SMART (J.) & CO. (CONTRACTORS) PLC — Proxy Solicitation & Information Statement 2022

Dec 19, 2022

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about the action to be taken, you should immediately consult your bank manager, stockbroker, solicitor, accountant or other independent financial adviser authorised pursuant to the Financial Services and Markets Act 2000 ("FSMA") if you are in the United Kingdom, or from another appropriately authorised independent financial adviser if you are outside the United Kingdom.

If you have sold or otherwise transferred all of your shares in J. Smart & Co. (Contractors) PLC (the "Company"), please send this document and accompanying form of proxy, as soon as possible, to the purchaser or transferee or to the stockbroker, independent financial adviser or other person through whom the sale or transfer was effected for transmission to the purchaser or transferee.

J. SMART & CO. (CONTRACTORS) PLC

(Registered number: SC025130)

Circular to Shareholders and Notice of Annual General Meeting

Your attention is drawn to a letter from the Chairman of the Company set out on pages 3 to 5 of this document, together with a notice of Annual General Meeting of the Company set out on pages 6 to 7 of this document (the "Notice of AGM"), convening an Annual General Meeting to be held at the Company's registered office at 28 Cramond Road South, Edinburgh, EH4 6AB on 19 January 2023 at 12:00 noon.

A form of proxy for use at the Annual General Meeting is included with this document (the "Form of Proxy"). To be valid, the Form of Proxy must be lodged with the Company's register, Equiniti Limited, Aspect House, Spencer Road, Lancing, BN99 6DA, at least 48 hours before the time fixed for the Annual General Meeting. The Form of Proxy may also be lodged electronically by submitting a duly completed scanned copy of the proxy card to proxyvotes@equiniti.com.

To be entitled to attend and vote at the Annual General Meeting (and for the purpose of determining the votes they may cast), members must be registered in the Company's register of members at 6.30 p.m. on Tuesday, 17 January 2023 (or, if the Annual General Meeting is adjourned, at 6.30 p.m. on the day two days prior to the adjourned meeting or the Friday prior if this falls at the weekend).

A copy of the Notice of AGM and the information required by Section 311A Companies Act 2006 is available from the Company's website at www.jsmart.co.uk.

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TIMETABLE OF KEY EVENTS

Event	Date
Record date for entitlement to the final dividend	5:00 p.m. on 23 December 2022
Record date for entitlement to vote on the Resolutions	6:30 p.m. on 17 January 2023
Latest time and date for receipt of forms of proxy	5:00 p.m. on 17 January 2023
Annual General Meeting	12:00 noon on 19 January 2023
Payment of final dividend by cheque or BACS	30 January 2023

These dates (except those for the receipt of Forms of Proxy and of the Annual General Meeting) are estimates only. The timetable assumes that the Annual General Meeting will not be adjourned as a result of there being no quorum, or for any other reason. If there is an adjournment, any subsequent dates may be later than those shown. Any changes will be notified to shareholders by an announcement through a Regulatory Information Service.

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LETTER FROM THE CHAIRMAN OF THE COMPANY
Registered Office:
28 Cramond Road South
Edinburgh
EH4 6AB
15 December 2022

Dear Shareholder,

Introduction

The purpose of this Circular is to explain the business to be conducted at the Annual General Meeting to be held on 19 January 2023 as set out in the Notice of AGM on pages 6 to 7 of this document.

Engagement and voting at the AGM

The Board of Directors of the Company (the "Board") values the opportunity to meet shareholders at the Annual General Meeting and answer any questions that they raise. However, if any shareholder cannot attend the Annual General Meeting but wishes to submit a question to be raised at the Annual General Meeting, please do so by emailing your question to agm.questions@jsmart.co.uk at any time up to 10:00 a.m. on the morning of the Annual General Meeting.

The Company encourages all shareholders to vote by proxy in accordance with the Notes to the Notice of AGM set out on page 7. To be valid, the Form of Proxy accompanying this document must be lodged with the Company's register, Equiniti Limited, Aspect House, Spencer Road, Lancing, BN99 6DA, at least 48 hours before the time fixed for the Annual General Meeting. The Form of Proxy may also be lodged electronically by submitting a duly completed scanned copy of the proxy card to proxyvotes@equiniti.com. You may not use the electronic address provided either in the Notice of AGM or any related documents (including the Form of Proxy) to communicate with the Company for any purposes other than that expressly stated.

Explanatory Notes to the Resolutions

There are a total of 10 resolutions to be voted on at the Annual General Meeting set out in the Notice of AGM on pages 6 to 7.

Resolution 1 - To receive the financial statements and the Reports of the Directors and Auditor for the year ended 31 July 2022.

The Companies Act 2006 requires the directors of a public company to lay before the company in general meeting copies of the Statement of Accounts, the Report of the Directors and the Independent Auditor's Report. Accordingly, the Board are proposing a resolution on the Annual Report for the year ended 31 July 2022 (the "Annual Report").

Resolution 2 - Approval of the Directors' Remuneration Report for the year to 31 July 2022.

In accordance with the Companies Act 2006, the Board are proposing a resolution for the approval of the Directors' Remuneration Report as set out on pages 29 to 34 of the Annual Report. The report sets out the pay and benefits received by each Director for the year to 31 July 2022. This vote is advisory only and the Directors' entitlement to remuneration is not conditional on it being passed.

For the purposes of the resolution, the Directors' Remuneration Report does not include the Directors' Remuneration Policy. The Companies Act 2006 requires that the Directors' Remuneration Policy must be put to shareholders for approval whenever a new policy, or an amendment to an existing approved policy, is proposed. The Directors' Remuneration Policy must in any event be put to shareholders for approval at least every three years. The Company is not proposing any changes to the Directors' Remuneration Policy approved at the Annual

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General Meeting in 2020.

Resolution 3 - Final Dividend

The Board are proposing the payment of a final dividend of 2.27 pence per share for the year ended 31 July 2022. If approved the recommended dividend will be paid on 30 January 2023 to all shareholders who are on the register of members on 23 December 2022.

Resolution 4 - Re-election of Director - John R Smart

In accordance with provision 18 of the UK Corporate Governance Code, John R Smart seeks re-election as a Director.

John Smart is Joint Managing Director of the Company. John joined the Company in 2002. He was appointed to the Board in 2013 and became Joint Managing Director in 2017.

Resolution 5 - Re-election of Director - Alasdair H Ross

In accordance with provision 18 of the UK Corporate Governance Code, Alasdair H Ross seeks re-election as a Director.

Alasdair Ross is a quantity surveyor. Alasdair joined the Company in 1989 and was appointed to the Board in 2012.

Resolution 6 - Re-election of Director - Patricia Sweeney

In accordance with provision 18 of the UK Corporate Governance Code, Patricia Sweeney seeks re-election as a Director.

Patricia Sweeney acts as the Company's company secretary. Patricia joined the Company in 2011 and was appointed to the Board in 2017.

Resolution 7 - Re-appointment of Auditor

At each meeting at which the Annual Report is laid, the Company is required to appoint an auditor to serve until the next such meeting. Accordingly the Board are recommending the re-appointment of BDO LLP as the Company's Auditor.

Resolution 8 - Remuneration of the Auditor

The Board seeks authorisation to determine the remuneration of the Auditor.

Resolution 9 - Authorisation for the Company to purchase its own shares

Authority is sought by the Company, via a special resolution, to renew the authority granted at last year's Annual General Meeting, to make market purchases of its ordinary shares of £0.02 each (the "Ordinary Shares") up to a maximum of 4,067,809 Ordinary Shares (representing 10% of the Ordinary Shares in issue as at the date of the Notice of AGM).

The Company cannot pay less than £0.02 (exclusive of expenses) for each Ordinary Share and the maximum price that can be paid is the higher of:

1. an amount equal to 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
2. 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.

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Shares purchased under this authority will be cancelled. The purpose of the market purchase of ordinary shares is to enhance the earnings per share and/or the equity shareholders' funds per share.

Resolution 10 - Adoption of new Articles of Association

Resolution 10, which is proposed as a special resolution, proposes that the Company adopt new Articles of Association.

The Board has concluded that a number of changes should be made this year to the Company's constitution and that the most efficient way to make the changes is to adopt a fresh document as the Company's new Articles of Association.

It is proposed that the new Articles of Association are adopted to bring the Company in line with current market practice for a company listed on the main market of the London Stock Exchange. The principal differences between the Company's current Articles of Association (the "Current Articles") and the proposed new Articles of Association to be adopted by the Company (the "New Articles") include:

• Independent Directors – The New Articles provide for the appointment of independent non-executive Directors in accordance with the Listing Rules and UK Corporate Governance Code. As described in the Annual Report the Directors do not believe, at this time, that it would be useful for the Company to appoint independent non-executive Directors to the Board, however the New Articles provide flexibility for the Board to make such an appointment in the future.

• Shareholder Meetings – The New Articles provide that the Company may hold "hybrid" general meetings (including Annual General Meetings) in such a way that enables members to attend and participate in the business of the meeting by attending a physical location or by attending electronically. The New Articles do not permit the Company to hold general meetings wholly by electronic means, so a physical meeting will still be required. This change will make it easier for shareholders (including those unable to attend a physical meeting in person) to attend and participate in future general meetings and will facilitate better engagement, and is considered desirable to provide the Board with greater flexibility to align with advances in general meeting technology and developing best practice, particularly in light of the coronavirus pandemic. The New Articles also contain a number of consequential changes to enable 'hybrid' meetings.

• Retirement of Directors – It has become the Company's practice that at each Annual General Meeting all of the Directors (except the Chairman) retire and stand for re-election in accordance with the provisions of the UK Corporate Governance Code. The New Articles specifically provide that all of the Directors (except the Chairman) must retire and stand for re-election at each Annual General Meeting of the Company. As a consequence of this the New Articles also provide a procedure to be followed if an insufficient number of Directors are re-elected at the Annual General Meeting.

A copy of the New Articles will be available to view on the National Storage Mechanism https://data.fca.org.uk/#/nsm/nationalstoragemechanism and will also be available for inspection on the Company's website at www.jsmart.co.uk.

Recommendation

The Board believes all of the proposed resolutions to be considered at the Annual General Meeting are in the best interests of the Company and its shareholders as a whole and unanimously recommend that you vote in favour of them as they intend to do so in respect of their own beneficial holdings, save in respect of those resolutions in which they are interested.

Yours faithfully,

David W Smart

Chairman

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NOTICE OF ANNUAL GENERAL MEETING

J. SMART & CO. (CONTRACTORS) PLC

(Registered number: SC025130)

NOTICE IS HEREBY GIVEN that an annual general meeting of J. Smart & Co. (Contractors) PLC (the "Company") will be held at the Company's registered office at 28 Cramond Road South, Edinburgh, EH4 6AB at 12:00 noon on 19 January 2023, for the purposes of considering and, if thought fit, passing the following resolutions:

Ordinary Resolutions

1. To receive and consider the Statement of Accounts for the year ended 31 July 2022 and the Report of the Directors and the Independent Auditor's Report.
2. To approve the Directors' Remuneration Report for the financial year ended 31 July 2022 as set out on pages 29 to 34 in the Annual Report.
3. To declare a final dividend of 2.27 pence per share for the year ended 31 July 2022.
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-appoint BDO LLP as the Company's Auditor.
8. To authorise the Directors to determine the remuneration of the Auditor.

Special Resolutions

1. To authorise the Company, 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 £0.02 each (ordinary shares) provided that:

a) the maximum aggregate number of ordinary shares which may be purchased is 4,067,809 ordinary shares (representing 10% of the ordinary shares in issue as at the date of this notice of the Annual General Meeting);
b) the minimum price which the Company may pay for each ordinary share is £0.02 (exclusive of expenses); and
c) the maximum price which the Company may pay for each ordinary share is the higher of:

(i) an amount equal to 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.

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1. That the Articles of Association produced to the meeting and initialled by the Chairman of the meeting for the purpose of identification be adopted as the Articles of Association of the Company in substitution for, and to the exclusion of, the existing Articles of Association.

Dated 15 December 2022

By order of the Board
Patricia Sweeney
Company Secretary

Registered Office:
28 Cramond Road South, Edinburgh, EH4 6AB

Information regarding the Annual General Meeting, including the information required by section 311A of the Companies Act 2006 is available from www.jsmart.co.uk.

Notes:

(a) To be entitled to attend and vote at the Annual General Meeting (and for the purpose of determining the votes they may cast), members must be registered in the Company's register of members at 6.30 p.m. on Tuesday, 17th January 2023 (or, if the Annual General Meeting is adjourned, at 6.30 p.m. on the day two days prior to the adjourned meeting or the Friday prior if this falls at the weekend). Changes to the Company's register of members after the relevant deadline will be disregarded in determining the rights of any person to attend.

(b) A Form of Proxy is enclosed which, to be effective, must be completed and delivered by post or hand to the registrars of the Company, Equiniti Limited, Aspect House, Spencer Road, Lancing, BN99 6DA by no later than 48 hours (excluding non-working days) before the time the Annual General Meeting is scheduled to begin. The Form of Proxy may also be lodged electronically by submitting a duly completed scanned copy of the proxy card to proxyvotes@equiniti.com. The same deadline of 48 hours (excluding non-working days) before the time of the Annual General Meeting applies to electronic submission of the proxy card.

(c) Any person to whom this notice is sent who is a person nominated under section 146 of the Companies Act 2006 to enjoy information rights (a 'Nominated Person') may, under an agreement between him/her and the member by whom he/she was nominated, have a right to be appointed (or to have someone else appointed) as a proxy for the Annual General Meeting. If a Nominated Person has no such proxy appointment right or does not wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the member as to the exercise of voting rights.

(d) Section 319A of the Companies Act 2006 requires the Directors to answer any question raised at the Annual General Meeting which relates to the business of the meeting although no answer need be given (a) if to do so would interfere unduly with the preparation of the meeting or involve disclosure of confidential information; (b) if the answer has already been given on the Company's website; or (c) if it is undesirable in the best interests of the Company or the good order of the meeting.

(e) A copy of this Notice of Annual General Meeting and the information required by Section 311A Companies Act 2006 is available from www.jsmart.co.uk. A copy of the New Articles will be available to view on the National Storage Mechanism https://data.fca.org.uk/#/nsm/nationalstoragemechanism and will be available for inspection at the registered office of the Company during usual business hours on any weekday from the date of this notice until the Annual General Meeting, and at the place of that meeting for at least 15 minutes prior to the commencement of the meeting until its conclusion.

(f) As at 13 December 2022 (being the last practicable date prior to the publication of this Notice) the Company's issued share capital consists of 40,678,099 ordinary shares carrying one vote each. The Company does not hold any treasury shares. Therefore, the total voting rights in the Company as at 14 December 2022 are 40,678,099.

(g) A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, the proxy will vote or abstain from voting at his or her discretion. The proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Annual General Meeting.

(h) Except as provided above, members who have general queries about the Annual General Meeting should contact the Company's Registrar, Equiniti Limited at Aspect House, Spencer Road, Lancing, BN99 6DA or the Company's Secretary at the Company's registered office or by emailing agm.questions@jsmart.co.uk.

(i) Members may not use any electronic address provided either in this Notice of Annual General Meeting, or any related documents (including the Form of Proxy), to communicate with the Company for any purposes other than those expressly stated.

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