures that the Directors interact daily with Company employees and encourage an open approach to management allowing employees to raise any concerns they have directly with the Directors and ensures that actual workplace policies and practices align to the Company’s values. The Directors have ascertained the risks and uncertainties which could impact on the continuing success of the Company and these are set out in the Strategic Report. The Directors have also established controls with the aim to mitigate these risks as best as possible. The risks and the controls in place are regularly reviewed and steps are taken as necessary to adapt the controls as it becomes apparent that changes are needed. The Chairman always makes himself available to shareholders to answer any queries they may have throughout the year on matters relating to the governance and performance of the Company and ensures that the views and concerns of the shareholders are brought to the attention of the Board as a whole. Decisions are taken by the Board quickly and effectively following ad hoc consultation among the Directors concerned as matters arise. The Board takes the view that this direct and flexible approach is preferable to the more cumbersome procedures prevalent in larger organisations and has made a considerable contribution to the Company’s continuing success and ensures that this approach best serves the interests of the Company, its employees, shareholders and stakeholders. The Board confirms that it will consider and authorise any conflicts of interest between the Directors and the Company where there is no detrimental impact to the Company. 86197 J Smart Annual Report Text.indd 6586197 J Smart Annual Report Text.indd 65 15/12/2025 14:2515/12/2025 14:25 66 67 J. Smart & Co. (Contractors) PLC CORPORATE GOVERNANCE (continued) 31st JULY 2025 BOARD LEADERSHIP AND COMPANY PURPOSE (continued) S172 COMPANIES ACT 2006 The Directors are aware of their responsibilities and duties under S172 Companies Act 2006 to promote the long-term success of the Company for the benefit of its members whilst having regard to the matters as set out in section 172 (1) (a)-(f) of the Companies Act 2006. The Directors consider the other stakeholders which are impacted by their decisions are employees, suppliers, customers, tenants and local communities in which we operate. Whenever decisions are being made by the Board they take into account the implications these will have on all of these stakeholders. EMPLOYEES As stated in the Strategic Report the employees of the Company are an important part of the success of the Company and the Group overall. The Directors operate an open-door policy whereby any employee can discuss any matters arising from their employment with any of the Directors. The Managing Directors visit all sites on a weekly basis which allows all site-based staff to also communicate directly with the Directors on matters they wish to raise. The employees can also raise any matters with Human Resources. Health checks for all employees wishing to utilise the service continued in the year and through our private medical insurance a Health & Wellbeing app is available to employees and regular updates are issued to all employees on Wellbeing topics. A number of employees have undertaken training in mental first aid and these employees are known to all employees who can contact them if required. Employees are sent on relevant training courses to ensure their skills knowledge and training is up to date and particularly on the sites that all health and safety issues remain a main focus. We are committed to employing apprentices in the construction trades and currently we have 5 apprentices. RELATIONS WITH SHAREHOLDERS The Board has in the past and will continue to enter into dialogue with the shareholders wherever possible. The Chairman is responsible for ensuring that the views and concerns of the shareholders are communicated to the Board. The Chairman is also responsible for discussing governance and strategy matters with the shareholders. We report our performance to the shareholders via our interim 6 monthly accounts, our preliminary announcement of the year end results and the provision of the statutory financial statements. All shareholders have the opportunity to attend the Annual General Meeting and to participate in questions and answers with the Board on matters relating to the Company at the conclusion of the Meeting. At the Annual General Meeting separate resolutions will be proposed on each substantially separate issue and the number of proxy votes received for, against and withheld for each resolution will be announced. SUBSTANTIAL SHAREHOLDERS As at 31st July 2025 and 20th November 2025, the Company has been notified of the following holdings of substantial voting rights in respect of the issued share capital of the Company: As at 31st July 2025 Number % Davd W Smart . . . . . . . 12,782,750 32.87 John R Smart . . . . . . . 12,782,750 32.87 Octet Investments Limited . . . . . . 1,872,400 4.81 Estate of A J Whitehead . . . . . . . 2,311,495 5.94 As at 20th November 2025 Davd W Smart . . . . . . . 12,782,750 32.91 John R Smart . . . . . . . 12,782,750 32.91 Octet Investments Limited . . . . . . 1,872,400 4.82 Estate of A J Whitehead . . . . . . . 2,311,495 5.95 86197 J Smart Annual Report Text.indd 6686197 J Smart Annual Report Text.indd 66 15/12/2025 14:2515/12/2025 14:25 66 67 J. Smart & Co. (Contractors) PLC CORPORATE GOVERNANCE (continued) 31st JULY 2025 BOARD LEADERSHIP AND COMPANY PURPOSE (continued) S172 COMPANIES ACT 2006 (continued) SUPPLIERS AND SUBCONTRACTORS The Company and Group prefers to use key suppliers and subcontractors which it has existing working relationships with and therefore is aware of the quality of products and services provided. We are committed to ensuring that all suppliers and subcontractors are paid within the terms of their supply and are paid by electronic payments directly into their bank accounts thus ensuring prompt payment. Supplies of some materials have proven difficult to obtain and costs continue to increase, however, were possible we have continued to place orders with the suppliers we would normally use and aim to use local suppliers and subcontractors as much as possible. CUSTOMERS AND TENANTS Customers of construction activities tend to those which the Group has worked with in the past and we have built up strong working relationships with them which has resulted in repeat work being awarded to the Group. We maintain dialogue throughout contracts with our customers to ensure that they are aware of the progress of all contracts and any issues which may arise can be resolved in a timely manner. For our private housing customers we have a dedicated sales team based at the development sites who assist the customers from their initial viewing of properties through to the handing over of the keys to their new home. Our investment properties are maintained to a high standard with dedicated managers who regularly inspect them and communicate with tenants regarding any issues they have. With regards to rental payments from tenants we have continued to allow tenants who are having cash flow issues resulting from the coronavirus pandemic and the cost of living crisis to make monthly payments as opposed to the normal quarterly payments in advance. A number of our tenants have and continue to make use of this arrangement. COMMUNITIES AND THE ENVIRONMENT The Group supports the local community by financially supporting local and national charities and providing financial support to local communities for gala days held for the benefit of the people living in the local area. The Group complies with all local authority guidance and planning conditions to ensure that all building sites are safe for employees, subcontractors and suppliers and do not interfere with surrounding neighbours. As a private house builder we are committed to fulfilling our requirements to provide social housing and financially contribute to local authorities under Section 75 Agreements for amenities and facilities required to support new housing developments. A Sustainability Committee has been established comprising of some executive Board members and senior members of staff from various departments within the Group with the aim to ensure that the Company and Group review the impact of climate change on all aspects of the Group’s operations and take appropriate actions to ensure that the impact of climate change is minimised as much as possible. The impact of our activities on Greenhouse Gas Emissions is disclosed in the Report of the Directors on pages 9 to 11 and our Report on Task Force on Climate-Related Financial Disclosures is contained in the Strategic Report on pages 21 to 61. 86197 J Smart Annual Report Text.indd 6786197 J Smart Annual Report Text.indd 67 15/12/2025 14:2515/12/2025 14:25 68 69 J. Smart & Co. (Contractors) PLC CORPORATE GOVERNANCE (continued) 31st JULY 2025 DIVISION OF RESPONSIBILITY As mentioned above the Chairman of the Board is also one of the Joint Managing Directors who collectively act as the Chief Executive of the Company. Bearing in mind the size of the Company, the Board sees no value in splitting the role of Chairman and Managing Director, a policy which has served the Company well over many years. The Chairman is responsible for the leadership of the Board, ensuring that all the Directors receive accurate, timely and clear information on issues arising at formal and ad hoc Board meetings, setting Board agendas and ensuring adequate time is given to discussion of the agenda points. It is the intention of the Company to appoint Non-Executive Directors in the coming year with the intent to establish an Audit Committee for future years audits and once that Committee is established to also establish Remuneration and Nomination Committees. From the Non-Executive Directors to be appointed one will be identify as the Independent Director. During the year the Board held 8 formal board meeting all of which were attended by those Directors who were Directors for the entire year. Since Jane Oliver’s appointment as a Director on 4th April 2025, 2 formal board meetings were held and she attended both of these meetings. Also, during the year the Directors met regularly on an ad hoc basis to undertake the executive management of the Company and take decisions on all material matters quickly and effectively but with due care and diligence and therefore exercising full direction and control of the Company. All Directors openly express their views and make a valuable contribution to the running of the Company. Due to the makeup and operation of the Board there is no requirement to formally set out in writing the responsibilities of the Chairman, Chief Executive or the Board. All members of the Board have the ability to seek independent professional advice, at the Company’s expense, should they consider it necessary to enable them to fulfil their duties as a director. All Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring that Board procedures are followed and that applicable rules and regulations are complied with. The Statement of Directors’ Responsibilities is set out on pages 78 and 79. COMPOSITION, SUCCESSION AND EVALUATION As the Company has no Non-Executive Directors it has not established a Nomination Committee for the appointment of Directors. Nominations of new directors are submitted by the Chairman for approval by the Board. All Directors of the Company are long-serving employees of the Company at the date of nomination and appointment which ensures that their skills, experience and knowledge are retained within the Company and onto the Board. Although the Group does not have a specific policy on diversity, due regard is taken of the benefits of all types of diversity onto the Board when nominations are proposed and also takes into account the skills, experience and professional background of nominees. No formal tailored induction upon joining the Board is required given all members of the Board are long-term employees. As all Board members are full-time employees of the Company they are fully committed to the Company and are able to allocate sufficient time to the Company in discharging their duties and responsibilities effectively. There is no formal system of performance evaluation of the Board or the Directors individually. Directors are encouraged to receive any training they consider necessary to ensure they remain up-to-date with their skills and knowledge of the Company’s business and that they remain aware of the risks associated with the Company and also are aware of the regulatory, legal, financial and other developments to enable them to fulfil their roles effectively. All Directors, with the exception of the Chairman, offer themselves annually for re-election. As the Chairman is one of the Joint Managing Directors, then the Chair will not retire after the nine years recommended in the Code. 86197 J Smart Annual Report Text.indd 6886197 J Smart Annual Report Text.indd 68 15/12/2025 14:2515/12/2025 14:25 68 69 AUDIT, RISK AND INTERNAL CONTROL As the Company has no Non-Executive Directors it has not established an Audit Committee, it is therefore the responsibility of the Board to ensure the independence and effectiveness of the external audit function. It is the intention of the Company to appoint Non-Executive Directors in the coming year with the intent to establish an Audit Committee for future years audits. The Company does not have an internal audit function. The Board reviews the need for this function regularly and has concluded for the time being that no internal audit function is required. RISK MANAGEMENT AND INTERNAL CONTROLS The Directors have sole responsibility for the preparation of the Annual Report and Statement of Accounts which taken as a whole is fair, balanced and understandable and provides the information necessary for the shareholders to assess the Company’s performance, business model and strategy. The Directors are also responsible for the preparation of the Interim Report and other price-sensitive public reports and to ensure that these reports are also fair, balanced and understandable. The Board is responsible for and annually reviews the Group’s system of internal controls in relation to financial, operational, compliance and risk management to ensure their continued effectiveness. The systems adopted by the Board are designed to manage the risks of failure to achieve the Company’s business objectives as opposed to eliminate them, as any system of control can only provide reasonable but not absolute assurance against material misstatement or loss. The Strategic Report includes a description of the principal risks and uncertainties faced by the Group and the actions undertaken by the Group to mitigate these risks. The Board, in accordance with the Code, has reviewed the effectiveness of the internal controls from the commencement of the accounting period to the date of approval of the Annual Report and Statement of Accounts. No significant failings or weaknesses have been identified in that period. There has also been a continual process of identification by the Directors of key areas of principal and emerging risks within the Group and appropriate action taken to mitigate and monitor such risks. The Directors confirm that they have carried out a robust assessment of the principal and emerging risks facing the Group, as detailed in the Strategic Report, including those which threaten the business model, future performance, solvency and liquidity of the Group. The main features of the Group’s internal control and risk management systems in relation to the financial reporting process are: – contracts, development projects, land purchases and acquisition of property, plant and equipment are only proceeded with after due consideration by the Directors; − monthly reports for each contract and development project are prepared and reviewed by the Directors; − subsidiary Company reports are prepared for consideration by the Directors; and − treasury and cash management are undertaken by the Directors to ensure the Group remains net debt free. The Board has identified that the interest in one of its two Joint Venture companies as a material investment. For the two, both parties to the joint venture have equal interest in the joint venture and jointly manage it with the regular board meeting being held attended by both joint venture parties to discuss construction progress and financial position. All decisions are taken relating to the joint ventures between both parties. J. Smart & Co. (Contractors) PLC deals with the day to day administration and accounting function of the joint ventures. GOING CONCERN AND VIABILITY In order to ensure the Company and Group have adequate resources to ensure the continuing operations of the Company and Group for the foreseeable future the Directors consider current and future trading including investment property acquisitions and disposals and cash requirements. The Directors take account of prevailing market conditions in all areas of the Group’s activities and use their knowledge and experience relating to the Group’s investment property portfolio. Currently our construction activities are continuing in line with current programmes and recoverability of rents from our tenants remains high. The Directors’ opinion is that the Company and Group have adequate financial resources to allow the Company and Group to continue in operational existence for a period of at least twelve months from the date of approval of these financial statements and therefore consider the adoption of the going concern basis as appropriate for the preparation of these financial statements. The Directors also consider the viability of the Group over a longer period than twelve months from the date of approval of these financial statements, being a three-year period from the Statement of Financial Position date. The Directors’ statement on this review can be found in the Strategic Report. J. Smart & Co. (Contractors) PLC CORPORATE GOVERNANCE (continued) 31st JULY 2025 86197 J Smart Annual Report Text.indd 6986197 J Smart Annual Report Text.indd 69 15/12/2025 14:2515/12/2025 14:25 70 71 J. Smart & Co. (Contractors) PLC CORPORATE GOVERNANCE (continued) 31st JULY 2025 AUDIT, RISK AND INTERNAL CONTROL (continued) SIGNIFICANT JUDGEMENTS, KEY ASSUMPTIONS AND ESTIMATES As there is no Audit Committee, it is the responsibility of the Board to consider areas of the financial statements where there are significant areas of judgement regarding estimates and assumptions, which in turn have a significant effect on the amounts recognised in the financial statements. In respect of the 2025 financial statements these areas were: − Investment Property Valuations – the valuation of the investment property portfolio is completed by the Directors. The valuation of the property portfolio is inherently subjective and requires significant judgements and assumptions to be made especially around capitalisation yields and future rental streams. Details of impact on the value of the investment property portfolio incorporated into the financial statements is given in note 15 of the financial statements. The Directors appoint external valuers to value the portfolio to provide a sense check on their valuation. The valuations are discussed with the Auditor. − Long-term Contract Valuations and Provisions – the Directors consider contract performance to ensure appropriate revenue recognition. Future revenue, contract performance and stage of completion of contracts are considered and loss provisions determined and recognised where necessary. Both costs and revenues may require to be revised as future events unfold and uncertainties are resolved, which would have a direct impact on overall performance of these contracts. − Retirement Benefit Surplus – the valuation of the retirement benefit obligation is dependent upon a series of assumptions which are determined after the Directors take expert advice from the Group’s Actuary. Changes in these assumptions could have a material affect on the surplus disclosed in the financial statements, details of the impact of changes in these assumptions are given in note 31 of the financial statements. The Board discusses fully all issues relevant to the above areas and obtains where possible information and advice from external experts for consideration by the external Auditor and only when fully satisfied with the amounts associated with each area are they incorporated into the financial statements. RELATIONSHIP WITH EXTERNAL AUDITOR As the Company does not have an Audit Committee, it is the responsibility of the Chairman and the Company Secretary to maintain an appropriate relationship with the Group’s external Auditor and to review the scope and results of the audit and its cost effectiveness. The Board is responsible for monitoring and ensuring that the Auditor’s independence and objectivity is not compromised. The Board takes account of the external Auditor’s own policies and procedures regarding their integrity and independence and the professional standards they have to adhere to. The Board monitors non-audit services. The Board is responsible for setting the remuneration of the Auditor. REMUNERATION As the Company has no Non-Executive Directors it has not established a Remuneration Committee, it is therefore the responsibility of the Chairman to fix the remuneration packages of the Directors which are based on the scope of their duties and responsibilities. The main components of Directors’ remuneration are detailed in the Directors’ Remuneration Report and consist of basic salary, benefits and pension contributions based on basic salary only. There are no performance or incentive-based elements to the Directors’ remuneration and there are no share award schemes in place. The Chairman takes account of the remuneration packages of the workforce when determining the level of remuneration of the Directors, benefits given are in line with those given to employees and all contributions for pension contributions are at the same rates as those for employees. No Director has a service contract other than their initial employment contract and therefore periods of notice and termination payments are structured in accordance with current employment law. 86197 J Smart Annual Report Text.indd 7086197 J Smart Annual Report Text.indd 70 15/12/2025 14:2515/12/2025 14:25 70 71 J. Smart & Co. (Contractors) PLC CORPORATE GOVERNANCE (continued) 31st JULY 2025 REMUNERATION (continued) The remuneration policy, as approved by the shareholders at the 2024 Annual General Meeting, is regarded by the Chairman as fulfilling the provisions of the Code for: − Clarity – the policy is clear and understood by all Directors and by our shareholders who approved the policy. − Simplicity – the remuneration package does not include any complex structures. − Risk – as there are no performance-based elements to the remuneration it does not promote excessive risk taking by the Directors. − Predictability – as there are no performance-based elements to the remuneration the level of remuneration for the Directors can be predicted with reasonable accuracy. – Proportionality – remuneration levels are based on duties and responsibilities of the Directors and are not considered to be excessive. – Alignment to culture – as there are no incentive schemes the remuneration package is considered to be in line with the Company’s values and strategy. BY ORDER OF THE BOARD OF DIRECTORS Patricia Sweeney 20th November 2025 Company Secretary 86197 J Smart Annual Report Text.indd 7186197 J Smart Annual Report Text.indd 71 15/12/2025 14:2515/12/2025 14:25 72 73 ANNUAL STATEMENT On behalf of the Board of Directors, I present the Directors’ Remuneration Report for the year ended 31st July 2025. In addition to this statement the Report includes two other parts being the Policy Report and the Annual Report on Remuneration, which have been prepared in accordance with the provisions of the Companies Act 2006 and Schedule 8 of The Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. The Report also meets the requirements of the UK Listing Authority’s Listing Rules and the Disclosure Guidance and Transparency Rules. The Policy Report has been developed taking account of the principles of the UK Corporate Governance Code 2018. The shareholders approved the Policy at the 2024 Annual General Meeting and the policy was effective for three years from that date. The Annual Report on Remuneration will be subject to a vote at the 2025 Annual General Meeting. Our Auditor is required to report to the shareholders on certain information contained in the Annual Report on Remuneration and that it has been prepared in accordance with the Act and the Regulations. The information to be audited is appropriately marked. There have been no substantial changes to Executive Directors’ remuneration in the year. Our policy continues to be to provide remuneration packages that will retain and motivate the Directors to sustain the long term growth and value of the Company. DaviD w Smart 20th November 2025 Chairman THE POLICY REPORT As stated in the Corporate Governance Statement the Company does not appoint Non-Executive Directors and therefore the Company does not have a Remuneration Committee to set the Executive Directors’ Remuneration Policy. The Chairman fulfils the function of the Remuneration Committee. The Company’s remuneration policy is to provide remuneration packages that will retain and motivate the Directors to sustain the long term growth and value of the Company and is based on the scope of their duties and responsibilities. The Directors are not entitled to any performance related remuneration, long term incentive schemes or share options. The remuneration of the Directors is not performance related therefore no element of their remuneration is based on performance measures. The policy table below summarises the main components of Directors’ Remuneration: ELEMENT PURPOSE AND STRATEGY OPERATION BASE SALARY J. Smart & Co. (Contractors) PLC DIRECTORS’ REMUNERATION REPORT 31st JULY 2025 To pay a fair salary commensurate with the individual’s role, responsibilities and experience. Reviewed annually in July taking account of the individual’s role and experience and the salary increases of employees throughout the Group as a whole. No maximum level is set. 86197 J Smart Annual Report Text.indd 7286197 J Smart Annual Report Text.indd 72 15/12/2025 14:2515/12/2025 14:25 72 73 J. Smart & Co. (Contractors) PLC DIRECTORS’ REMUNERATION REPORT (continued) 31st JULY 2025 THE POLICY REPORT (continued) ELEMENT PURPOSE AND STRATEGY OPERATION BENEFITS PENSION The Chairman retains the right to make minor amendments to the above policy, to take account of regulatory, tax, legislative or administrative changes without obtaining shareholder approval for these amendments. No share options or long term incentive schemes are operated by the Company. Directors are entitled to claim relevant expenses incurred by them in respect of their duties. There are no provisions for the recovery of sums paid to Directors or the withholding of the payment of any sums to Directors. As all remuneration of Directors is fixed remuneration there is no need to illustrate, via a bar chart, the expected values of proposed remuneration as it does not contain any elements based on performance and therefore is not subject to change based on either the Company’s or Director’s performance. APPROACH TO RECRUITMENT OF DIRECTORS The Company’s approach to appointing new Executive Directors is to appoint from within the Company. As such the remuneration of the Director has already been set by the Company and the package held by the employee prior to appointment as a Director will remain in place. Consideration will be made of the increased duties and responsibilities that will apply post appointment as a Director and revision to their base salary may be made to reflect this. SERVICE CONTRACTS AND POLICY ON CESSATION No Director has a service contract with the Company, other than their initial employment contract and therefore periods of notice and termination payments are structured in accordance with current employment law. As a result of there being no service contracts no report under Listing Rules 6.6.6(6)R is required. CONSIDERATION OF EMPLOYMENT CONDITIONS ELSEWHERE IN COMPANY The Chairman when considering the remuneration of the Executive Directors takes into account the remuneration of employees across the Group as a whole. However, the Chairman does not consult directly with employees on the remuneration of the Executive Directors but is mindful of salary increases which are applied across the Group as a whole. To provide appropriate levels of retirement benefits. Depending on when a Director first became an employee of the Company will determine whether they are members of the Company’s Defined Benefit Pension Scheme or Defined Contribution Scheme. Company contributions to the Defined Benefit Scheme are currently 35.4% of base salary. Contribution levels are set in agreement between the scheme trustees and the Company and can therefore vary from time to time. Company contributions to the Defined Contribution Scheme are currently a minimum of 10% of base salary. To provide support to enable the Directors to carry out their duties effectively. Benefits include cash in lieu of a company car and private medical insurance. No maximum level is set as the costs of providing benefits fluctuate over time; however the costs are monitored to ensure they remain reasonable. 86197 J Smart Annual Report Text.indd 7386197 J Smart Annual Report Text.indd 73 15/12/2025 14:2515/12/2025 14:25 74 75 J. Smart & Co. (Contractors) PLC DIRECTORS’ REMUNERATION REPORT (continued) 31st JULY 2025 THE POLICY REPORT (continued) CONSIDERATION OF SHAREHOLDER VIEWS The Chairman considers all views and concerns he receives from shareholders especially at the Annual General Meeting when shareholders have the opportunity to ask questions of the Board on all matters relating to the Company including Directors’ Remuneration, or at any other time throughout the year. Although no direct communication was held by the Chairman with major shareholders prior to shaping the Remuneration Policy he believes that it is a responsible approach to remuneration and its policies in the past and for the future as evidenced by the level of approval of the of the Directors Remuneration Policy and 2024 Directors’ Remuneration Report at the 2024 Annual General Meeting, details of which are given in the Annual Report on Remuneration below. ANNUAL REPORT ON REMUNERATION The following provides details of how the remuneration policy was implemented in the year to 31st July 2025. Single Total Figure of Remuneration for Executive Directors (Audited Information) The following table presents the single figure for the total remuneration of each Executive Director for the year ended 31st July 2025 and the prior year: Taxable Salary Benefits 1 Pension Total £000 £000 £000 £000 David W Smart 90 6 96 88 2025 . . . . . . . 137 11 48 2 196 2024 . . . . . . . 132 11 51 2 194 John R Smart 2025 . . . . . . . 137 11 17 165 2024 . . . . . . . 132 11 16 159 Alasdair H Ross 2025 . . . . . . . 137 11 73 2 221 2024 . . . . . . . 132 11 58 2 201 Patricia Sweeney 2025 . . . . . . . 137 11 17 165 2024 . . . . . . . 132 11 16 159 Jane Oliver 2025 . . . . . . . 38 3 16 2 57 2024 . . . . . . . - - - - 1. Taxable benefits consist of cash in lieu of company car and private medical insurance. 2. Pension value represents the cash value of pension accrued over one year multiplied by 20 in line with new regulations with allowance for inflation and employee contributions. 3. Jane Oliver was appointed as a Director on 4th April 2025 86197 J Smart Annual Report Text.indd 7486197 J Smart Annual Report Text.indd 74 15/12/2025 14:2515/12/2025 14:25 74 75 J. Smart & Co. (Contractors) PLC DIRECTORS’ REMUNERATION REPORT (continued) 31st JULY 2025 ANNUAL REPORT ON REMUNERATION (continued) DIRECTORS’ PENSION ENTITLEMENTS David W Smart, Alasdair H Ross and Jane Oliver are members of the Company’s Defined Benefit Pension Scheme whilst John R Smart and Patricia Sweeney are members of the Company’s Group Personal Pension Plan. The Company’s Defined Benefit Pension Scheme was closed to new members in 2003. The normal date of retirement based on the scheme rules is 65 and there is no automatic entitlement to early retirement. Contributions by the employer under the scheme are 35.4% of pensionable salary. Accrued pension Accrued pension as at 31 July 2025 as at 31 July 2024 £000 £000 David W Smart . . . . . . . 58 54 Alasdair H Ross . . . . . . . 73 67 Jane Oliver . . . . . . . 36 - SCHEME INTEREST AWARDS (AUDITED INFORMATION) There were no scheme interests awarded in the year. PAYMENTS TO PAST DIRECTORS (AUDITED INFORMATION) The Company has no policy for compensation to Directors for loss of office or reimbursement of service to the Company on retirement. Any such payments will be at the discretion of the Board when they arise on an individual by individual basis. No such payments were made to past Directors in the year. PAYMENTS FOR LOSS OF OFFICE (AUDITED INFORMATION) No payments for loss of office were made to Directors in the year. STATEMENT OF DIRECTORS’ SHAREHOLDING AND SHARE INTERESTS (AUDITED INFORMATION) The Company has no policy that Directors are required to own shares in the Company. The interests of the Directors in the ordinary shares of the Company, including beneficial interests, are shown in the table below: Beneficial holdings (including interests of the Director’s connected persons) 4 Dec er 2020 31 July 2025 31 July 2024 or date of appointntment David W Smart . . . . . 782,750 12,782,750 12,782,750 John R Smart . . . . . 782,750 12,782,750 12,782,750 Alasdair H Ross . . . . . 150,000 150,000 150,000 Patricia Sweeney . . . . . 150,000 150,000 150,000 Jane Oliver . . . . . 150,000 - - There have been no changes in any Directors’ beneficial holdings between 31st July 2025 and 20th November 2025. 86197 J Smart Annual Report Text.indd 7586197 J Smart Annual Report Text.indd 75 15/12/2025 14:2515/12/2025 14:25 76 77 J. Smart & Co. (Contractors) PLC DIRECTORS’ REMUNERATION REPORT (continued) 31st JULY 2025 ANNUAL REPORT ON REMUNERATION (continued) PERFORMANCE GRAPH The graph below shows a comparison of the total shareholder return for the Company’s shares for each of the last ten financial years against the total shareholder return for the companies comprised in the FTSE EPRA/NAREIT UK index which the Company deems to be the most relevant to the Company as it includes companies in the same sector as the Company. The graph compares the value of £100 invested in J. Smart & Co. (Contractors) PLC, including re-invested dividends. Total Shareholder Return over the last ten financial years GROUP MANAGING DIRECTORS TOTAL REMUNERATION The following table details each of the Managing Directors their single figure of remuneration over the last ten financial years: 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 David W Smart 179 196 194 121 100 144 179 177 154 148 166 John R Smart 140 165 159 150 144 140 140 136 133 130 126 John M Smart 86 115 115 119 133 ANNUAL PERCENTAGE CHANGE IN REMUNERATION OF DIRECTORS AND EMPLOYEES The following table compares the annual percentage change in base salary and benefits between the Directors and the average for all other employees. Directors All other employees % change % change % change % change in salary in benefits in salary in benefits 2024-2025 +3.96 +3.00 +6.03 +3.00 2023-2024 +5.84 +3.00 +6.23 +2.00 2022-2023 +7.34 +4.00 +16.94 +3.00 2021-2022 +3.09 +2.00 +10.35 +3.00 2020-2021 +0.25% No change +3.00 +3.00 All Directors are paid the same level of base salary and receive the same level of benefits, therefore the percentage change as shown above relates to all Directors, with the exception of Jane Oliver who on her appointment in the year as a Director received a base salary increase of 32.89% and benefits increase of 8.84%. 86197 J Smart Annual Report Text.indd 7686197 J Smart Annual Report Text.indd 76 15/12/2025 14:2515/12/2025 14:25 76 77 J. Smart & Co. (Contractors) PLC DIRECTORS’ REMUNERATION REPORT (continued) 31st JULY 2025 ANNUAL REPORT ON REMUNERATION (continued) RELATIVE IMPORTANCE OF SPEND ON PAY The following table compares the total spend on remuneration of all employees of the Group, including Executive Directors, and the total amounts paid in distributions to shareholders for the years to 31st July 2025 and 31st July 2024: Difference in Difference as a 2025 2024 spend percentage £000 £000 £000 % Remuneration of employees . . . 8,953 7,848 1,105 (14.1 Total distributions paid . . . 1,920 2,179 (259) 11.9 (being dividends and share buy backs) IMPLEMENTATION OF EXECUTIVE DIRECTOR REMUNERATION POLICY FOR 2026 After taking into consideration Group employees’ salary increases for the year to 31st July 2026, an increase of 3.5% of base salary was awarded to all Directors except Jane Oliver who received an increase of 5.0%. Base salary from 1st July 2025 Base salary from 1st July 2024 £ £ David W Smart . . . . . . . 141,300 136,500 John R Smart . . . . . . . 141,300 136,500 Alasdair H Ross . . . . . . . 141,300 136,500 Patricia Sweeney . . . . . . . 141,300 136,500 Jane Oliver . . . . . . . 120,192 86,538 CONSIDERATIONS BY THE DIRECTORS OF MATTERS RELATING TO DIRECTORS’ REMUNERATION The Chairman is responsible for determining Directors’ Remuneration. No advice was sought in the year in considering Directors’ Remuneration. SUMMARY OF SHAREHOLDER VOTING AT THE 2024 ANNUAL GENERAL MEETING The 2024 Directors’ Remuneration Report was put to the shareholders for their approval at the 2024 Annual General Meeting. The resolution was passed on a show of hands. Details of the proxy votes lodged, including those at the discretion of the Chairman, are as follows: Total number % of votes cast of votes For . . . . . . . . . 26,622,512 100 Against . . . . . . . . . - - Total votes cast (excluding votes withheld) . . . . . 26,622,512 100 Votes withheld . . . . . . . . . - Total votes cast (including votes withheld) . . . . . 26,622,512 Votes withheld are not included in the proxy figures as they are not recognised as a vote in law. BY ORDER OF THE BOARD OF DIRECTORS Patricia Sweeney 20th November 2025 Company Secretary 86197 J Smart Annual Report Text.indd 7786197 J Smart Annual Report Text.indd 77 15/12/2025 14:2515/12/2025 14:25 78 79 J. Smart & Co. (Contractors) PLC STATEMENT OF DIRECTORS’ RESPONSIBILITIES 31st JULY 2025 STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND STATEMENT OF ACCOUNTS The Directors are responsible for preparing the Annual Report and Statement of Accounts in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the Group financial statements and have elected to prepare the company financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss for the Group and Company for that period. The Directors are also required to prepare financial statements in accordance with UK adopted international accounting standards. In preparing these financial statements, the Directors are required to: − select suitable accounting policies and then apply them consistently; – make judgements and accounting estimates that are reasonable and prudent; – state whether they have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006, subject to any material departures disclosed and explained in the financial statements; – state whether they have been prepared in accordance with UK adopted international accounting standards, subject to any material departures disclosed and explained in the financial statements; – prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business; and – prepare a Report of the Directors, a Strategic Report and Directors’ Remuneration Report which comply with the requirements of the Companies Act 2006. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that the Annual Report and Statement of Accounts, taken as a whole, are fair, balanced, and understandable and provides the information necessary for shareholders to assess the Group’s performance, business model and strategy. WEBSITE PUBLICATION The Directors are responsible for ensuring the Annual Report and Statement of Accounts are made available on a website. Financial statements are published on the Company’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the financial statements contained therein. 86197 J Smart Annual Report Text.indd 7886197 J Smart Annual Report Text.indd 78 15/12/2025 14:2515/12/2025 14:25 78 79 J. Smart & Co. (Contractors) PLC STATEMENT OF DIRECTORS’ RESPONSIBILITIES (continued) 31st JULY 2025 DIRECTORS’ RESPONSIBILITES PURSANT TO DTR4 The Directors confirm to the best of their knowledge: − The financial statements have been prepared in accordance with UK adopted international accounting standards and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group and Company. – The Annual Report and Statement of Accounts includes a fair review of the development and performance of the business and the financial position of the Group and Company, together with a description of the principal risks and uncertainties that they face. BY ORDER OF THE BOARD OF DIRECTORS Patricia Sweeney 20th November 2025 Company Secretary 86197 J Smart Annual Report Text.indd 7986197 J Smart Annual Report Text.indd 79 15/12/2025 14:2515/12/2025 14:25 80 81 J. Smart & Co. (Contractors) PLC INDEPENDENT AUDITOR’S REPORT 31st JULY 2025 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF J. SMART & CO. (CONTRACTORS) PLC OPINION ON THE FINANCIAL STATEMENTS In our opinion: • the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31st July 2025 and of the Group’s profit for the year then ended; • the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards; • the Parent Company financial statements have been properly prepared in accordance with UK adopted international accounting standards; and • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the financial statements of J. Smart & Co. (Contractors) PLC (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended 31st July 2025 which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated and Company Statement of Changes in Equity, Consolidated and Company Statement of Financial Position, Consolidated and Company Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards and as regards the Parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006. BASIS FOR OPINION We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the additional report to the Board. . INDEPENDENCE We were appointed by the Board to audit the financial statements for the year ending 31st July 2021 and subsequent financial periods. The period of total uninterrupted engagement including retenders and reappointments is five years covering the years ending 31st July 2021 to 31st July 2025. We remain independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited by that standard were not provided to the Group or the Parent Company. 86197 J Smart Annual Report Text.indd 8086197 J Smart Annual Report Text.indd 80 15/12/2025 14:2515/12/2025 14:25 80 81 J. Smart & Co. (Contractors) PLC INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2025 CONCLUSIONS RELATING TO GOING CONCERN In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent Company’s ability to continue to adopt the going concern basis of accounting included: • Evaluation of the Directors’ assessment in respect of the Group’s ability to continue as a going concern for at least twelve months from the date of this Annual Report. This included checking the mathematical accuracy of the models used; • Evaluation and challenge of the Directors’ key assumptions, cash flow projections and judgements made in respect to their going concern assumption. We did this by considering the appropriateness of the assumptions and judgements made by the Directors, based on our understanding of the business and challenging the Directors as to the accuracy of these assumptions and judgements relative to the equivalent metrics actually achieved in the recent history of the Group’s performance. We challenged these based on our understanding of the business in respect to construction contracts won, ability to deliver these within agreed timeframes and the probability of the cash flows materialising. We evaluated the Directors’ sensitivity analysis for appropriateness and performed our own sensitivity analysis based on our own assumptions and judgements comparing results to the Directors’ outcomes; • We performed stress tests to identify key areas that would cause the Group to fail and assessed the likelihood of these. We performed these sensitivities by identifying what key indicators such as revenue, cash and profit would need to reduce by before the Group would no longer have the ability to repay its debts as they became due. We considered new construction contracts and private housing sales to be some of the main assumptions made by management and sensitised these by assuming reduced trading profit to determine whether the Group had sufficient cash and reserves to absorb any such reasonable downside scenarios; • We performed procedures to identify unrecorded liabilities that may exist in the Group. These procedures included inspection of Director meeting minutes, post year end payments and invoice sampling, inspection of correspondence with management’s legal advisors including obtaining confirmation of no material claims or litigations of which we were not aware. This included testing the Directors’ ability to forecast by comparing previous forecasts to actual outturns and current year forecasts to post year end positions achieved and corroborating evidence such as quoted costs, especially in relation to construction contracts to identify any potentially material forecasting errors. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group and the Parent Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether the Directors considered it appropriate to adopt the going concern basis of accounting. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. 86197 J Smart Annual Report Text.indd 8186197 J Smart Annual Report Text.indd 81 15/12/2025 14:2515/12/2025 14:25 82 83 J. Smart & Co. (Contractors) PLC INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2025 OVERVIEW 2025 2024 Key audit matters Revenue recognition ✓ ✓ Valuation of defined benefit pension scheme obligations (including assumptions used) ✓ ✓ Valuation of investment properties ✓ ✓ Materiality Group financial statements as a whole £1,590,000 (2024: £1,300,000) based on 1% (2024:0.89%) of total assets AN OVERVIEW OF THE SCOPE OF OUR AUDIT Our Group audit was scoped by obtaining an understanding of the Group and its environment, the applicable financial reporting framework and the Group’s system of internal control. On the basis of this, we identified and assessed the risks of material misstatement of the Group financial statements including with respect to the consolidation process. We then applied professional judgement to focus our audit procedures on the areas that posed the greatest risks to the Group financial statements. We continually assessed risks throughout our audit, revising the risks where necessary, with the aim of reducing the Group risk of material misstatement to an acceptable level, in order to provide a basis for our opinion. The Group manages its operations from a central location in the UK and has common financial systems, processes and controls covering all significant components over which we will be performing audit procedures as part of the Group audit. In assessing the risk of material misstatement in the Group financial statements, and to ensure we obtained adequate quantitative coverage of significant categories of balances in the Annual Report and Statement of Accounts, we determined that two significant components, J. Smart & Co. (Contractors) PLC and Thomas Menzies (Builders) Limited, represented the principal business units within the Group. A full scope audit was undertaken on these components by the Group audit team. Additionally, in assessing the risk of material misstatement in the Group financial statements, we have scoped in further components consisting of C. & W. Assets Limited, Cramond Real Estate Company Limited, and St Andrews 1413 Limited. Having determined that the risks of material misstatement to the Group financial statements associated with these components could be isolated to specific financial statement areas, a full scope audit was not performed, with targeted testing performed instead on those balances determined to be of risk. As part of performing our Group audit, we have determined the components in scope as follows: • J. Smart & Co. (Contractors) PLC – full scope audit performed • Thomas Menzies (Builders) Limited – full scope audit performed • C. & W. Assets Limited – targeted testing performed on rental income, investment property, accounts payable, accounts receivable, cash, and taxation. • Cramond Real Estate Company Limited – targeted testing performed on investments and cash. • St Andrews 1413 Limited (Joint Venture Company) – targeted testing performed on investment property. For components in scope, as noted above, we used a combination of risk assessment procedures and further audit procedures to obtain sufficient appropriate evidence. These further audit procedures included: • procedures on the entire financial information of the component, including performing substantive procedures; and • procedures on one or more classes of transactions, account balances or disclosures. 86197 J Smart Annual Report Text.indd 8286197 J Smart Annual Report Text.indd 82 15/12/2025 14:2515/12/2025 14:25 82 83 J. Smart & Co. (Contractors) PLC INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2025 AN OVERVIEW OF THE SCOPE OF OUR AUDIT(continued) Procedures performed at the component level For the purpose of our Group audit, the Group consisted of 10 components in total, being the Parent Company, 7 subsidiaries and 2 joint ventures. These were comprised of 10 legal entities. No Group components were made up of more than one legal entity. Procedures were performed on the entire financial information of all the components listed as being in scope, except for C. & W. Assets Limited, Cramond Real Estate Company Limited, and St Andrews 1413 Limited, where testing was performed to address the risk of material misstatement in the financial statement areas listed above. The Group engagement team has performed all procedures directly, and has not involved component auditors in the Group audit. Procedures performed centrally We considered there to be a high degree of centralisation of financial reporting and commonality of controls and similarity of the Group’s activities and business lines in relation to all relevant financial statement areas. We therefore designed and performed procedures centrally in these areas. The Group operates a centralised IT function that supports IT processes for certain components. This IT function was subject to specified risk-focused audit procedures, predominantly the testing of the relevant IT general controls. Changes from the prior year We performed procedures on one or more classes of transactions, account balance or disclosures of Cramond Real Estate Limited and St Andrews 1413 Limited which represented a change from the prior year. CLIMATE CHANGE Our work on the assessment of potential impacts on climate-related risks on the Group’s operations and financial statements included: • Enquiries and challenge of management to understand the actions they have taken to identify climate-related risks and their potential impacts on the financial statements and adequately disclose climate-related risks within the Annual Report; • Our own qualitative risk assessment taking into consideration the sector in which the Group operates and how climate change affects this particular sector; and • Review of the minutes of Board meetings and other papers related to climate change and performed a risk assessment as to how the impact of the Group’s commitment as set out in the Strategic Report may affect the financial statements and our audit. We challenged the extent to which climate-related considerations, including the expected cash flows from the initiatives and commitments have been reflected, where appropriate, in the Management’s going concern assessment and viability assessment. We also assessed the consistency of managements disclosures included as ‘Statutory Other Information’ in the Strategic Report with the financial statements and with our knowledge obtained from the audit. Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters materially affected by climate-related risks and related commitments. 86197 J Smart Annual Report Text.indd 8386197 J Smart Annual Report Text.indd 83 15/12/2025 14:2515/12/2025 14:25 84 85 J. Smart & Co. (Contractors) PLC INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2025 KEY AUDIT MATTER How the scope of our audit addressed the key audit matter REVENUE RECOGNITION (Note 1 and 3) The Group’s revenue is generated from construction and investment property activities. These activities result in revenue that is derived from construction contracts, the sale of private housing and investment property rental revenue. Revenue from construction contracts (disaggregated into Social Housing, Civil Engineering, Industrial and General Construction in note 3) is recognised based on different, individual, commercial contract terms. This includes areas of judgement such as when to recognise the right to revenue arising from the value of work performed based on valuations and the identification and recognition of losses in respect to loss making contracts. Given the nature and complexity of construction revenue and its importance to the activities of the business, we considered there to be a significant risk of material misstatement arising in respect of the completeness, accuracy, cut- off and existence of incomplete construction revenue contracts. As a result, we considered the revenue recognition from incomplete construction revenue contracts to be a key audit matter. We reviewed the revenue accounting policies and practices as well as the basis of material recognition estimates for consistency of application and whether they were in accordance with the requirements of the applicable accounting standards. We tested the Group’s material revenue streams individually according to their characteristics, performing detailed testing, as articulated in the following paragraphs below, of a sample of contracts during the year based on pre-determined metrics (related to contribution to revenue and profit) designed to address higher risk contracts and areas of judgement. As a result of our procedures, 100% of the incomplete construction contract were tested. We engaged in detailed discussions with the relevant Commercial Directors and other key individuals in ascertaining and verifying the judgements made for each contract selected for testing. This included testing the recoverability of contract balances and trade debtors, certification of works and billing by matching the year end balance to post year end receipts, where material. As part of this process, we critically assessed and challenged the recognition of revenue and profit by reference to costs incurred to total costs as well as valuations performed at year end in comparison to our site attendance and other corroborating evidence such as the revenue contract agreement, testing of material variations and claims, as well as year-end payment certificates and cash received. Through our audit work we obtained an understanding of the key estimates taken by management around these contracts and sought detailed explanations and support for judgements taken, in particular where material claims for variations had been recognised. We then obtained evidence to support recoverability of these variations or claims by reference to customer agreement as well as cash payment of these variations and, where appropriate, consulted with management’s experts (in the form of Quantity Surveyors and Commercial Directors) to gain an understanding of the basis for the judgements made. We assessed the competence and expertise of management’s surveyors. We reviewed legal correspondence relating to significant claims and variations to identify evidence contrary to our understanding and management’s judgements noting that there were none. Our revenue and contract profit recognition testing focused on the timing of and amounts recognised in respect of any variable revenue to check that it is improbable that a significant reversal of amounts recognised will occur. KEY AUDIT MATTERS Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 86197 J Smart Annual Report Text.indd 8486197 J Smart Annual Report Text.indd 84 15/12/2025 14:2515/12/2025 14:25 84 85 J. Smart & Co. (Contractors) PLC INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2025 KEY AUDIT MATTER How the scope of our audit addressed the key audit matter REVENUE RECOGNITION (Note 1 and 3) (continued) We agreed the calculations underlying the estimate of costs to complete in relation to ongoing contracts to supporting agreements and documentation. For a sample of projects, we carried out site visits to improve our understanding of the projects and their risk. As part of testing of construction contracts, we also agreed a sample of applications for payment to customer correspondence and agreed a sample to cash receipt. We checked that costs had been appropriately allocated to a particular contract, including the application of payroll, subcontractor and purchasing costs by sampling all costs in the year and checking that the corroborative evidence obtained in relation to these samples supported the allocation of the costs to the particular contract being tested. As part of our detailed testing, we reviewed post year end performance of contracts to corroborate estimates taken at the year-end in respect of costs expected to be incurred and challenged assumptions which appeared inconsistent with actual post year end performance. This included assessing the reliability of management estimates considering the positions adopted in previous years compared to actual outturn. Key observations Based on our procedures we found management’s judgements in respect of revenue recognition to be appropriate. KEY AUDIT MATTERS (continued) 86197 J Smart Annual Report Text.indd 8586197 J Smart Annual Report Text.indd 85 15/12/2025 14:2515/12/2025 14:25 86 87 J. Smart & Co. (Contractors) PLC INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2025 KEY AUDIT MATTER How the scope of our audit addressed the key audit matter VALUATION OF DEFINED BENEFIT PENSION SCHEME OBLIGATIONS (including assumptions used) (Note 1 and 31) The Group has a defined benefit pension scheme. The pension valuation is dependent on market conditions and key assumptions made by management, relating to investment markets, discount rate, inflation expectations and life expectancy assumptions. The Group has recognised the full scheme surplus of assets over the scheme obligations which represents another area of significant judgement. The valuation of the defined benefit pension scheme obligation, which reduces the surplus, represented a key audit matter given that the setting of the assumptions is complex and requires the exercise of significant management judgement with the support of third party actuaries. The related sensitivities of any changes in assumptions are disclosed in note 31. In testing the valuation of the pension obligation, we utilised pension actuarial experts to review the key actuarial assumptions used, both financial and demographic and, in conjunction with our experts, considered the appropriateness of the methodology utilised to derive these assumptions. We benchmarked the scheme assumptions against publicly available published data. Specifically, we challenged the discount rate, inflation and mortality assumptions applied in the calculation with the assistance of our pension experts in benchmarking the assumptions applied against comparable third party data and assessing the appropriateness of the assumptions in the context of the Group’s own position. We performed sensitivity analysis on the assumptions determined by the Directors. We considered the recoverability of the surplus to gain assurance that the Group has an unconditional right to recover the net asset. We have seen legal confirmation that confirmed that the Group has unconditional right to the scheme surplus and challenged this by reference to the Trust Deed, to determine whether this is appropriate. We considered the competence, independence and ability to perform the work of the third-party actuaries used by management by obtaining independence confirmations as well as checking that they are qualified actuaries. We assessed the disclosure of the net pension asset and the related assumptions and sensitivities in the financial statements against the relevant accounting framework and the findings of our work. Key observations We have not identified any evidence to suggest that the methodology and assumptions applied in relation to determining the pension valuation are not within an acceptable range. KEY AUDIT MATTERS (continued) 86197 J Smart Annual Report Text.indd 8686197 J Smart Annual Report Text.indd 86 15/12/2025 14:2515/12/2025 14:25 86 87 J. Smart & Co. (Contractors) PLC INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2025 KEY AUDIT MATTER How the scope of our audit addressed the key audit matter VALUATION OF INVESTMENT PROPERTIES (Note 1 and 15) The Group has a significant portfolio of investment property. Judgement is required by management in terms of the assessment of the effect on the valuation of the individual nature of each property, its location, expected future rental income, tenure and tenancy profiles, prevailing market yields and comparable market conditions. Input inaccuracies or unreasonable bases used in these assumptions could result in a material misstatement in the financial statements. This area represented a key audit matter given that the setting of these assumptions is complex and requires the exercise of significant management judgement with the support of third party valuation experts. We audited the investment property portfolio, with the assistance of our experts, who are independent 3rd party RICS valuers. Our independent experts reviewed a sample of the investment property portfolio valuations in order to assess the key assumptions used, considered the appropriateness of the methodology utilised to derive these assumptions and the appropriateness of the valuation technique used. We performed detailed testing on a sample of properties, agreeing the key aspects such as the nature of each property, its location, expected future rental income, tenure and tenancy profiles and prevailing market yields to corroborating documentation, to check that the valuations are based on accurate and reliable information in relation to those properties. All properties at year end were agreed to the prior year listing to confirm the completeness of the portfolio. We performed further tests such as inspection of Director meeting minutes to identify any unrecorded disposals. A sample of properties was physically inspected by our audit experts. We considered the competence, independence and ability to perform the work of the third party valuation experts used by management by obtaining independence confirmations as well as checking that they are qualified valuers. Assumptions made by management in their valuation, such as rental amounts and yields, were challenged by agreeing a sample of these assumptions to corroborating evidence in the form of rental contracts and engagement of our own experts to assist in reviewing these, to consider whether they are appropriate. The completeness and accuracy of disclosure in the financial statements were checked with reference to our knowledge obtained during the audit and the requirements of the relevant accounting standards. Key observations We have not identified any evidence to suggest that the methodology and assumptions applied in relation to determining the investment properties valuation are not within a tolerable range. Based on our procedures we found management’s valuation in respect of investment properties to be appropriate. KEY AUDIT MATTERS (continued) 86197 J Smart Annual Report Text.indd 8786197 J Smart Annual Report Text.indd 87 15/12/2025 14:2515/12/2025 14:25 88 89 OUR APPLICATION OF MATERIALITY We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of reasonable users that are taken on the basis of the financial statements. In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality as follows: J. Smart & Co. (Contractors) PLC INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2025 Group financial statements 2025 2024 2025 2024 £197,000£536,000£1,300,000£1,580,000Materiality 0.42% of total assets at the year end 1% of total assets at the year end 0.89% of total assets at the year end 1% of total assets at the year end Basis for determining materiality We consider this to be the principal consideration in assessing the financial performance of the Parent Company as the Parent Company considers total assets to be the key performance indicator which demonstrates less volatility than other performance measures. We consider this to be the principal consideration in assessing the financial performance of the Group as the Group considers total assets to be the key performance indicator, which demonstrates less volatility than other performance measures. Rationale for the benchmark applied Parent company financial statements £138,000£375,000£910,000£1,106,000 Performance materiality The rationale for the percentage applied was determined based on the expected total value of known and likely misstatements, our knowledge of the Parent Company’s internal controls and management’s attitude towards proposed adjustments. The rationale for the percentage applied was determined based on the expected total value of known and likely misstatements, our knowledge of the Group’s internal controls and management’s attitude towards proposed adjustments. Rationale for the percentage applied for performance materiality 70% of Materiality70% of MaterialityBasis for determining performance materiality 86197 J Smart Annual Report Text.indd 8886197 J Smart Annual Report Text.indd 88 15/12/2025 14:2515/12/2025 14:25 88 89 J. Smart & Co. (Contractors) PLC INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2025 OUR APPLICATION OF MATERIALITY (continued) Component performance materiality For the purposes of our Group audit opinion, we set performance materiality for each component of the Group, apart from the Parent Company whose materiality and performance materiality are set out above, based on a percentage of between 4.5% and 56% (2024: 46.2% ) of Group performance materiality dependent on a number of factors including the relative size of components, whether significant changes occurred at the component, the disaggregation of financial information across the Group, the control environment, the public interest in any given component, whether the component was a source of significant Group risks and our assessment of the risk of material misstatement of those components. Component performance materiality ranged from £49,700 to £624,000 (2024: £560,000). Reporting threshold We agreed with the Board that we would report to them all individual audit differences in excess of £47,700, (2024: £39,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds. OTHER INFORMATION The Directors are responsible for the other information. The other information comprises the information included in the document entitled Annual Report and Statement of Accounts other than the financial statements and our Auditor’s Report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. CORPORATE GOVERNANCE STATEMENT The UK Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Parent Company’s compliance with the provisions of the UK Corporate Governance Statement specified for our review. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit. GOING CONCERN AND LONGER-TERM VIABILITY • The Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified set out on page 12; and • The Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers and why the period is appropriate set out on page 20. • The Directors’ statement on whether they have a reasonable expectation that the Group will be able to continue in operation and meet its liabilities set out on page 20. OTHER CODE PROVISIONS • Directors’ statement on fair, balanced and understandable set out on page 69; • Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 18 to 20; • The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems set out on page 69. 86197 J Smart Annual Report Text.indd 8986197 J Smart Annual Report Text.indd 89 15/12/2025 14:2515/12/2025 14:25 90 91 J. Smart & Co. (Contractors) PLC INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2025 OTHER COMPANIES ACT 2006 REPORTING Based on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below. RESPONSIBILITIES OF DIRECTORS As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so. STRATEGIC REPORT AND REPORT OF THE DIRECTORS In our opinion, based on the work undertaken in the course of the audit: • the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and • the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Group and Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. DIRECTORS’ REMUNERATIONS In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006. CORPORATE GOVERNANCE STATEMENT In our opinion, based on the work undertaken in the course of the audit the information about internal control and risk management systems in relation to financial reporting processes and about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Guidance and Transparency Rules sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in this information. In our opinion, based on the work undertaken in the course of the audit information about the Parent Company’s Corporate Governance Code and practices and about its administrative, management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules other than as laid out on page 68. We have nothing to report arising from our responsibility to report if a Corporate Governance Statement has not been prepared by the Parent Company. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: • adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or • the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or • certain disclosures of Directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit. 86197 J Smart Annual Report Text.indd 9086197 J Smart Annual Report Text.indd 90 15/12/2025 14:2515/12/2025 14:25 90 91 J. Smart & Co. (Contractors) PLC INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2025 AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Extent to which the audit was capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. Non-compliance with laws and regulations Based on: • Our understanding and accumulated knowledge of the Group and its subsidiaries and the industry in which it operates; • Discussion with management and those charged with governance; and • Obtaining an understanding of the Group’s policies and procedures regarding compliance with laws and regulations, we considered the significant laws and regulations to be the applicable accounting framework, UK corporate tax, VAT and employment tax legislation. The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be the Health and Safety legislation, UK Companies Act 2006, industry related regulations impacting the construction industry, and the Listing Rules. Our procedures in respect of the above included: • Review of minutes of meeting of those charged with governance for any instances of non-compliance with laws and regulations; • Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and regulations; • Review of financial statement disclosures and agreeing to supporting documentation; • Involvement of tax specialists in the audit; and • Review of legal expenditure accounts to understand the nature of expenditure incurred. Fraud We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included: • Enquiry with management and those charged with governance regarding any known or suspected instances of fraud; • Obtaining an understanding of the Group’s policies and procedures relating to: o Detecting and responding to the risks of fraud; and o Internal controls established to mitigate risks related to fraud. • Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud; • Discussion amongst the engagement team as to how and where fraud might occur in the financial statements; • Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; • Review journals of material magnitude, reviewing the types of journals posted by personnel and, reviewing the relationships between financial statements areas impacted by journals to revenue and investment property. • Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these; and • Involvement of our forensics specialists in identifying key risk areas susceptible to fraud. Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of controls, revenue recognition (completeness, accuracy, cut-off and evidence) relating to incomplete construction contract revenue and construction related activities such as supplier changes, petty cash misappropriation, manipulation of expense accounts and related collusion. 86197 J Smart Annual Report Text.indd 9186197 J Smart Annual Report Text.indd 91 15/12/2025 14:2515/12/2025 14:25 92 93 J. Smart & Co. (Contractors) PLC INDEPENDENT AUDITOR’S REPORT (continued) 31st JULY 2025 AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS (continued) Fraud (continued) Our procedures in respect of the above included: • Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to the recognition of revenue, the assumptions and estimates used in the valuation of investment property and private housing inventory, and the defined pension benefit scheme net asset (for more information on how we audited these areas, refer to the “Key audit matters” section above). We sought to identify any areas of management bias by corroborating these estimates and judgements and challenging management as to their appropriateness based on third party empirical evidence, recalculating management’s estimate, following up on information in relation to estimates to the date of issue as well as in some cases developing our own estimate range and comparing this to management’s estimate; • Designed targeted audit tests to address the areas identified at the planning stage with our forensic specialists which included: o testing of unusual cash payments identified through use of our data analytics software to corroborating evidence; o comparison of bank accounts between suppliers and payroll in order to identify any duplicates; o reviewing supplier transactions to identify unusual items and testing those items that meet a pre-determined threshold to corroborating evidence; o testing supplier changes to corroborating evidence to identify unauthorised or potentially fraudulent changes; o reviewing petty cash movements in order to identify any large or unusual items which could be indicative of potentially fraudulent payments and testing these to corroborating evidence where identified. • In response to the risk of fraud in revenue recognition relation to cut-off, we performed the procedures set out in the key audit matters section of the report; • Identifying and testing journal entries to corroborating evidence, in particular journal entries posted with specific keywords, rounded journals and an unpredictable sample of journals; and • Testing payroll calculations and payments to identify potential fraud and in order to incorporate unpredictability into our testing by checking those processors of payroll only received what is contractually due to them with reference to their employment contracts. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non- compliance with laws and regulations throughout the audit. Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it. A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities. This description forms part of our Auditor’s Report. USE OF OUR REPORT This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those matters we are required to state to them in an Auditor’s Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. aliStair rae (Senior Statutory Auditor) For and on behalf of BDO LLP, Statutory Auditor Edinburgh, UK 20th November 2025 BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127) 86197 J Smart Annual Report Text.indd 9286197 J Smart Annual Report Text.indd 92 15/12/2025 14:2515/12/2025 14:25 92 93 Notes 2025 2024 £000 £000 REVENUE . . . . . . . . 3 23,240 22,020 Cost of sales . . . . . . . . (18,910) (17,993) GROSS PROFIT . . . . . . . . 4,330 4,027 Other operating income . . . . . . 4 83 163 Administrative expenses . . . . . . (4,932) (4,518) OPERATING LOSS BEFORE LOSS ON SALE OF INVESTMENT PROPERTIES AND NET SURPLUS ON VALUATION OF INVESTMENT PROPERTIES . . . . . . (519) (328) Loss on sale of investment properties . . . . . (49) - Net surplus on valuation of investment properties . . 15 5,816 994 OPERATING PROFIT . . . . . . 6 5,248 666 Share of profit in Joint Ventures . . . . . 16(a) 48 320 Income from financial assets . . . . . . 7 43 49 Loss on sale of financial assets . . . . . . (6) (123) Net surplus on valuation of financial assets . . . 17 186 123 Finance income . . . . . . . 8 1,361 1,346 Finance costs . . . . . . . 8 (12) (16) PROFIT BEFORE TAX . . . . . . . 10 6,868 2,365 Taxation . . . . . . . . . 9 (1,756) (692) PROFIT FOR YEAR ATTRIBUTABLE TO EQUITY SHAREHOLDERS . 5,1 12 1,673 EARNINGS PER SHARE Basic and diluted . . . . . . . 12 13.07p 4.22p J. Smart & Co. (Contractors) PLC CONSOLIDATED INCOME STATEMENT for the year ended 31st July 2025 86197 J Smart Annual Report Text.indd 9386197 J Smart Annual Report Text.indd 93 15/12/2025 14:2515/12/2025 14:25 94 95 J. Smart & Co. (Contractors) PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31st July 2025 Notes 2025 2024 £000 £000 PROFIT FOR THE YEAR . . . . . . . 5,112 1,673 OTHER COMPREHENSIVE INCOME Items that will not be subsequently reclassified to Income Statement: Remeasurement gains on defined benefit pension scheme . . 31 1,464 1,802 Deferred taxation on remeasurement gains on defined benefit pension scheme . . . . . 25 (366) (450) TOTAL ITEMS THAT WILL NOT BE SUBSEQUENTLY RECLASSIFIED TO INCOME STATEMENT . . . . . 1,098 1,352 TOTAL OTHER COMPREHENSIVE INCOME . . . . 1,098 1,352 TOTAL COMPREHENSIVE INCOME FOR THE YEAR, NET OF TAX . 6,210 3,025 ATTRIBUTABLE TO EQUITY SHAREHOLDERS . . . . 6,210 3,025 86197 J Smart Annual Report Text.indd 9486197 J Smart Annual Report Text.indd 94 15/12/2025 14:2515/12/2025 14:25 94 95 J. Smart & Co. (Contractors) PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY as at 31st July 2025 Capital Share Redemption Retained Capital Reserve Earnings Total £000 £000 £000 £000 At 1st August 2023 . . . . . . . 802 206 124,459 125,467 Profit for the year . . . . . . . – – 1,673 1,673 Other comprehensive income . . . . . . – – 1,352 1,352 TOTAL COMPREHENSIVE INCOME FOR THE YEAR . . . – – 3,025 3,025 TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY Shares purchased and cancelled . . . . . (13) – (889) (902) Transfer to Capital Redemption Reserve . . . . – 13 (13) – Dividends . . . . . . . . – – (1,277) (1,277) TOTAL TRANSACTIONS WITH OWNERS . . . . . (13) 13 (2,179) (2,179) At 31st July 2024 . . . . . . . 789 219 125,305 126,313 Profit for the year . . . . . . . – – 5,1 12 5,112 Other comprehensive income . . . . . . – – 1,098 1,098 TOTAL COMPREHENSIVE INCOME FOR THE YEAR . . . – – 6,210 6,210 TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY Shares purchased and cancelled . . . . . (10) – (646) (656) Transfer to Capital Redemption Reserve . . . . – 10 (10) – Dividends . . . . . . . . – – (1,264) (1,264) TOTAL TRANSACTIONS WITH OWNERS . . . . . (10) 10 (1,920) (1,920) At 31st July 2025 . . . . . . . . 779 229 129,595 130,603 86197 J Smart Annual Report Text.indd 9586197 J Smart Annual Report Text.indd 95 15/12/2025 14:2515/12/2025 14:25 96 97 J. Smart & Co. (Contractors) PLC COMPANY STATEMENT OF CHANGES IN EQUITY as at 31st July 2025 Capital Share Redemption Retained Capital Reserve Earnings Total £000 £000 £000 £000 At 1st August 2023 . . . . 802 206 33,236 34,244 Loss for the year . . . . . - - ( (49) (49) Other comprehensive income . . . - - 1,352) 1,352) TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - 1,303 1,303) TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY Shares purchased and cancelled . . (13) - (889) (902) Transfer to Capital Redemption Reserve . - 13 (13) - Dividends . . . . . - - (1,277) (1,277) TOTAL TRANSACTIONS WITH OWNERS . . (13) 13 (2,179) (2,179) At 31st July 2024 . . . . . 789 219 32,360 33,368 Profit for the year . . . . - - 1,519 1,519 Other comprehensive income . . . - - 1,098) 1,098) TOTAL COMPREHENSIVE INCOME FOR THE YEAR - - 2,617) 2,617) TRANSACTIONS WITH OWNERS, RECORDED DIRECTLY IN EQUITY Shares purchased and cancelled . . (10) - (646) (656) Transfer to Capital Redemption Reserve . - 10 (10) - Dividends . . . . . - - (1,264) (1,264) TOTAL TRANSACTIONS WITH OWNERS . . (10) 10 (1,920) (1,920) At 31st July 2025 . . . . . 779 229 33,051 34,065 86197 J Smart Annual Report Text.indd 9686197 J Smart Annual Report Text.indd 96 15/12/2025 14:2515/12/2025 14:25 96 97 J. Smart & Co. (Contractors) PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31st July 2025 Notes 2025 2024 £000 £000 NON-CURRENT ASSETS Property, plant and equipment . . . . . . 13 3,026 2,743 Investment properties . . . . . . . 15 79,401 70,038 Investments in Joint Ventures . . . . . . 16 1 13 65 Financial assets . . . . . . . . 17 1,693 1,032 Trade and other receivables . . . . . . 21 2,155 - Retirement benefit surplus . . . . . . 31 25,784 23,040 Deferred tax assets . . . . . . . 25 211 54 1 12,383 96,972 CURRENT ASSETS Assets held for sale . . . . . . . 18 - 14,199 Inventories . . . . . . . . 19 16,408 18,710 Contract assets . . . . . . . . 20 455 944 Corporation tax asset . . . . . . . 2 700 255 Trade and other receivables . . . . . . 21 2,570 2,435 Monies held on deposit . . . . . . 22 53 51 Cash and cash equivalents . . . . . . 22 25,766 12,932 45,952 49,526 TOTAL ASSETS . . . . . . . . 158,335 146,498 NON-CURRENT LIABILITIES Deferred tax liabilities . . . . . . . 25 12,107 9,828 Lease liabilities . . . . . . . 26 212 212 12,319 10,040 CURRENT LIABILITIES Trade and other payables . . . . . . 23 4,573 4,713 Lease liabilities . . . . . . . 26 1 1 Bank overdraft . . . . . . . 22 10,839 5,431 15,413 10,145 TOTAL LIABILITIES . . . . . . . 27,732 20,185 NET ASSETS . . . . . . . . 130,603 126,313 EQUITY Called up share capital . . . . . . . 27 779 789 Capital redemption reserve . . . . . . 27 229 219 Retained earnings . . . . . . . 27 129,595 125,305 TOTAL EQUITY . . . . . . . . 130,603 126,313 The financial statements on pages 93 to 139 were approved by the Board of Directors and authorised for issue on 20th November 2025 and were signed on its behalf by: DaviD w Smart John r Smart Director Director Company Number SC025130 86197 J Smart Annual Report Text.indd 9786197 J Smart Annual Report Text.indd 97 15/12/2025 14:2515/12/2025 14:25 98 99 J. Smart & Co. (Contractors) PLC COMPANY STATEMENT OF FINANCIAL POSITION as at 31st July 2025 Notes 2025 2024 £000 £000 NON-CURRENT ASSETS Property, plant and equipment . . . . . . 14 2,628 2,267 Investments in Subsidiaries and Joint Ventures . . . 16 615 615 Trade and other receivables . . . . . . 21 2,519 364 Retirement benefit surplus . . . . . . 31 25,784 23,040 Deferred tax assets . . . . . . 25 2 - 31,548 26,286 CURRENT ASSETS Inventories . . . . . . . . 19 16,040 18,330 Contract assets . . . . . . . . 20 233 427 Trade and other receivables . . . . . . 21 4,440 808 Corporation tax asset . . . . . . . 1,348 1,256 Cash and cash equivalents . . . . . . 22 - - 22,061 20,821 TOTAL ASSETS . . . . . . . . 53,609 47,107 NON-CURRENT LIABILITIES Deferred tax liabilities . . . . . . . 25 6,624 5,837 CURRENT LIABILITIES Trade and other payables . . . . . . 23 2,939 3,667 Bank overdraft . . . . . . . 22 9,981 4,235 12,920 7,902 TOTAL LIABILITIES . . . . . . . 19,544 13,739 NET ASSETS . . . . . . . . 34,065 33,368 EQUITY Called up share capital . . . . . . . 27 779 789 Capital redemption reserve . . . . . . 27 229 219 Retained earnings . . . . . . . 27 33,057 32,360 TOTAL EQUITY . . . . . . . . 34,065 33,368 A separate Statement of Comprehensive Income for the Company has not been presented as permitted by Section 408 of the Companies Act 2006. The profit for the Company is £1,519,000 (2024, loss £49,000). The financial statements on pages 93 to 139 were approved by the Board of Directors and authorised for issue on 20th November 2025 and were signed on its behalf by: DaviD w Smart John r Smart Director Director Company Number SC025130 86197 J Smart Annual Report Text.indd 9886197 J Smart Annual Report Text.indd 98 15/12/2025 14:2515/12/2025 14:25 98 99 J. Smart & Co. (Contractors) PLC CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31st July 2025 Notes 2025 2024 £000 £000 CASH FLOWS FROM OPERATING ACTIVITIES ) Profit after tax . . . . . . . . 5,112 1,673 Tax charge for year . . . . . . 1,756 692 Profit before tax . . . . . . . . 6,868 2,365 Adjustments for: Share of profits from Joint Ventures . . . . 16(a) (48) (320) Depreciation . . . . . . . . 13 590 455 Unrealised surplus on valuation of investment properties . . 15 (5,816) (994) Loss on sale of investment properties . . . . 49 - Unrealised surplus on valuation of financial assets . . . 17 (186) (123) Profit on sale of property, plant and equipment . . . 4 (83) (1 14) Loss on sale of financial assets . . . . . . 6 123 Change in retirement benefits . . . . . . 31 (123) (154) Interest received . . . . . . . 8 (1,361) (1,346) Interest paid . . . . . . . . 8 12 16 Change in inventories . . . . . . . 2,302 (950) Change in contract assets . . . . . . 489 (91 1) Change in receivables . . . . . . . (135) (180) Change in payables . . . . . . . (140) 1,801 CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES . . 2,424 (332) Tax paid . . . . . . . . (445) (178) NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES . 1,979 (510) CASH FLOWS FROM INVESTING ACTIVITIES Additions to property, plant and equipment . . . . 13 (897) (1,554) Additions to investment properties . . . . . 15 (183) (81) Expenditure on own work capitalised - investment properties . 15 (3,364) (1,765) Proceeds of sale of property, plant and equipment . . . 107 132 Proceeds of sale on investment properties . . . 18 14,150 - Purchase of financial assets . . . . . . 17 (518) (51) Proceeds of sale of financial assets . . . . . 37 244 Monies held on deposit . . . . . . (2) (2) Interest received . . . . . . . 8 204 357 Interest paid . . . . . . . 8 - (4) Loan (to)/repaid from Joint Venture . . . . . 34 (2,155) 3,010 Return of capital contribution to Joint Ventures . . . 16(a) - 1,040 Dividend received from Joint Venture . . . . . 16(a) - 7 11 NET CASH INFLOW FROM INVESTING ACTIVITIES . 7,379 2,037 86197 J Smart Annual Report Text.indd 9986197 J Smart Annual Report Text.indd 99 15/12/2025 14:2515/12/2025 14:25 100 101 Notes 2025 2024 £000 £000 CASH FLOWS FROM FINANCING ACTIVITIES Interest costs on leases . . . . . . . 8 (12) (12) Purchase of own shares . . . . . . . 27 (656) (902) Dividends paid . . . . . . . . 11 (1,264) (1,277) NET CASH OUTFLOW FROM FINANCING ACTIVITIES . . . (1,932) (2,191) INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS . . 28 (b) 7,426 (664) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR . . 28 (a) 7,501 8,165 CASH AND CASH EQUIVALENTS AT END OF YEAR . . . 28 (a) 14,927 7,501 J. Smart & Co. (Contractors) PLC CONSOLIDATED STATEMENT OF CASH FLOWS (continued) for the year ended 31st July 2025 86197 J Smart Annual Report Text.indd 10086197 J Smart Annual Report Text.indd 100 15/12/2025 14:2515/12/2025 14:25 100 101 J. Smart & Co. (Contractors) PLC COMPANY STATEMENT OF CASH FLOWS for the year ended 31st July 2025 Notes 2025) 2024) £000) £000) CASH FLOWS FROM OPERATING ACTIVITIES Profit/(loss) after tax . . . . . . . 1,519 (49) Tax credit . . . . . . . . (229) (482) Profit/(loss) before tax . . . . . . . 1,290 (531) Adjustments for: Depreciation . . . . . . . . 14 390 255 Profit on sale of property, plant and equipment . . . (63) (79) Write off investment in subsidiary . . . . . - 668 Dividend received from Subsidiaries and Joint Ventures . . 34 (2,500) (2,311) Change in retirement benefits . . . . . 31 (123) (154) Interest received . . . . . . . (1,160) (1,134) Change in inventories . . . . . . . 2,290 (950) Change in contract assets . . . . . . 194 (427) Change in receivables . . . . . . . (3,632) 5,680 Change in payables . . . . . . . (728) 1,074 CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES . . (4,042) 2,091 Tax received . . . . . . . . 556 599 NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES . (3,486) 2,690 CASH FLOWS FROM INVESTING ACTIVITIES Additions to property, plant and equipment . . . . 14 (770) (1,453) Proceeds of sale of property, plant and equipment . . . 82 98) Interest received . . . . . . . 3 145) Investment in subsidiary . . . . . . - (575) Loan (to)/repaid from Joint Venture . . . . . 34 (2,155) 3,010 Return of capital contribution to Joint Ventures . . . 16 (a) - 1,040 Dividend received from subsidiaries and Joint Ventures . . 2,500 2,311 NET CASH (OUTFLOW)/INFLOW FROM INVESTING ACTIVITIES . . . (340) 4,576 CASH FLOWS FROM FINANCING ACTIVITIES Purchase of own shares . . . . . . . 27 (656) (902) Dividends paid . . . . . . . . 11 (1,264) (1,277) NET CASH OUTFLOW FROM FINANCING ACTIVITIES . . . (1,920) (2,179) (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS . . 29 (b) (5,746) 5,087 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR . . 29 (a) (4,235) (9,322) CASH AND CASH EQUIVALENTS AT END OF YEAR . . . 29 (a) (9,981) (4,235) 86197 J Smart Annual Report Text.indd 10186197 J Smart Annual Report Text.indd 101 15/12/2025 14:2515/12/2025 14:25 102 103 1. ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES GENERAL INFORMATION J. Smart & Co. (Contractors) PLC which is the ultimate Parent Company of the J. Smart & Co. (Contractors) PLC Group is a public limited company registered in Scotland, incorporated in the United Kingdom and listed on the London Stock Exchange. STATEMENT OF COMPLIANCE The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) Interpretations in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and in accordance with UK adopted international accounting standards. STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS EFFECTIVE IN THE YEAR TO 31st JULY 2025 The following new standards and amendments to standards and interpretations relevant to the Group have been issued by the International Accounting Standards Board and are mandatory for the first time for the financial year to 31st July 2025: • IAS 1 (amended): Presentation of Financial Statements The above standard has had no significant impact on the Company’s financial statements other than regarding disclosures to be made in the financial statements. NEW STANDARDS, AMENDMENTS TO STANDARDS AND INTERPRETATIONS NOT YET APPLIED There have been no new standards, amendments to standards and interpretations relevant to the Company that have been issued by the International Accounting Standards Board but are not yet effective for the Company at the date of these financial statements. IFRS 18: Presentation and Disclosures in Financial Statements is replacing IAS 1: Presentation of Financial Statements and will be effective for the Company as from the accounting year ending 31st July 2028. This standard will result in significant changes to the presentation of the Income Statement and the reporting of financial performance. The impact of this Standard is still being assessed and it is not yet practical to quantify the effect it will have on the financial statements. The Directors do not consider that the application of these standards and amendments to standards will have a material impact on the financial statements other than regarding disclosures to be made in the financial statements. BASIS OF PREPARATION The financial statements have been prepared under the historical cost convention except where the measurement of balances at fair value is required as noted below for investment properties, financial assets and assets held by the defined benefit pension scheme. The accounting policies set out below have been consistently applied to all periods presented in these financial statements. The preparation of financial statements requires management to make estimates and assumptions concerning the future that may affect the application of accounting policies and the reported amounts of assets and liabilities and income and expenses. Management believes that the estimates and assumptions used in the preparation of these financial statements are reasonable. However, actual outcomes may differ from those anticipated. J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS 31st JULY 2025 86197 J Smart Annual Report Text.indd 10286197 J Smart Annual Report Text.indd 102 15/12/2025 14:2515/12/2025 14:25 102 103 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 1. ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued) GOING CONCERN The financial statements have been prepared on a going concern basis. The Directors have prepared a number of cashflows scenarios taking account of trading activities around construction projects in hand and anticipated projects, land acquisitions, rental income, investment property acquisitions and disposals and other capital expenditure. In each scenario reviewed by the Directors the Group remains cash positive with no reliance on external funding and therefore remains net debt free. The net assets of the Group are £130,603,000 at 31st July 2025 and the Group’s net current assets amount to £30,539,000. The Directors have also taken account of the impact of climate changes on the activities of the Group. Taking all of the information the Directors currently have they are of the opinion that the Company and Group are well placed to manage their financial and business risks and have a reasonable expectation that the Company and Group have adequate financial resources to continue in operational existence for a period of at least twelve months from the date of approval of these financial statements and therefore consider the adoption of the going concern basis as appropriate for the preparation of these financial statements. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS ACCOUNTING ESTIMATES INVESTMENT PROPERTIES Investment properties are revalued annually by the Directors in accordance with the RICS Valuation Standards. The valuations are subjective due to, among other factors, the individual nature of the property, its location and the expected future rental income. As a result, the valuation of the Group’s investment property portfolio incorporated into the financial statements is subject to a degree of uncertainty and is made on the basis of assumptions which may prove to be inaccurate, particularly in periods of volatility or low transaction flow in the property market. The Directors have requested a third party external valuer to value the Group’s investment property portfolio. The valuations prepared by the Directors and the external valuers are compared to ensure that there are no material variations between the valuations. The assumptions used by the Directors are market standard assumptions in accordance with the RICS Valuation Standards and include matters such as tenure and tenancy details, ground conditions of the properties and their structural conditions, prevailing market yields and comparable market conditions. If any of the assumptions used by the Directors prove to be incorrect this could result in the valuation of the Group’s investment property portfolio differing from the valuation incorporated into the financial statements and the difference could have a material effect on the financial statements. RETIREMENT BENEFIT OBLIGATION The valuation of the retirement benefit obligation is dependent upon a series of assumptions, mainly discount rates, mortality rates, investment returns, salary inflation and the rate of pension increases, which are determined after taking expert advice from the Group’s Actuary. If different assumptions were used then this could materially affect the results disclosed in the financial statements. These are set out in note 31 to the financial statements. ACCOUNTING JUDGEMENTS CASH AND CASH EQUIVALENTS As the Group has a pooling arrangement with its bankers and the bank has been granted guarantees and letters of offset by certain members of the Group in favour of the bank on account of all these members as continuing security for all monies, obligations and liabilities owing or incurred to the bank, then for the purposes of the Statement of Cash Flows and the calculation of cash and cash equivalents the bank overdraft is netted against positive bank balances. The Directors consider the bank balances whether positive or negative to be part of the Group’s ordinary working capital cycle. In accordance with IAS 7: Statement of Cash Flows, the Directors deem the bank overdraft to be cash and cash equivalents and not borrowings as this balance is being used for working capital and other trading activities. Overall the Group is not allowed to be in an overdrawn bank position in the pooling arrangement, however individual companies within the arrangement may have an overdrawn bank balance. 86197 J Smart Annual Report Text.indd 10386197 J Smart Annual Report Text.indd 103 15/12/2025 14:2515/12/2025 14:25 104 105 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 1. ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued) ACCOUNTING JUDGEMENTS (CONTINUED) CASH AND CASH EQUIVALENTS (continued) The Group and Company present positive and negative bank balances separately on the face of the Statement of Financial Position and do not offset these balances for presentation purposes. Companies not in the pooling arrangement do not have an overdraft facility and therefore their bank balances cannot be overdrawn. Note 22 of the financial statements details the cash and cash equivalent calculation for the Consolidated and Company Statement of Cash Flows. RECOVERABILITY OF WORK IN PROGRESS AND CASH EQUIVALENTS The Group takes account of all anticipated losses on work in progress contacts at the year end and therefore considers that the value of work in progress included in the financial statements is recoverable. DEFINED BENEFIT RETIREMENT PENSION SCHEME SURPLUS The Group has concluded that the trust deed relating to the defined benefit retirement pension scheme grants the unconditional right to any surplus of the scheme on the full settlement of the scheme liabilities to the Group and therefore has concluded that any surplus on the scheme can be incorporated into the Group and Company financial statements. Advice on the Group’s right to a surplus arising on the pension scheme was sought in the year to 31st July 2022 from a firm of lawyers who specialise in this area. Their advice was that the Group had an unconditional right to the surplus based on the original Trust Deed and Deed of Variation and therefore the full surplus arising on the calculation thereof under IAS 19 (amended): Employee Benefits should be accounted for in the financial statements. BASIS OF CONSOLIDATION The Group financial statements consolidate the financial statements of J. Smart & Co. (Contractors) PLC and all of its Subsidiaries made up to 31st July each year. Subsidiaries are entities controlled by the Company. Control is assumed where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Intra-group balances and any income or expenses arising from intra-group transactions are eliminated in preparing the Group financial statements. No Income Statement is presented for the Parent Company as provided by section 408 of the Companies Act 2006. BUSINESS COMBINATIONS AND GOODWILL Subsidiaries acquired in the year are accounted for using the acquisition method of accounting. Identifiable assets acquired and liabilities assumed are measured at their fair values at the acquisition date. The consideration transferred for the acquisition is the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the acquisition date. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. INVESTMENT IN JOINT VENTURES Joint Ventures are those entities over which the Company exercises joint control under a contractual arrangement. The results of Joint Venture undertakings are accounted for using the equity method of accounting. Under this method the investment is initially recorded at cost and is subsequently adjusted to reflect the Group’s share of the net profit or loss in the Joint Venture. The financial statements of the Group’s Joint Ventures have been prepared in accordance with UK GAAP. The Group’s interest in the assets and liabilities of the Joint Ventures have only been restated in accordance with International Financial Reporting Standards where such restatement is considered material to an understanding of the Group’s interest. 86197 J Smart Annual Report Text.indd 10486197 J Smart Annual Report Text.indd 104 15/12/2025 14:2515/12/2025 14:25 104 105 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 1. ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued) CAPITAL MANAGEMENT Group objectives in managing capital are to safeguard the interests of the Group to operate as a net debt free going concern, of its employees to maintain wherever possible security of employment, remuneration and retirement provisions and of its shareholders to maintain continuity of dividends and stability of share price. The capital structure of the Group consists of issued share capital, reserves and retained earnings represented predominantly by investment properties, working capital and cash. These assets are purchased, managed and maintained by the Group’s management and employees, advised where appropriate by independent outside professionals. Refer to pages 18 to 20 of this report for details of relevant risk factors and management measures. The Group has sufficient cash reserves and readily realisable assets available to meet its foreseeable commitments. INVESTMENT PROPERTIES Investment properties are properties which are either owned or leased by the Group which are held for long term rental income or for capital appreciation or both. Investment properties, whether completed or under development, are initially recognised at cost and revalued at the Statement of Financial Position date to fair value as determined by the Directors in accordance with the RICS Valuation Standards. The Directors also requested a third party external valuer to value the Group’s investment property portfolio. The valuations are compared to ensure no variations outside of acceptable valuation differences. Fair value is based on the market value of properties at the Statement of Financial Position date. Surpluses or deficits from the changes in fair value are included in the Income Statement in the year in which they arise. In accordance with IAS 40: Investment Property, as the Group uses the fair value model, no depreciation is provided in respect of investment properties including integral plant. Additions to investment properties consist of costs of a capital nature and, in the case of properties under construction, includes certain internal staff and associated costs directly attributable to the management of the development of these properties. Properties are treated as acquired when the Group assumes control of the properties. Properties are treated as disposed when control of the property is transferred to the buyer. Profits or losses on disposal are determined as the difference between the sales proceeds and the carrying value amount of the asset at the beginning of the accounting period plus any capital expenditure in the period to the date of disposal. Profits or losses are presented separately in the Income Statement. Some of the Group’s investment properties are built on leasehold land on which the Group pays ground rent. Under IFRS 16: Leases where the rent on the land is not contingent on the rents the Group receives from tenants of the investment properties built on the land then a right-of-use asset is required to be incorporated into the financial statements for the land and an associated lease liability also requires to be incorporated into the financial statements. The lease liability is calculated as the discounted present value of the outstanding rental payments and the right-of- use asset is set as being equal to the liability. As the right-of-use asset relates to investment properties after initial recogition will be included at fair value. PROPERTY, PLANT AND EQUIPMENT Items of property, plant and equipment are stated at cost less accumulated depreciation. Subsequent costs are included in the asset’s carrying value or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of them can be measured reliably. All other repairs and maintenance expenditure is charged to the Income Statement as incurred. 86197 J Smart Annual Report Text.indd 10586197 J Smart Annual Report Text.indd 105 15/12/2025 14:2515/12/2025 14:25 106 107 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 1. ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued) DEPRECIATION Depreciation is provided on all items of property, plant and equipment, other than investment properties and freehold land, at rates calculated to write off the cost less residual value of each asset over its expected useful life, as follows: Freehold buildings - 40 to 66 years Plant and machinery - 3 to 4 years Office furniture and fittings - 3 to 5 years Motor vehicles - 3 years IMPAIRMENT REVIEWS PROPERTY, PLANT AND EQUIPMENT Individual assets are grouped into cash generating units for impairment assessment purposes at the lowest level at which there are identifiable cash inflows independent of the cash inflows of other groups of assets. The Group assesses at each Statement of Financial Position date whether there is an indication that an asset may be impaired. If an indication exists the Group makes an estimate of the recoverable amount of each asset group, being the higher of its fair value less costs to sell and its value in use as is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. An impairment loss is recognised where the recoverable amount is lower than the carrying value of assets. If there is an indication that previously recognised impairment losses may have decreased or no longer exist, a reversal of the loss may be made. The carrying amount of the asset is increased to its recoverable amount only up to the carrying amount that would have resulted, net of depreciation, had no impairment loss been recognised for the asset in prior years. Impairment losses and any subsequent reversals are recognised in the Income Statement. INVENTORIES AND WORK IN PROGRESS Inventories are valued at the lower of cost and net realisable value. Where necessary, provision is made to reduce cost to no more than net realisable value after having regard to the nature, condition, and sales value of inventory. Land held for development is included at the lower of cost and net realisable value. Work in progress is valued at the lower of cost and net realisable value. Cost includes materials, on a first-in first-out basis and direct labour plus attributable overheads based on normal operating activity, where applicable. Net realisable value is the estimated selling price less anticipated disposal costs. LONG-TERM CONTRACTS Amounts due from customers for construction contracts which have not yet been invoiced are disclosed as Contract Assets and are stated at cost as defined above, plus attributable profit to the extent that this is reasonably certain after making provision for maintenance costs, less any losses incurred or foreseen in bringing contracts to completion, and less amounts received as progress payments. For any contracts where receipts exceed the book value of work done, the excess is included in trade and other payables as payments on account. INCOME TAX The charge for current UK corporation tax is based on results for the year as adjusted for items that are non- assessable or disallowed and any adjustments for tax payable in respect of previous years. It is calculated using rates that have been enacted or substantively enacted at the Statement of Financial Position date. 86197 J Smart Annual Report Text.indd 10686197 J Smart Annual Report Text.indd 106 15/12/2025 14:2515/12/2025 14:25 106 107 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 1. ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued) DEFERRED TAXATION Deferred tax is provided using the liability method in respect of temporary differences between the carrying value of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax is provided on all temporary differences. The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amounts of its assets and liabilities for Investment Properties that are measured at fair value. Deferred tax is determined using tax rates that have been enacted or substantively enacted by the Statement of Financial Position date and are expected to apply when the deferred tax asset is realised or the deferred tax liability is settled. It is recognised in the Consolidated Income Statement except when it relates to items credited or charged directly to Equity, in which case the deferred tax is also dealt with in Equity. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. PENSIONS The Group operates a defined benefit pension scheme, which was closed to new members during the year to 31st July 2003 and which requires contributions to be made to an administered fund. The obligations of the scheme represent benefits accruing to employees and are measured at discounted present value while scheme assets are measured at their fair value. The discount rate used is the yield on AA credit rated corporate bonds that have maturity dates approximating to the terms of the Group’s obligations. The calculation is performed by a qualified actuary using the projected unit credit method. The operating and financial costs of such plans are recognised separately in the Income Statement, service costs are spread systematically over the working lives of the employees concerned and financing costs are recognised in the year in which they arise. Actuarial gains and losses are recognised immediately in the Statement of Comprehensive Income. The Directors have concluded that the trust deed relating to the defined benefit scheme grants the unconditional right to any surplus of the scheme on the full settlement of the scheme liabilities to the Group and therefore have concluded that any surplus on the scheme can be incorporated into the Group and Company financial statements. The Group also operates a defined contribution Group Personal Pension Plan for eligible employees. The plan is externally administered and professionally managed. Contributions payable are expensed to the Income Statement as incurred. LEASES Leases are classified according to the substance of the transaction. A lease that transfers substantially all the risks and rewards of ownership to the lessee is classified as a finance lease. All other leases are classified as operating leases. GROUP AS A LESSEE In accordance with IAS 40: Investment Property, leases of investment property are assessed on a property by property basis. For ground leases where payments to the lessors are not contingent on rents received by the Group from tenants then a right-of-use asset has to be recognised and a corresponding lease liability has also to be recognised. On initial recognition the liability is calculated as the discounted present value of the outstanding rental payments. The lease payments are allocated between the liability and finance charges which are recognised in Finance Costs in the Income Statement. Both lease payments and finance charges are disclosed in the Statement of Cash Flows under Financing Activities. For ground leases where payments to the lessors are contingent on rents received by the Group from tenants the Group recognises the lease payments as ground rent payable and are charged to the Income Statement as incurred and included in Statement of Cash Flows under Operating Activities. 86197 J Smart Annual Report Text.indd 10786197 J Smart Annual Report Text.indd 107 15/12/2025 14:2515/12/2025 14:25 108 109 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 1. ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued) LEASES (CONTINUED) GROUP AS A LESSOR Properties leased out under operating leases are included in investment property, with rental income recognised on a straight line basis over the lease term and disclosed in the Statement of Cash Flows under Operating Activities. REVENUE CONSTRUCTION ACTIVITIES IFRS 15: Revenue from Contracts with Customers establishes a five step model to determine the amount and timing of revenue recognition. Revenue is recognised by the Group from long and short term construction contracts and sale of private residential housing. Revenue from long term construction contracts is based on the stage of completion of the contract at the Statement of Financial Position date. The stage of completion is based on valuations agreed with third party surveyors. Invoices are raised to customers based on these agreed valuations. The Group uses the output method to recognise revenue from construction contracts as it is recognised over time as the work progresses. When it is probable that the total costs of construction will exceed the total contract revenue, the expected loss is recognised immediately in the Consolidated Income Statement. When it is probable that total revenue will exceed the total costs of construction the anticipated profit will only be accounted for when the profit is reasonably certain. This policy requires judgement to be made on the anticipated costs to complete and the Group has in place procedures to ensure that the evaluation of the total costs of the contract and its revenues is based on reliable estimates. Construction contracts consist of the structure being built and all associated external and internal services. Contracts for construction are typically accounted for as one performance obligation although there may be a number of related components but when taken together result in one performance obligation delivered to the customer. Modification to contracts are assessed on a case by case basis but are generally modifications of the existing performance obligation and are therefore accounted for under the existing obligation. In some cases land held by the Group is sold to third parties and then a build contract is obtain for construction work on the land, the sale of land is a separate obligation from the construction contract and recognised at the point in time the land is sold. The value of construction work undertaken by the Group for its investment properties is excluded from revenue. Revenue from sale of private residential housing is recognised at the point in time when there is legal completion of the sale and the transfer of title. Revenue is recognised at the fair value of the consideration received. The Group has no obligations for returns or warranties. INVESTMENT PROPERTY ACTIVITIES Rental revenue from investment properties leased out under an operating lease is recognised in the Consolidated Income Statement on a straight line basis over the term of the lease. Rental revenue is generally charged quarterly in advance. Revenue for service charges and insurance receivable for the year in relation to the Group’s investment properties are based on annual invoices raised in advance to tenants. All revenue is stated net of Value Added Tax. All invoices raised are due for payment no later than 30 days from date of invoice. 86197 J Smart Annual Report Text.indd 10886197 J Smart Annual Report Text.indd 108 15/12/2025 14:2515/12/2025 14:25 108 109 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 1. ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued) FINANCE INCOME AND COSTS Finance income arising from short term deposits is accounted for on a received basis. Finance costs relating to leases are accounted for on a straight line basis. Finance income or costs relating to retirement benefit obligations are accounted for in accordance with the requirements of IAS 19 (amended): Employee Benefits. DIVIDEND INCOME Dividend income from financial assets is accounted for on a received basis. FINANCIAL INSTRUMENTS Financial assets and financial liabilities are recognised in the Group’s Statement of Financial Position when the Group becomes a party to the contractual provision of the instrument. The principal treasury objective is to provide sufficient liquidity to meet operational cash requirements. The Group operates controlled treasury policies which are monitored by the Board to ensure that the needs of the Group are met as they arise. FINANCIAL ASSETS Financial assets represent investments in quoted shares which are recognised at fair value at the year end. The movement in fair value is accounted for in the Consolidated Income Statement. TRADE AND OTHER RECEIVABLES Trade and other receivables are recognised at invoiced value less provisions for impairment of lifetime expected credit losses. Cash flow movements relating to loans to Joint Ventures are disclosed under Investing Activities whereas all other items of trade and other receivables are disclosed under Operating Activities in the Statement of Cash Flows. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash in hand, deposits with banks and other short-term highly liquid investments with original maturities of three months or less. For the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. MONIES HELD ON DEPOSIT Monies held on deposit with original maturity dates exceeding three months are disclosed separately in the Statement of Financial Position. As these monies originated from investing activities any movements in the year on these monies are disclosed under Investing Activities in the Statement of Cash Flows. TRADE AND OTHER PAYABLES Trade and other payables are non-interest bearing and are recognised at invoiced amount. Cash flow movements in trade and other payables are disclosed under Operating Activities in the Statement of Cash Flows. 86197 J Smart Annual Report Text.indd 10986197 J Smart Annual Report Text.indd 109 15/12/2025 14:2515/12/2025 14:25 110 111 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 1. ACCOUNTING POLICIES AND ESTIMATION TECHNIQUES (continued) MEASUREMENT OF FAIR VALUES A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: • Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). • Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which a change has occurred. Further information about the assumptions made in measuring fair values is included in the following notes: • Note 15 – Investment Properties; • Note 17 – Financial Assets; • Note 24 – Financial Instruments; • Note 31 – Retirement Benefit Obligations – Assets held within the Defined Benefit pension scheme. DIVIDENDS Final Dividends are recognised as a liability in the year in which they are approved by the Company’s shareholders. Interim Dividends are recognised when they are paid. Dividends paid in the year are included in the Statement of Cash Flows under Financing Activities. 86197 J Smart Annual Report Text.indd 11086197 J Smart Annual Report Text.indd 110 15/12/2025 14:2515/12/2025 14:25 110 111 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 2. SEGMENTAL INFORMATION IFRS 8: Operating Segments requires operating segments to be identified on the basis of internal reporting about components of the Group that are regularly reviewed by the chief operating decision maker to allow the allocation of resources to the segments and to assess their performance. The chief operating decision maker has been identified as the Board of Directors. The chief operating decision maker has identified two distinct areas of activities in the Group being construction activities and investment property activities. All revenue from construction and investment property income arises from activities within the UK and therefore the Board of Directors does not consider the business from a geographical perspective. The operating segments are based on activity and performance of an operating segment is based on a measure of operating results. Operating Revenue Profit / (Loss) 2025 2024 2025 2024 £000 £000 £000 £000 ) Construction activities 16,354 14,350) (3,097) (3,968) Investment property activities 6,886 7,670) 8,345 4,634 23,240 22,020) 5,248 666 Share of results of Joint Ventures . . . . . . . 48 320 Finance and investment income . . . . . . . 1,590 1,518 Finance and investment costs . . . . . . . (18) (139) PROFIT ON ORDINARY ACTIVITIES BEFORE TAX . . . . . 6,868) 2,365 The Group had sales from construction activities from one customer amounting to £1,945,000 (2024, sales from construction activities from two customers amounting to £4,269,000 and £1,671,000 respectively). OTHER SEGMENTAL INFORMATION Non-Current Assets Segment Segment Additions Depreciation Assets Liabilities 2025 £000 £000 £000 £000 Construction activities . . . . . . 897) 544 )52,451) 20,646) Investment properties activities . . . . 3,547) 46 106,588) 7,903) Joint Ventures . . . . . .) . -) -) 113) -) 159,152) 28,549) Allocation of corporation tax creditor . . . . . . (817) (817) 158,335) 27,732) 2024 Construction activities . . . . . . 1,554) 409 )49,959) 14,898) Investment properties activities . . . . 1,854) 46 97,562) 6,375) Joint Ventures . . . . . .) . –) -) 65) -) 147,586) 21,273) Allocation of corporation tax creditor . . . . . . (1,088) (1,088) 146,498) 20,185) . . . . . . . . . 86197 J Smart Annual Report Text.indd 11186197 J Smart Annual Report Text.indd 111 15/12/2025 14:2515/12/2025 14:25 112 113 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 3. REVENUE The Group derives its revenue from contracts with customers for the transfer of goods over time in relation to construction contracts and also at point in time in relation to housing sales. This is consistent with the revenue information that is disclosed for Construction Activities segment under IFRS 8: Operating Segments. Construction contracts are generally for social housing or industrial and commercial properties. The Group provides a complete service including architectural and surveyor services from the pre-contract design through to completion. Disaggregation of Revenue 2 0 2 5 ) 2024) Construction activities £ 0 0 0 ) £000 Social housing . . . . . . . . . 1,945) 1,617) Civil engineering . . . . . . . . . 3,482) 4,646) Industrial . . . . . . . . . . 60) 2,079) Commercial . . . . . . . . . 2,081) 2,232) General construction . . . . . . . . . 35) 59) Private house sales . . . . . . . . . 8,751) 3,717) 16,354) 14,350) Investment properties activities Rental income . . . . . . . . . 5,958) 6,366) Service charges and insurance receivable . . . . . . 913) 1,299) Sundry income . . . . . . . . . . 15) 5) 6,886) 7,670) Total Revenue 23,240) 22,020) The transaction price allocated to unsatisfied performance obligations in respect of construction activities at 31st July 2025 are as set out below. Social housing . . . . . . . . . . 1,102) 2,509) Civil engineering . . . . . . . . . 359) 604) Industrial . . . . . . . . . . -) 59) Commercial . . . . . . . . . . -) 734) The Directors expect that 100% (2024, 91%) of the transaction price allocated to the unsatisfied contracts as at 31st July 2025 will be recognised as revenue in the year to 31st July 2026. The Group does not include in Revenue the value of work done in the year which relates to own work capitalised on the Group’s Investment Properties, in the year to 31st July 2025 amounting to £3,364,000 (2024, £1,765,000). 86197 J Smart Annual Report Text.indd 11286197 J Smart Annual Report Text.indd 112 15/12/2025 14:2515/12/2025 14:25 112 113 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 4. OTHER OPERATING INCOME 2025) 2024) £ 0 0 0 ) £000 Profit on disposal of property, plant and equipment . . . . . 83) 114) Other income . . . . . . . . . -) 49 ) 83) 163) 5. STAFF COSTS AND DIRECTORS’ REMUNERATION 2018) 2017) Group Company 2025 2024 2025) 2024) £000 £000 £000) £000) Staff costs during the year amounted to: Wages, salaries and short term benefits . . 7,354 6,385 5,438) 4,543) Social security costs . . . . . 901 756 679) 560) Post-employment benefits . . . . 698 707 537) 505 ) 8,953 7,848 6,654) 5,608) The average monthly number of employees during the year was made up as follows: No. No. No.) No.) Construction and related services . .. . 119 118 80) 77) Office and management . . . . 23 22 18) 16 ) 142 140 , 98) 93) Group and Company 2025) 2024) Directors’ remuneration: £000) £000) Salaries and short term benefits . . . . . . . . 633) 572) Social security costs . . . . . . . . . 86) 74) Post-employment benefits . . . . . . . . . 131) 126) 850) 772) David W Smart, Alasdair H Ross and Jane Oliver are members of the Group’s defined benefit pension scheme. John R Smart and Patricia Sweeney are members of the Group’s defined contribution Group Personal Pension Plan. Key management is comprised solely of the Directors of the Company. Full details of Directors’ remuneration is given in the Directors’ Remuneration Report on pages 72 to 77. 86197 J Smart Annual Report Text.indd 11386197 J Smart Annual Report Text.indd 113 15/12/2025 14:2515/12/2025 14:25 114 115 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 6. OPERATING PROFIT 2025) 2024) This is stated after charging: £000) £000) Staff costs (note 5) . . . . . . . . . . 8,953) 7,848) Hire of plant and machinery . . . . . . . . . 414) 646) Ground rents . . . . . . . . . . . 92) 87) Depreciation of owned assets . . . . . . 590) 455) Auditor’s remuneration Audit of these financial statements . . . . . . . . 80) 69) Amounts receivable by the auditor in respect of: Audit of the financial statements of subsidiaries pursant to legislation . . 98) 94 Audit of the financial statements of Joint Venture companies . . . 13) 6 Amounts paid to the Company’s Auditor in respect of services to the Company, other than the audit of the Company’s financial statements has not been disclosed as the information is required instead to be disclosed on a consolidated basis. Direct property costs relating to Investment Properties amounted to £3,697,000 (2024, £3,677,000) of which £1,428,000 (2024, £1,406,000) related to Investment Properties that did not generate rental income in the year. 7. INCOME FROM FINANCIAL ASSETS ) Dividend income from financial assets . . . . . . 43) 49 8. FINANCE INCOME AND COSTS ) Income: Interest on short term deposits . . . . . . 191) 209) Other interest received . . . . . . 13) 51) Net interest income on retirement benefit asset . . . 1,157) 1,086) 1,361) 1,346) Costs: Bank interest . . . . . . . . -) 3) Other interest . . . . . . . . -) 1) Interest on leases . . . . . . . 12) 12) 12) 16) Group 86197 J Smart Annual Report Text.indd 11486197 J Smart Annual Report Text.indd 114 15/12/2025 14:2515/12/2025 14:25 114 115 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 9. TAXATION 2025) 2024) £000) £000) UK Corporation Tax Current tax on income for the year . . . . . . . - 225) Corporation tax under provided in previous years . . . . . - (28) ) - 197) Deferred taxation (note 25) . . . . . . . . 1,756 495 1,756 692 Current Tax Reconciliation Profit on ordinary activities before tax . . . . . . 6,868 2,365) Share of profit of Joint Ventures . . . . . . (48) (320) 6,820) 2,045) Current tax at 25.00% (2024, 25.00%) . . . . . . 1,705) 511) Effects of: Expenses not deductible for tax purposes . . . . . . 144) 440) Non taxable income including revaluation surplus . . . . . (55) (621) Chargeable gains . . . . . . . . . - 380) Adjustments to corporation tax charge in respect of prior years . . . - (28) Adjustments to deferred tax charge in respect of prior years . . . - 5 Deferred tax not recognised . . . . . . . . (38) 5 1,756 692 The Finance (No 2) Act 2024, which received Royal assent on 24th May 2024, states that the corporation tax rate for the financial year commencing 1st April 2024 is 25% and The Finance Act 2025, which received Royal assent on 20th March 2025, states that the corporation tax rate for the financial year commencing 1st April 2025 is 25%. Deferred tax provisions have been calculated using the 25% rate. In addition to amounts charged to the Consolidated Income Statement, a deferred tax charge of £366,000 (2024, £450,000) relating to actuarial gains on the defined benefit pension scheme has been recognised in the Consolidated Statement of Comprehensive Income. There are no income tax consequences attached to dividends paid or proposed by the Company to its shareholders. Group 86197 J Smart Annual Report Text.indd 11586197 J Smart Annual Report Text.indd 115 15/12/2025 14:2515/12/2025 14:25 116 117 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 10. PROFIT BEFORE TAX FOR THE FINANCIAL YEAR ) The Group uses underlying profit before tax as an alternative performance measure, which is the profit before tax excluding net surplus or deficit on valuation of investment properties and financial assets accounted for through the Income Statement. As the net surplus or deficit on valuation of investment properties and financial assets can fluctuate from year to year and is not a realised surplus or deficit by excluding this amount, the Directors consider that a truer reflection of actual Group performance is obtained. Analysis of this alternative performance measure is as follows: 2025) 2024) £000) £000) Profit before tax . . . . . . . . 6,868) (2,365) Surplus on valuation of investment properties . . . . (5,816) ((994) Surplus on valuation of financial assets . . . . . (186) (123) 866) 1,248) 11. DIVIDENDS ) 2023 Final Dividend of 2.27p per share, . . . . . . -) 898) 2024 Interim Dividend of 0.96p per share . . . . . . -) 379) 2024 Final Dividend of 2.27p per share . . . . . . 889) -) 2025 Interim Dividend of 0.96p per share . . . . . . 375) -) 1,264) 1,277) The Board is proposing a Final Dividend of 2.29p per share (2024, 2.27p) which will cost the Company no more than £890,000. The proposed Final Dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. 12. EARNINGS PER SHARE ) Profit attributable to Equity shareholders £000 . . . . . 5,112) 1,673) Basic Earnings per share . . . . . . . . 13.07 p 4.22p Basic earnings per share are calculated by dividing the profit attributable to equity shareholders by the weighted average number of shares in issue during the year. The weighted average number of shares for the year to 31st July 2025 amounted to 39,111,000 (2024, 39,608,000). There is no difference between basic and diluted earnings per share. 86197 J Smart Annual Report Text.indd 11686197 J Smart Annual Report Text.indd 116 15/12/2025 14:2515/12/2025 14:25 116 117 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 13. PROPERTY, PLANT AND EQUIPMENT - GROUP Land and Plant,) buildings equipment) Freehold and vehicles) Total) Cost: £000 £000) £000) At 1st August 2024 2,150 4,760 6,910 Additions 31 866 897 Disposals - (415) (415) At 31st July 2025 2,181 5,211 7,392 Depreciation: At 1st August 2024 262 3,905 4,167 Provided during year 91 499 590 Disposals - (391) (391) At 31st July 2025 353 4,013 4,366 Net book value: At 31st July 2025 1,828 1,198 3,026 At 31st July 2024 1,888 855 2,743 ) Included within Freehold Land and Buildings is land costing £4,000 (2024, £4,000) which is not depreciated. Cost: At 1st August 2023 1,204 5,186 6,390 Additions 1,377 177 1,554 Transfer to Investment Properties (431) - (431) Disposals - (603) (603) At 31st July 2024 2,150 4,760 6,910 Depreciation: At 1st August 2023 595 4,125 4,720 Provided during year 90 365 455 Transfer to Investment Properties (423) - (423) Disposals - (585) (585) At 31st July 2024 262 3,905 4,167 Net book value: At 31st July 2024 1,888 855 2,743 At 31st July 2023 609 1,061 1,670 ) Included within Freehold Land and Buildings is land costing £4,000 (2023, £13,000) which is not depreciated. 86197 J Smart Annual Report Text.indd 11786197 J Smart Annual Report Text.indd 117 15/12/2025 14:2515/12/2025 14:25 118 119 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 14. PROPERTY, PLANT AND EQUIPMENT - COMPANY Land and) Plant,) buildings) equipment) Freehold) and vehicles) Total) Cost: £ 0 0 0 ) £000) £000) At 1st August 2024 2,046 2,465 4,511 Additions 31 739 770 Disposals - (339) (339) At 31st July 2025 2,077 2,865 4,942 Depreciation: At 1st August 2024 155 2,089 2,244 Provided during year 91 299 390 Disposals - (320) (320) At 31st July 2025 246 2,068 2,314 Net book value: At 31st July 2025 1,831 797 2,628 At 31st July 2024 1,891 376 2,267 ) Cost: At 1st August 2023 669 2,923 3,592 Additions 1,377 76 1,453 Disposals - (534) (534) At 31st July 2024 2,046 2,465 4,511 Depreciation: At 1st August 2023 65 2,439 2,504 Provided during year 90 165 255 Disposals - (515) (515) At 31st July 2024 155 2,089 2,244 Net book value: At 31st July 2024 1,891 376 2,267 At 31st July 2023 604 484 1,088 86197 J Smart Annual Report Text.indd 11886197 J Smart Annual Report Text.indd 118 15/12/2025 14:2515/12/2025 14:25 118 119 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 15. INVESTMENT PROPERTIES Land and) Land and) buildings) buildings Right-of-use) Freehold) Leasehold Asset) Total £000) £000 £000 £000) Cost or valuation: At 1st August 2024 . . . . . 60,426) 9,399) 69, 2132 70,038) Additions . . . . . . 3,547 -) - 3,547) Surplus on valuation . . . . 4,466 1,350 -) 5,816 At 31st July 2025 . . . . . 68,439) 10,749) 213) 79,401) Cost or valuation: At 1st August 2023 . . . . . 71,991) 9,185) 213 81,389 Additions . . . . . . 1,846) -) - 1,846 Transfer from Property, Plant and Equipment . 8 -) - 8 Transfer to Assets Held for Sale . . . (14,199)) -) - (14,199) Surplus on valuation . . . . . 780 214 -) 994 At 31st July 2024 . . . . . 60,426) 9,399) 213) 70,038) Right-of-use Asset relates to a ground lease on which the Group has built investment properties. The rent paid by the Group to the Lessor for the ground is a set annual rent and is not contingent on rents received by the Group from tenants and therefore the lease falls within the definition of IFRS 16: Leases. Valuation Process The Group’s investment properties are valued by David W Smart, MRICS, who is a Director of the Parent Company, on the basis of fair value, in accordance with the RICS Valuation – Global Standards 2017, incorporating the International Valuations Standards, and RICS Professional Standards UK January 2014 (revised April 2015). The Directors also requested a third party external valuer to value the Group’s investment property portfolio. The valuations prepared by the Director and the external valuers are compared to ensure that there are no variations outside of acceptable valuation differences. Investment properties, excluding ongoing developments, are valued using the investment method of valuation. This approach involves applying capitalisation yields to current and estimated future rental streams and then allowing for voids arising from vacancies and rent free periods and associated running costs. The capitalisation yields and rental values are based on comparable property and leasing transactions in the market, using the valuers’ professional judgment and market observations. Other factors taken into account in the valuations include the tenure of the property, tenancy details and ground and structural conditions. In the case of ongoing developments, the approach applied is the residual method of valuation, which is the same as the investment method, as described above, with a deduction for all costs necessary to complete the development, together with a further allowance for remaining risk. In accordance with IAS 40: Investment Property, net annual surpluses or deficits are taken to the Income Statement and no depreciation is provided in respect of these properties. 86197 J Smart Annual Report Text.indd 11986197 J Smart Annual Report Text.indd 119 15/12/2025 14:2515/12/2025 14:25 120 121 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 15. INVESTMENT PROPERTIES (continued) The Group considers all of its investment properties fall within ‘Level 3’ of the fair value hierarchy as described by IFRS 13: Fair Value Measurement. Level 3 valuations are those using inputs for the asset or liability that are not based on observable market data. The main unobservable inputs relate to estimated rental value and equivalent yield. There have been no transfers of properties in the fair value hierarchy in the financial year. The table below summarises the key unobservable inputs used in the valuation of the Group’s Freehold and Leasehold investment properties: Estimated Rental Value Equivalent Yield £ per sq ft % £000 Low Average High Low Average High Fair Value at 31st July 2025 Investment Commercial 21,080 11.00 17.50 24.00 8.27 10.35 13.50 Industrial 58,108 4.75 8.87 13.00 7.00 8.98 10.09 Fair Value at 31st July 2024 Investment Commercial 21,136 11.00 16.70 22.40 8.50 10.19 13.39 Industrial 48,689 4.75 7.82 10.89 6.55 9.07 10.97 The following table illustrates the impact of changes in the key unobservable inputs (in isolation) on the fair value of the Group’s Freehold and Leasehold investment properties: 5% change in estimated 25bps change in equivalent rental value yield Increase Decrease Decrease Increase £000 £000 £000 £000 £000 Fair Value at 31st July 2025 Investment Commercial 21,080 1,133 (1,133) 609 (578) Industrial 58,108 2,857 (2,857) 1,974 (1,847) Fair Value at 31st July 2024 Investment Commercial 21,136 1,130 (1,130) 609 (578) Industrial 48,689 2,516 (2,516) 1,665 (1,619) The Group had obligations of £nil (2024, £nil) in respect of future developments and repair costs of investment properties at the Statement of Financial Position date. 16. INVESTMENTS Group Company 2025 2024 2025) 2024) £000 £000 £000) £000) Shares in Subsidiaries at Cost . . . . - - 615) 615) Joint Ventures . . . . . . 113 65 -) - ) 113 65 615) 615 ) 86197 J Smart Annual Report Text.indd 12086197 J Smart Annual Report Text.indd 120 15/12/2025 14:2515/12/2025 14:25 120 121 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 16. INVESTMENTS (continued) (a) JOINT VENTURES Group 2025 2024 £000 £000 As at 1st August 2024 . . . . . . . . 65 1,496 Repayment of capital contribution in Joint Venture . . . . - (1,040) Group’s share of profit and total comprehensive income . . . . . . . . 48 320 Dividend received in year . . . . . . . . - (711) As at 31st July 2025 . . . . . . . . 113 65 Of the two joint venture companies the company is involved with the Directors considered that only St Andrews 1413 Limited to be a material joint venture as at 31st July 2025. The following table summarises the financial information as included in the financial statements of St Andrews 1413 Limited adjusted for differences in accounting policies. The comparative figures related to Gartcosh Estates LLP which the Directors considered was a material joint venture as at 31st July 2024. 2025 2024 1 £000 £000) Non-Current assets . . . . . . . . . 4,990 -) Current assets . . . . . . . . . . 172 270) Of which are cash and cash equivalents . . . . . . . 130) 123) Non-Current liabilities . . . . . . . . . (4,351) - Of which are financial liabilities excluding trade and other payables and provisions . . (4,310) - Current liabilities . . . . . . . . . (707) (140) Of which are financial liabilities excluding trade and other payables and provisions . . -) -) Net assets . . . . . . . . . . 104 130) Group’s interest in net assets . . . . . . . . 52 65) Revenue . . . . . . . . . . -) -) Other Operating Income . . . . . . . . - 8) Profit and total comprehensive income . . . . . . 104 640 Group’s share of profit and total comprehensive income . . . . 52 320 The Group accounts for all Joint Ventures using the equity method of accounting. 86197 J Smart Annual Report Text.indd 12186197 J Smart Annual Report Text.indd 121 15/12/2025 14:2515/12/2025 14:25 122 123 16. INVESTMENTS (continued) (a) JOINT VENTURES (continued) The Group’s interests in its other Joint Venture company at 31st July 2025 not considered to be material is as follows: 2025) 2024) £000) £000) Aggregate carrying amount of individually immaterial joint ventures 61 -) Aggregate carrying amount of the Group’s share of: Loss after tax and total comprehensive loss (4) -) Registered in and Principal Country J. Smart & Co. (Contractors) PLC Name of Joint Venture of Operation Interest in Joint Venture Gartcosh Estates LLP Scotland 50% St Andrews 1413 Limited Scotland 50% Name of Joint Venture Jointly managed with Issued Share capital Gartcosh Estates LLP Fusion Assets Limited Partnership Interest S t A n d r e w s 1 4 1 3 L i m i t e d K n o w e P r o p e r t i e s L i m i t e d 1 , 0 0 0 o r d i n a r y 1 p s h a r e s split equally and ranking equally in all respects res The Joint Venture companies were established for the purposes of property development and letting and have accounting years ending on 31st July. (b) SUBSIDIARIES 2 0 2 5 ) 2024) £ 0 0 0 ) £000) At 1st August 2024 and 31st July 2025 . . . . . . 615) 615) As at 1st August 2024 . . . . . . . . . 615) 708) Capital contribution to subsidiary . . . . . . . - 575) Write off of cost of investment in subsidiary . . . . . . - (668) As at 31st July 2025 . . . . . . . . . 615) 615) In the year to 31st July 2024 the Company advanced £575,000 to its subsidiary Concrete Products (Kirkcaldy) Limited to enable that company to clear its outstanding bank overdraft and subsequently close its bank account in that financial year in anticipation of the eventual dissolution of this subsidiary company. This advance has been treated as a capital contribution to the subsidiary. J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 Company Issued shares held by J. Smart & Co. (Contractors) PLC 500 ordinary 1p shares 86197 J Smart Annual Report Text.indd 12286197 J Smart Annual Report Text.indd 122 15/12/2025 14:2515/12/2025 14:25 122 123 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 16. INVESTMENTS (continued) (b) SUBSIDIARIES (continued) At 31st July 2025 the Company held the entire issued share capital of the following companies, with the exception of Smart (Manse 1) Limited where the Company holds 75% of the issued share capital. All companies are registered in and operate in Scotland: Company Name Nature of business McGowan and Company (Contractors) Limited Plumbing contractors Cramond Real Estate Company Limited Investment holding Thomas Menzies (Builders) Limited Civil engineering contractors Concrete Products (Kirkcaldy) Limited Non trading C. & W. Assets Limited Investment property company Smart Serviced Offices Limited Serviced office and co-working space provider Northrigg Limited Investment property company Smart (Manse 1) Limited Dormant 17. FINANCIAL ASSETS Group 2 0 2 5 ) 2024) £ 0 0 0 ) £000) Listed investments At 1st August 2024 . . . . . . . . . 1,032) 1,225) Additions . . . . . . . . . . 518) 51) Disposals . . . . . . . . . . (43) (367) Change in fair value . . . . . . . . . 186 123 At 31st July 2025 . . . . . . . . . 1,693) 1,032) Listed investments are measured at fair value with changes in their value taken to the Income Statement. The fair value movement on financial assets held at 31st July 2025 was taken to the Income Statement. As the Group’s financial assets consisted entirely of equities of companies listed on quoted markets then these fall within ‘Level 1’ of the fair value hierarchy as described by IFRS 13: Fair Value Measurement. Level 1 valuations are those using inputs which are quoted prices (unadjusted) in active markets for identical assets or liabilities the Company can access at the year end date. 86197 J Smart Annual Report Text.indd 12386197 J Smart Annual Report Text.indd 123 15/12/2025 14:2515/12/2025 14:25 124 125 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 18. ASSETS HELD FOR SALE Group 2 0 2 5 ) 2024) £ 0 0 0 ) £000) Transfer from Investment Properties . . . . . . . -) 14,199) In the year to 31st July 2024 the Directors agreed that two of the investments properties held by C. & W. Assets Limited at Cardonald and Bellshill in Glasgow should be marketed for sale and therefore, as per IAS 40: Investment Properties, as they were no longer held to earn rentals and/or capital appreciation then they were not longer classed as Investment Properties and therefore had been transferred to Assets Held for Sale as they meet the definition of an asset held for sale as they were available for sale in their immediate condition at the prior year end and as they were sold after the year end the sale is probable. The sale of the properties concluded in August 2024 for £14,150,000. 19. INVENTORIES Group Company 2 0 2 5 ) 2024) 2025) 2024) £ 0 0 0 ) £000) £000) £000) Work in progress . . . . . 13,444) 15,553) 13,444) 15,553) Land held for development . . . . 2,903) 3,088) 2,565) 2,750) Raw materials and consumables . . . 61) 69) 31) 27) 16,408) 18,710) 16,040) 18,330) 20. CONTRACT BALANCES The timing of revenue recognition results in amounts due from customers for construction contracts. Those which have not yet been invoiced are disclosed as Contract Assets and once invoiced they are disclosed as Trade Receivables (note 21). The Group does not receive deposits or payments in advance for contracts and therefore has no Contract Liabilities to disclose. The Group did not incur costs to obtain contracts. ) Contract Assets . . . . . . 455) 944) 233) 427) As at 1st August 2024 . . . . . 944) 33) 427) - Transfers from contract assets recognised at the beginning of the year to trade receivables . . (944) (33) (427) - Increase related to services provided in the year . 455) 944) 233 427) As at 31st July 2025 . . . . . 455) 944) 233 427) 86197 J Smart Annual Report Text.indd 12486197 J Smart Annual Report Text.indd 124 15/12/2025 14:2515/12/2025 14:25 124 125 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 21. TRADE AND OTHER RECEIVABLES NON-CURRENT ASSETS: Group Company 2 0 2 5 ) 2024) 2025) 2024) £ 0 0 0 ) £000) £000) £000 Loan to Joint Venture Companies . . . 2,155) -) 2,155) -) Loans to Subsidiary Companies . . . - - 364 364 2,155) -) 2,519) 364) CURRENT ASSETS: Trade receivables . . . . . 1,348 966 809 395 Amounts owed by Subsidiaries . . . . - - 3,367 67 Other receivables . . . . . 641 964 82 221 Prepayments and accrued income . . . 581 505 182 125 2,570 2,435 4,440 808 The ageing of past due but not impaired trade debtors is as follows: Less than 30 days . . . . . 939 886 522 395 30 to 60 days . . . . . 337 48 287 - Greater than 60 days . . . . . 72 32 - - 1,348 966 809 395) Trade receivables are subject to standard payment terms and conditions normal for construction industry being 14 days from date applications are issued or 30 days from date of invoice whichever is applicable. Investment property rent it is payable in advance and insurance and service charge invoices due on demand. The Group measures the loss allowance on trade receivables at an amount equal to lifetime expected credit loss using the simplified model in IFRS 9: Financial Instruments which are estimated by reference to past default experience of debtors and an analysis of debtors’ current financial position and adjusted for items specific to debtors. There has been no change in the estimation techniques or significant assumptions in the year. The Group has considered the measure of the loss allowance separately for its construction activities and investment property activities as the transactions within each activity differ significantly as does previous credit experience. For construction activities due to the nature of the customers of the Group which tend to be social housing providers or local government and in respect of private house sales which do not occur until receipt of proceeds, the risk of credit loss is negligble. In the years to 31st July 2025 and 31st July 2024 the Group had no construction activity bad debts. Therefore, based on this past experience the Group has no expected credit loss for construction activities requiring to be incorporated. For investment property activities the Group has reviewed the bad debts written off in previous years, which occurs when the Group has information indicating that the debtor is in severe financial difficulty and the Group has no realistic prospect of recovery of the debt and has calculated over the last three financial years an average expected credit loss percentage of 0.65% (2024, 0.97%). The Group is able to review all of this trade receivables in its investment property activities and make specific provisions as it considers necessary based on the knowledge of its debtors and likelihood of recoverability of the debts. As at 31st July 2025 the Group made a provision for lifetime expected credit losses of £27,000 (2024, £18,000). 86197 J Smart Annual Report Text.indd 12586197 J Smart Annual Report Text.indd 125 15/12/2025 14:2515/12/2025 14:25 126 127 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 21. TRADE AND OTHER RECEIVABLES (continued) Trade receivables and amounts recoverable on contracts includes £165,000 (2024, £24,000) in respect of outstanding retentions. The loan to Joint Venture company (note 16(a)) has no specific date for repayment. Repayment will be on such dates and in such proportions as the borrower and lender agree in writing. Given the expected future repayment profile this loan has been disclosed as due after one year. The loan is not subject to any significant increase in credit risk since initial recognition and consequently this is no lifetime credit losses for non-current receivables. Amounts owed by subsidiaries are repayable on demand and are interest free. The loans to subsidiary companies are repayable on demand and are interest free. The Directors consider that the carrying amount of trade and other receivables approximates to their fair value. 22. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise the following: Group Company 2 0 2 5 2024 2025 2024 £000 £000 £000 £000 Cash at bank and on hand . . . . 11,057 5,552 -) -– Short term available deposits . . . . 14,709 7,380 -) -– 25,766 12,932 -) -– Bank overdrafts . . . . . (10,839) (5,431) (9,981) (4,235) Cash and cash equivalents 14,927 7,501 (9,981) (4,235) Monies held on deposit of £53,000 (2024, £51,000) are held in bank accounts which have original maturity dates exceeding three months and therefore do not meet the criteria of cash and cash equivalents as defined in IAS 7: Statement of Cash Flows. The bank has been granted guarantees and letters of offset by each member of the Group in favour of the bank on account of all these members of the Group as a continuing security for all monies, obligations and liabilities owing or incurred to the bank. Overall the Group is not allowed to be in an overdrawn bank position, however individual companies within the Group may have an overdrawn bank balance. 23. TRADE AND OTHER PAYABLES CURRENT LIABILITIES: Trade payables . . . . . . 1,195 1,015 811 721 Amounts owed to Subsidiaries . . . . - - 133 81 Other taxes and social security costs . . . 283 473 223 729 Other creditors and accruals . . . . 2,743 2,993 1,772 2,136 Deferred income . . . . . 352 232 - - 4,573 4,713 2,939 3,667 Included in Other creditors and accruals are contract loss provisions. of £428,000 (2024, £1,162,000) for the Group and £424,000 (2024, £1,161,000) for the Company. 86197 J Smart Annual Report Text.indd 12686197 J Smart Annual Report Text.indd 126 15/12/2025 14:2515/12/2025 14:25 126 127 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 24. FINANCIAL INSTRUMENTS The Group’s financial instruments comprise of bank balances and cash, financial assets, trade and other receivables and trade and other payables. The amounts presented in relation to trade receivables are net of allowances for expected credit losses. Financial assets are held at fair value as per IFRS 13: Fair Value Measurement with changes in value being taken to the Income Statement. All other instruments are carried at cost which approximates to their fair value. The financial instruments are held to finance the Group’s operations. Details of significant accounting policies and methods adopted in relation to recognition and measurement are given in note 1 of the financial statements. The principal risks arising from the Group’s financial instruments are credit risk, market risk and liquidity risk. All transactions for the Group are undertaken in pounds sterling and therefore the Group is not exposed to foreign exchange rate risk. CREDIT RISK In relation to the Group’s financial assets, the Group has no significant concentration of credit risk, as exposure is spread over a number of counterparties and customers who the Group assess as being creditworthy. In some instances, relating to tenants within investment properties, guarantees from parent companies and/or deposits are obtained prior to granting of a lease should the Group assess any potential issues with creditworthiness. There is no significant impairment loss recognised or significant receivables that are past due but not impaired. Trade receivables - Trade receivables are subject to standard payment terms and conditions normal for construction industry and, for the investment property, rent is payable in advance and insurance and service charge invoices are due on demand. The Group measures the loss allowance on trade receivables at an amount equal to lifetime expected credit loss which are estimated by reference to past default experience of debtors and an analysis of debtors’ current financial position and adjusted for items specific to debtors. There has been no change in the estimation techniques or significant assumptions in the year. Trade receivables are written off when the Group becomes aware that the debtor is in severe financial difficulty and there is no prospect of recovery of the debt. As at 31st July 2025 30.33% being £409,000 (2024, 8.29%, £80,000) of the Group trade receivables were past due but not impaired and, for the Company, 35.48% being £287,000 of trade receivables were past due (2024, 0.0%, £nil). Joint Ventures - The Group has assessed that there is no significant credit risk in relation to loans to Joint Venture companies given the underlying value of the assets within these entities. Subsidiaries - With regards to loans to subsidiary companies the Company has assessed that where a subsidiary has insufficient assets to repay the loans then there is a risk the loan may not be repaid and so has provided in full for these loans. Bank deposits - The Group deposits surplus monies with various banks and accounts to reduce the Group’s exposure to any one financial institution or product. MARKET RISK The Group’s exposure here is in relation to interest rates. The Group only has monies on deposits it has no bank borrowings, so the risk relates to interest receivable only. IFRS 7: Financial Instrument Disclosures requires a company to undertake a sensitivity analysis on its financial instruments which are affected by changes in interest rates. The Group financial instruments affected by interest rate fluctuations are bank deposits and bank overdrafts. Based on the Group’s net position at the year end, a 1% increase or decrease in the interest rates would change the Group’s profit before tax by approximately £144,000 and £102,000 respectively (2024, £23,000 and £111,000 respectively). LIQUIDITY RISK The Group pays all trade creditors in accordance with standard payment terms in the construction industry, being end of month following receipt of invoice. All other creditors are paid in accordance with their standard terms. 86197 J Smart Annual Report Text.indd 12786197 J Smart Annual Report Text.indd 127 15/12/2025 14:2515/12/2025 14:25 128 129 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 25. DEFERRED TAXATION DEFERRED TAX ASSETS Trading and Other Other Capital Timing Timing Losses Difference Total Difference £000 £000 £000 £000 At 1st August 2023 13 - 13 - Credited to Income Statement 41 - 41) - At 31st July 2024 54 - 54 - Credited to Income Statement 155 2) 157) 2) At 31st July 2025 . . . 209 2 211 2) DEFERRED TAX LIABILITIES GROUP Valuation Accelerated Retirement Surplus on Other Capital Benefit Investment Timing Allowances Obligations Properties Differences Total £000 £000 £000 £000 £000 At 1st August 2023 . 241 5,000 3,583 18 8,842 Charged/(credited) to Income Statement 16 310 216 (6) 536 Charged to Equity . . . –) 450 - -) 450 At 31st July 2024 . . 257 5,760 3,799 12 9,828 (Credited)/charged to Income Statement (24) 320 1,616 1 1,913 Charged to Equity . . . -) 366 -) -) 366) At 31st July 2025 . . . 233 6,446 5,415 13 12,107 COMPANY Accelerated Retirement Other Capital Benefit Timing Allowances Obligations Differences Total £000 £000 £000 £000 At 1st August 2023 . . . . . 58 5,000 9 5,067 Charged/(credited) to Income Statement . . 16 310 (6) (320 Charged to Equity . . . . . - ) 450 -) 450 At 31st July 2024 . . . . . 74 5,760 3 5,837 Charged/(credited) to Income Statement . . 104 320 ) (3) 421) Charged to Equity . . . . . - ) 366 -) 366) At 31st July 2025 . . . . . 178 6,446 - 6,624 86197 J Smart Annual Report Text.indd 12886197 J Smart Annual Report Text.indd 128 15/12/2025 14:2515/12/2025 14:25 128 129 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 26. LEASE LIABILITIES Group Amounts payable under leases: 2025 2024) Within one year . . . . . . . . . 1 1) In two – five years exclusively . . . . . . . . . 1 1) After five years . . . . . . . . . . 211) 211) Present value of lease liabilities . . . . . . . . . 213) 213) Due for settlement within one year (shown in current liabilities) . . . . 1) 1) Due for settlement after one year (shown in non-current liabilities) . . . 212) 212) 27. CAPITAL AND RESERVES SHARE CAPITAL 2025 2024 Issued and fully paid ordinary shares of 2p each Number £000 Number £000 At 1st August 2024 . . . . . 39,411,170 789 40,043,920 802 Purchased and cancelled . . . . (521,939) (10) (632,750) (13) At 31st July 2025 . . . . . 38,889,231 779 39,411,170 789 During the year to 31st July 2025 the Company purchased for cancellation 521,939 ordinary shares of 2p each with a nominal value of £10,000 for a consideration of £656,000. All shareholders of ordinary shares have a right to receive dividends paid by the Company in accordance with their shareholding. Each shareholder has the right to attend and vote at a General Meeting and each share attracts one vote. There are no restrictions on the distribution of dividends or repayment of capital. Capital redemption reserve The Capital redemption reserve relates to the nominal value of issued share capital bought back by the Company and cancelled. Retained earnings Retained earnings represents the accumulated profits or losses, net of distributions made and the accounting for share capital bought back by the Company. 86197 J Smart Annual Report Text.indd 12986197 J Smart Annual Report Text.indd 129 15/12/2025 14:2515/12/2025 14:25 130 131 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 28. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS (a) CASH AND CASH EQUIVALENTS FOR STATEMENT OF CASH FLOWS 2 0 2 5 2024 £000 £000 Cash and cash equivalents . . . . . . . . 25,766 12,932 Bank overdraft . . . . . . . . . . (10,839) (5,431) Net position . . . . . . . . . . 14,927 7,501 (b) ANALYSIS OF NET FUNDS At 1st Cash At 31st August 2024 Flow July 2025 £ 0 0 0 £000 £000 Cash and cash equivalents . . . . . . 12,932 12,834 25,766 Bank overdraft . . . . . . . . (5,431) (5,408) (10,839) Net funds . . . . . . . . 7,501 7,426 14,927 (c) ANALYSIS OF DEBT Lease Liabilities £000 As at 1st August 2024 . . . . . . . . . 213 Cash flows . . . . . . . . . . -) As at 31st July 2025 . . . . . . . . . 213 As at 1st August 2023 . . . . . . . . . 213 Cash flows . . . . . . . . . . -) As at 31st July 2024 . . . . . . . . . 213 29. NOTES TO THE COMPANY STATEMENT OF CASH FLOWS (a) CASH AND CASH EQUIVALENTS FOR STATEMENT OF CASH FLOWS 2 0 2 5 2024 £000 £000 Cash and cash equivalents . . . . . . . . - - Bank overdraft . . . . . . . . . (9,981) (4,235) Net position . . . . . . . . . . (9,981) (4,235) (b) ANALYSIS OF NET FUNDS At 1st Cash At 31st August 2024 Flow July 2025 £ 0 0 0 £000 £000 Cash and cash equivalents . . . . . . . 2,9 - (- - Bank overdraft . . . . . . . . (4,235) (5,746) (9,981) Net funds . . . . . . . . . (4,235) (5,746) (9,981) 86197 J Smart Annual Report Text.indd 13086197 J Smart Annual Report Text.indd 130 15/12/2025 14:2515/12/2025 14:25 130 131 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 30. FUTURE CAPITAL EXPENDITURE As at 31st July 2025 the Group had commitment of capital expenditure relating to Property, plant and equipment of £nil (2024, £74,000). The Group had obligations of £nil (2024, £nil) in respect of future developments and repair costs of investment properties at the Statement of Financial Position date. The Group’s share of capital expenditure contracted for by its Joint Ventures as at 31st July 2025 amounted to £nil (2024, £nil). 31. RETIREMENT BENEFIT OBLIGATIONS DEFINED BENEFIT PENSION SCHEME The Group operates a defined benefit pension scheme for certain active and former employees of the Group. The scheme was closed to new members in the year to 31st July 2003. The scheme is subject to the funding legislation outlined in the Pensions Act 2004 together with documents issued by the Pensions Regulator and Guidance Notes adopted by the Financial Reporting Council. The Group has concluded that the trust deed relating to the defined benefit scheme grants the unconditional right to any surplus of the scheme on the full settlement of the scheme liabilities to the Group and therefore have concluded that any surplus on the scheme can be incorporated into the Group and Company financial statements. Advice on the Group’s right to a surplus arising on the pension scheme was sought in the year to 31st July 2022 from a firm of lawyers who specialise in this area. Their advice was that the Group had an unconditional right to the surplus based on the original Trust Deed and Deed of Variation and therefore the full surplus arising of the calculation thereof under IAS 19 (amended): Employee Benefits should be accounted for in the financial statements. The scheme is administered by a separate Board of Trustees which is composed of employer nominated representatives and member nominated Trustees and is a separate legal entity. The assets of the scheme are held separately from the assets of the Group and are administered and managed professionally under the supervision of the Trustees. The Trustees are required by law to act in the best interests of all classes of beneficiaries to the scheme and are responsible for the investment policy and the day-to-day running of the scheme. The Trustees are also responsible for jointly agreeing with the employer the level of contributions due to the Pension scheme. The scheme provides qualifying employees with an annual pension based on final pensionable salary on attainment of a normal retirement age of 65. Active members also benefit from life assurance cover. However the payment of these benefits are at the discretion of the Trustees of the scheme. The pension scheme’s independent qualified Actuary carries out a triennial valuation using the Projected Unit Credit Method to determine the level of the scheme’s surplus or deficit. The last completed triennial valuation was as at 31st October 2021 which revealed a surplus of £9,291,000, representing a funding level of 124%. Following this latest triennial valuation the Group and the scheme Trustees agreed that employer contributions to the scheme would remain at 35.4% and employee contributions are to remain at 3%. The triennial valuation as at 31st October 2024 is being prepared but as at the date of this Annual Report and Statement of Accounts it is not yet been completed. There were no outstanding contributions at the year end. The Group expects to pay a contribution of £341,000 (2024, £372,000) during the financial year to 31st July 2026. 86197 J Smart Annual Report Text.indd 13186197 J Smart Annual Report Text.indd 131 15/12/2025 14:2515/12/2025 14:25 132 132 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 31. RETIREMENT BENEFIT OBLIGATIONS (continued) DEFINED BENEFIT PENSION SCHEME (continued) ASSUMPTIONS The financial assumptions used to calculate scheme liabilities under IAS 19 (amended): Employee Benefits are: 2 0 2 5 2024 Valuation method . . . . . . . . Projected Unit Projected Unit Discount rate . . . . . . . . . 5.6% 5.0% Inflation rate - Retail price index . . . . . . 3.0% 3.2% Inflation rate - Consumer price index . . . . . . 2.5% 2.7% Salary increases . . . . . . . . . 3.0% 3.2% Pension increases . . . . . . . . 1.9% – 3.3% 2.0% – 3.4% The mortality assumptions imply the following expectations of years of life from age 65: 2 0 1 6 2015 2014 Man currently aged 65 . . . . . . . . 20.7 20.6 Woman currently aged 65 . . . . . . . 24.0 23.9 Man currently aged 45 . . . . . . . . 22.0 21.9 Woman currently aged 45 . . . . . . . 25.4 25.3 SENSITIVITY TO KEY ASSUMPTIONS The scheme exposes the Group to actuarial risks, such as interest rate risk, inflation risk, longevity risk and investment risk. The key assumptions used for IAS 19 are discount rate, inflation rates and mortality. If different assumptions were used then this could materially affect the results disclosed in the financial statements. Movements in the key assumptions would have the following effect on the level of the surplus: Increase in scheme liabilities 2025 2024 Change in assumption £000 £000 Discount rate Decrease of 0.25% . . . . . . 541 640 Inflation rate Increase of 0.25% . . . . . . 176 203 Mortality rate Increase in life expectancy of 1 year . . . 1,212 1,394 The sensitivity information has been prepared using the same methodology as the calculation of the current year scheme obligations. 86197 J Smart Annual Report Text.indd 13286197 J Smart Annual Report Text.indd 132 15/12/2025 14:2515/12/2025 14:25 133 133 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 31. RETIREMENT BENEFIT OBLIGATIONS (continued) DEFINED BENEFIT PENSION SCHEME (continued) STATEMENT OF FINANCIAL POSITION DISCLOSURES The investments held by the scheme and the reconciliation of the scheme assets and liabilities to the Statement of Financial Position were: Valuation Valuation Valuation 2025 2024 2023 £000 £000 £000 EQUITIES UK . . . . . . 9,484 10,499 11,377 Overseas . . . . . 23,394 23,082 20,253 Multi-asset diversified funds . . . 3,434 3,857 2,173 Absolute return funds . . . . 866 785 3,025 BONDS Government . . . . . 5,060 3,677 3,672 Corporate . . . . . 4,750 3,219 2,984 OTHER Cash . . . . . . 1,912 2,875 1,068 Fair value of scheme assets . . . 48,900 47,994 44,552 Present value of scheme liabilities (23,116) (24,954) (24,554) Scheme surplus . . . . . 25,784) 23,040) 19,998 Deferred taxation . . . . (6,446) (5,760) (5,000) Net pension scheme surplus . . . 19,338) 17,280) 14,998 In the most recent triennial valuation dated 31st October 2021, the defined benefit scheme liabilities were split 34% in respect of active scheme members, 5% in respect of deferred scheme members and 61% in respect of retirees. The duration of the defined benefit scheme liabilities as at 31st July 2025 is 10 years (2024, 11 years). The assets of the scheme are invested in funds managed by LGT Wealth Management Limited, in direct investments via Rathbone Investment Management Limited; in insurance policies with companies belonging to the Royal London Group; and in bank accounts. The assets do not include any directly owned ordinary shares issued by J. Smart & Co. (Contractors) PLC. The fair value of the assets of the pension scheme are determined based on publicly available market prices wherever available. 86197 J Smart Annual Report Text.indd 13386197 J Smart Annual Report Text.indd 133 15/12/2025 14:2515/12/2025 14:25 134 135 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 31. RETIREMENT BENEFIT OBLIGATIONS (continued) DEFINED BENEFIT PENSION SCHEME (continued) The following amounts are incorporated into the financial statements 2 0 2 5 2024 £000 £000 Analysis of amounts charged to operating loss: Current service cost . . . . . . . . . (220) (265) Past service cost . . . . . . . . . - - Total service cost . . . . . . . . . (220) (265) Analysis of amounts charged to net finance income: Interest income . . . . . . . . . . 2,373 2,364 Interest costs . . . . . . . . . . (1,216) (1,278) 1,157 1,086 Movement in present value of defined benefit obligations: At 1st August 2024 . . . . . . . . . 24,954 24,554 Service cost . . . . . . . . . . 220 265 Interest cost . . . . . . . . . . 1,216 1,278 Charges paid . . . . . . . . . . -) -) Employee contributions . . . . . . . . 24 26 Benefit payments . . . . . . . . . (1,464) (1,854) Actuarial movements due to scheme experiences . . . . . ()(277) 118 Actuarial movements due to changes in demographic assumptions . . . - (439) Actuarial movements due to changes in financial assumptions . . . (1,557) 1,006 At 31st July 2025 . . . . . . . . . 23,116 24,954 86197 J Smart Annual Report Text.indd 13486197 J Smart Annual Report Text.indd 134 15/12/2025 14:2515/12/2025 14:25 134 135 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 31. RETIREMENT BENEFIT OBLIGATIONS (continued) DEFINED BENEFIT PENSION SCHEME (continued) 2 0 2 5 2024 £ 0 0 0 £000 Movement in fair value of scheme assets: At 1st August 2024 . . . . . . . . . 47,994 44,552 Interest income . . . . . . . . . 2,373 2,364 Employer contributions . . . . . . . . . 343 419 Employee contributions . . . . . . . . . 24 26 Benefits paid . . . . . . . . . . (1,464) (1,854) Charges paid . . . . . . . . . . -) -) Return on plan assets excluding amount shown in interest income . . . (370) 2,487 At 31st July 2025 . . . . . . . . . 48,900 47,994 Movement in scheme surplus: At 1st August 2024 . . . . . . . . . 23,040 19,998 Current service cost . . . . . . . . . (220) (265) Past service cost . . . . . . . . . - - Contributions . . . . . . . . . . 343 419 Net finance income included in finance income . . . . . 1,157) 1,086 Actuarial remeasurement of pension scheme liability . . . . 1,464) 1,802) At 31st July 2025 . . . . . . . . . 25,784) 23,040 Analysis of the actuarial gain included in the statement of comprehensive income: (Loss)/gain on scheme assets excluding amounts shown in interest income . (370) 2,487 Changes in assumptions underlying present value of scheme liabilities . . 1,834 (685)) At 31st July 2025 . . . . . . . . . 1,464) 1,802 History of experience gains and losses: (Loss)/gain on scheme assets Amount (£000) . . . . . . . . . . (370) 2,487 Percentage of market value of scheme assets . . . . . . 0.8% 5.2% Changes in assumptions underlying present value of scheme liabilities Amount (£000) . . . . . . . . . . 1,834) (685) Percentage of market value of scheme liabilities . . . . . . 7.9% 2.7% Total amounts included in Consolidated Statement of Comprehensive Income Amount (£000) . . . . . . . . . . 1,464) 1,802 Percentage of market value of scheme liabilities . . . . . . 6.3% 7.2% 86197 J Smart Annual Report Text.indd 13586197 J Smart Annual Report Text.indd 135 15/12/2025 14:2515/12/2025 14:25 136 137 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 31. RETIREMENT BENEFIT OBLIGATIONS (continued) DEFINED CONTRIBUTION SCHEMES In the year to 31st July 2003 the Group commenced operation of a defined contribution Group Personal Pension Plan for eligible employees. The plan is externally administered and managed professionally by AEGON UK plc. The net contributions to the plan for the year were £392,000 (2024, £349,000) and are expensed through the Income Statement as incurred. STAKEHOLDER SCHEMES The Group has stakeholder pension arrangements for those employees not eligible for membership of either the Defined Benefit or Defined Contribution schemes. The Group makes contributions to these schemes and has no liability beyond these contributions. The contributions to these schemes in the year amounted to £80,000 (2024, £72,000) and are expensed through the Income Statement as incurred. MULTI EMPLOYER SCHEME The Group was also a member of the multi-employer pension scheme, Plumbing & Mechanical Services (UK) Industry Pension Scheme which closed to future benefit buildup effective 30th June 2019. The Group makes contributions to this scheme which in the year amounted to £5,000 (2024, £5,000) and are expensed through the Income Statement as incurred. No provision has been made for amounts payable by the Group in respect of Section 75 pension liabilities relating to the Group’s participation in this scheme given that, as at the date of these financial statements, any potential liability has not yet been assessed. 32. CONTINGENT LIABILITIES The Company and certain of its Subsidiaries have, in the normal course of business, entered into counter-indemnities in respect of performance bonds relating to their contracts. As at 31st July 2025 these amounted to £nil. The bank has been granted guarantees and letters of offset by each member of the Group in favour of the bank on account of all other members of the Group as a continuing security for all monies, obligations and liabilities owing or incurred to the bank. Overall the Group is not allowed to be in an overdrawn bank position, however individual companies within the Group may have an overdrawn bank balance. As at 31st July 2025 the balances in overdraft of subsidiary companies which the Company has given guarantees and letters of offset amounted to £858,000. 86197 J Smart Annual Report Text.indd 13686197 J Smart Annual Report Text.indd 136 15/12/2025 14:2515/12/2025 14:25 136 137 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 33. OPERATING LEASE ARRANGEMENTS GROUP – AS LESSEE Future minimum lease payments payable under non-cancellable operating leases for ground leases were payments to the lessors are contingent on rents received by the Group from tenants and as such, do not fall within the scope of IFRS 16: Leases for capitalisation: 2 0 2 5 2024 £ 0 0 0 £000 Within one year . . . . . . . . . . 96 88 In two – five years exclusively . . . . . . . . 275 275 After five years . . . . . . . . . . 67 106 438 469 GROUP – AS LESSOR Gross property rental income earned in the year amounted to £5,958,000 (2024, £6,366,000). At the Statement of Financial Position date, the Group had contracted with its tenants for the following future minimum lease payments: Within one year . . . . . . . . . . 5,768 5,065 Within one and two years . . . . . . . . 4,872 4,436 Within two and three years . . . . . . . . 3,745 3,534 Within three and four years . . . . . . . . 2,279 2,956 Within four and five years . . . . . . . . 1,445 1,829 After five years . . . . . . . . . . 4,130 3,904 22,239 21,724 86197 J Smart Annual Report Text.indd 13786197 J Smart Annual Report Text.indd 137 15/12/2025 14:2515/12/2025 14:25 138 139 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 34. RELATED PARTY TRANSACTIONS (a) SUBSIDIARIES Transactions between the Company and its Subsidiaries, which are related parties of the Company, have been eliminated on consolidation. Details of transactions between the Company and Subsidiaries are as follows: 2025 2024 2025 2024 £000 £000 £000 £000 Sale of goods and Purchase of goods and SUBSIDIARY services to Subsidiaries services from Subsidiaries McGowan and Company (Contractors) Limited . . 139 142 798 419 Cramond Real Estate Company Limited . . . - - - - Thomas Menzies (Builders) Limited . . . . 80 82 40 26 Concrete Products (Kirkcaldy) Limited . . . - - - - C. & W. Assets Limited . . . . . . 2,833 4,473 - - Smart Serviced Offices Limited . . . . 122 125 - - Northrigg Limited . . . . . . - - - - In addition, during the year the Company received a dividend of £2,500,000 from C. & W. Assets Limited (2024, £1,600,000). Amounts owed Amounts owed SUBSIDIARY by Subsidiaries to Subsidiaries McGowan and Company (Contractors) Limited . . - - 133 81 Cramond Real Estate Company Limited . . . - - - - Thomas Menzies (Builders) Limited . . . . - 5 - - Concrete Products (Kirkcaldy) Limited . . . - - - - C. & W. Assets Limited . . . . . . 3,367 61 - - Smart Serviced Offices Limited . . . . 1,340 1,190 - - Northrigg Limited . . . . . . 364 365 - - During the year the Company advanced a further £150,000 to its subsidiary Smart Serviced Offices Limited and as at 31st July 2025 the total due from the subsidiary was £1,340,000. As at 31st July 2025 the Company has provided in full against this debt. As at 31st July 2025 the Company was due a loan of £364,000 (2024, £364,000) from its subsidiary Northrigg Limited. No provision has been made against this debt. (b) JOINT VENTURE COMPANIES Transactions between the Group and its Joint Venture Companies were the sale of materials and services of £1,437,000 (2024, £52,000) including the refurbishment work on properties owned by one Joint Venture Company amounting to £1,434,000 and receipt of dividends of £nil (2024, £711,000). As at 31st July 2025 the Group owed these companies £nil (2024, £nil) and was owed £680,000 (2024, £1,000). During the year the Group was repaid £nil (2024, £3,010,000) of outstanding loans from Joint Venture Companies and advanced £2,155,000 (2024, £nil) to Joint Venture Companies. As at 31st July 2025 loans outstanding from Joint Venture Companies amounted to £2,155,000 (2024, £nil). The amounts outstanding are unsecured and will be settled for cash. No expense has been recognised in the year for bad or doubtful debts in respect of the amounts owed by Joint Venture Companies. 86197 J Smart Annual Report Text.indd 13886197 J Smart Annual Report Text.indd 138 15/12/2025 14:2515/12/2025 14:25 138 139 J. Smart & Co. (Contractors) PLC NOTES TO THE ACCOUNTS (continued) 31st JULY 2025 34. RELATED PARTY TRANSACTIONS (continued) (c) DIRECTORS’ INTEREST IN CONTRACTS David W Smart and John R Smart, throughout the year had material beneficial interests in Plean Precast Limited, Sterling Precast Limited and The Roofing and Building Supply Co. Limited, which have interests in continuing contracts for the purchase of materials and services from and for the sale of materials and services to the Group. During the year to 31st July 2025 the Group purchased materials amounting to £50,000 (2024, £42,000) from these companies and sold materials and services amounting to £847,000 (2024, £4,332,000) to these companies, including the construction work on the commercial and industrial properties for Plean Precast Limited amounting to £718,000 (2024, £4,269,000). All transactions were at normal commercial rates. As at 31st July 2025 the Group owed these companies £nil (2024, £9,000) and was owed £14,000 (2024, £393,000). (d) DIRECTORS’ REMUNERATION The remuneration of the Directors, who are the only key management of the Company, is set out in note 5 of the financial statements with further information contained in the audited part of the Directors’ Remuneration Report. (e) DIRECTORS’ DIVIDENDS During the year the Directors received dividends from the Company as follows: 2025 2024 £000 £000 David W Smart . . . . . . . . . . 413 413 John R Smart . . . . . . . . . . 413 413 Alasdair H Ross . . . . . . . . . . 5 5 Patricia Sweeney . . . . . . . . . . 5 5 Jane Oliver . . . . . . . . . . - - (f) DIRECTORS’ TRANSACTIONS The Directors purchased goods and services from Group Companies in the year amounting to: David W Smart . . . . . . . . . . 10 11 John R Smart . . . . . . . . . . 1 52 Alasdair H Ross . . . . . . . . . . - - Patricia Sweeney . . . . . . . . . . - - Jane Oliver . . . . . . . . . . - - (g) PENSION SCHEMES Disclosures in relation to the pension schemes are included in note 31 of the financial statements. During the year the Company paid fees and expenses on behalf of the defined benefit pension scheme amounting to £213,000 (2024, £220,000). 86197 J Smart Annual Report Text.indd 13986197 J Smart Annual Report Text.indd 139 15/12/2025 14:2515/12/2025 14:25